The principals of DreamWorks SKG have completed a long-anticipated deal with one of India’s largest entertainment conglomerates to set up a new $1.2 billion film company.
The deal gives DreamWorks co-founder Steven Spielberg and DreamWorks Chief Executive Stacey Snider the financial support they need to leave Viacom Inc.’s Paramount Pictures and start their new venture.
Under the signed agreement, Mumbai-based Reliance ADA Group will invest $500 million equity and provide another $700 million in debt through J.P. Morgan Chase & Co. toward the new venture, which will produce a slate of about six films a year.
Paramount said it is releasing the DreamWorks principals and employees from their contracts. “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 new company will be headed by Spielberg and Snider.
Spielberg, DreamWorks chairman David Geffen and Snider are expected as a next step to tender their resignations from Paramount.
Even after Spielberg and Snider depart Paramount, they will continue to work with the studio on a number of movies. The two parties share rights to many projects, including the upcoming Transformers: Revenge of the Fallen.