Dreamworks Closes On $825 Million Funding
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LOS ANGELES — One of Hollywood's most famous directors, Steven Spielberg, has finally closed a deal to secure $825 million in funding from India's Reliance Big Entertainment, JPMorgan and The Walt Disney Co., his company announced Monday.
The deal represents a huge investment by Bollywood in Hollywood, and sets up DreamWorks Studios to produce about six movies a year to be distributed by Disney starting in late 2010.
"This will allow us to move ahead quickly into production with our first group of films," Spielberg said in a joint statement with his partner, Stacey Snider.
Anil Ambani, chairman of Reliance Big Entertainment's parent Reliance ADA Group, called the partnership "the cornerstone of our Hollywood strategy as we grow our film interests across the globe."
Under the deal, JPMorgan arranged $325 million in senior loans from itself, Bank of America, City National Bank and others. Reliance matched the $325 million with an equity injection that makes it a 50 percent partner in DreamWorks. Disney provided a $175 million line of credit.
One of the first movies from the new company to make it into theaters under the Disney distribution deal will be "Harvey," a Spielberg-directed adaptation of a play about a man and his friendship with an invisible, six-foot-tall rabbit.
Another DreamWorks movie, "Dinner for Schmucks," is being co-financed by Paramount Pictures and Spyglass Entertainment and is set for theaters next year after beginning shooting in October. It is being directed by Jay Roach.
The deal marks DreamWorks' birth as an independent company separate from Viacom Inc.'s Paramount, which paid to operate the unit as a subsidiary for $1.6 billion in 2006, but had chafed at the annual $50 million cost of keeping it going.
DreamWorks opted out of the arrangement with Paramount after the end of three years. It now has 80 employees, down from 120 previously.
While the funding situation was in limbo, Spielberg and Reliance had split the costs of keeping the outfit running, including spending $26.5 million in January to buy 17 movie projects that were in development while DreamWorks was with Paramount.
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08/17/09 07:16 PM ET Associated Press