THE BLOG
03/12/2009 05:12 am ET Updated May 25, 2011

DreamWorks Fumbles, Calling David Geffen....

By all accounts, the leadership at DreamWorks has left a trail of fury and resentment behind them at Universal, their partners for a distribution deal who were unceremoniously dumped when DreamWorks started negotiating with Disney for a better deal. (That deal was concluded today.)

In the course of family affairs that is the close-knit business of Hollywood, this is the equivalent of sleeping with your sister-in-law on Thanksgiving. Not good.

When word leaked on Friday morning that DreamWorks had gotten all hot and heavy with Mickey Mouse, Universal was furious.

Let's not forget this is the studio where Steven Spielberg got his start, where his production company Amblin has been for years, and where "Jaws" has had a prominent place to hang in the theme park for a couple of decades.

It is also, of course, where Stacey Snider, the head of DreamWorks, used to reign supreme as the head of the movie studio.

In an attempt to get ahead of the leak, Snider began frantically calling her former colleagues at Universal on Friday morning to let them know that she was sorry, that there'd been a misunderstanding - but that they'd been left at the altar.

Most of them didn't take her call. That's because they'd already learned the news over the web that a deal with Disney was imminent.

BFFs/Worst Enemies Ron Meyer of Universal and David Geffen formerly of DreamWorks are accustomed to sniping at one another on a daily basis. But with Geffen now retired and distanced from these negotiations, apparently other rules are in play.

Apparently the key man calling the shots in this scenario is not Snider at all, but Allen Levine, the attorney-financier from JP Morgan's entertainment advisory group, and the representative of Reliance Big Entertainment's interests.

Perhaps Levine doesn't know how it works in Hollywood. But he's been a bull in this china shop. For failing to have the courtesy of informing Universal of their intention to negotiate elsewhere, DreamWorks is being ripped by Universal executives behind the scenes. First, for changing the terms of the distribution deal that was announced four months ago. Second, for shopping their deal.

"They are inept," said one angry Universal executive, who said Universal has considered suing for breach of the terms of the deal that had been in place. "Just the blind leading the blind. There is no communication going on over there."

Even DreamWorks people admit they bungled this. "DreamWorks may have handled it inelegantly but these are difficult times," admitted one senior executive close to the company.

Difficult indeed. Since gaining its independence from Paramount last year, the movie company (not really a "studio," since it does not have a distribution apparatus) has struggled to match the money promised by Reliance Big Entertainment.

Despite the apparently imminent deal with Disney, DreamWorks teeters on a thread. It's a company that could sorely use the experience and savvy of founding executives now gone, including the energetic networking of Jeffrey Katzenberg, now tied to the animation company.

Sigh. Where is David Geffen when you need him?