Anil Ambani group to inject $550 mn for studio with Spielberg (Lead)

September 20th, 2008 - 3:58 pm ICT by IANS  

New York, Sep 20 (IANS) In a unique Bollywood-Hollywood partnership, the Reliance Anil Dhirubhai Ambani Group will invest $550 million to form a new venture with Steven Spielberg, allowing him to break away from his studio, DreamWorks, now owned by Viacom’s Paramount Pictures, sources familiar with the deal said.The Indian group will invest the money as equity, while another $750 million or so will come as debt from leading investment banker JP Morgan Chase for the new studio, whose name has not been divulged yet, the sources added.

DreamWorks was formed with much fanfare in 1994. But after an uneven run, it was sold to Viacom’a Paramount in 2006 for $1.6 billion. Since then, Spielberg and his team were eager to part ways with Paramount.

“The deal has been sealed,” said a source, even as Paramount said it would not delay matters for Spielberg, who has to his credit movies like “Jaws”, “Star Wars” and “Jurassic Park”, and his associates.

“To facilitate a timely and smooth transition, Paramount has waived certain provisions from the original deal to clear the way for the DreamWorks principals and their employees to join their new company without delay,” the studio said.

“Steven is one of the world’s great storytellers and a legend in the motion picture business. It has been an honour working closely with him and the DreamWorks team over the last three years,” the studio added.

“We expect to continue our successful collaboration with Steven in the future,” said the studio, while congratulating him and DreamWorks partner David Geffen and chief executive Stacey Snider in finalisng the pact with the Indian group.

But the Mumbai-based industrial house was tight-lipped about the deal. “At the moment, we have no comments to make over this issue,” spokesperson for the group told IANS from their headquarters.

Anil Ambani’s group has been negotiating the deal for the past couple of months and the recent crisis in the global financial system helped seal the deal, as fund-raising from other means had become difficult, sources said.

They said the next step would be to form the new studio and line up a new distributor for the six-eight films per year that the new studio intends to produce each year. Given his long-standing links, Spielberg is likely to choose General Electric’s Universal Studios, they added.

Ambani’s Reliance Big Entertainment had announced in Cannes in May that it would make a major foray into Hollywood and fund production houses run by actors like Brad Pitt, Tom Hanks, Nicolas Cage, Jim Carrey and George Clooney.

This marked the biggest foray of an Indian entity in Hollywood’s motion picture industry. Thirty films are likely to emanate from Reliance’s co-financing and 10 will go into production soon, company officials had said.

The entertainment business of the Anil Ambani group has interests in movies, FM radio, music, sports, gaming, Internet and mobile portals, direct-to-home TV, Internet TV and Mobile TV.

The group, which also has a major presence in mobile telecom and energy sectors, had acquired in 2005 Adlabs Films Ltd, one of India’s the largest entertainment companies with interests in film processing, production, exhibition and digital cinema.

The group recently acquired 250 screens in US and 51 screens in Malaysia.

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