Universal Pictures says talks to distribute DreamWorks films are over. Steven Spielberg and Stacey Snider are now trying to strike a similar, but better, deal with Disney.
Universal says talks broke down after DreamWorks “demanded material changes to previously agreed upon terms.”
What were these changes? Nikki Finke says that DreamWorks, which has been struggling to raise money in these credit crunched times “needed $250 million—$100 million immediately and $150 million in the seond tranche…So Stacey Snider and Steven Spielberg demanded to change the terms of their deal with Universal already announced to the world so it would now include straight distribution and a $250M investment. But Universal balked. The studio was very reluctant to even invest $100M.”
Nikki even claims that DreamWorks was negotiating with Disney behind Universal’s back and when Universal found out, that’s when they pulled their deal:
[T]his morning, Universal got the upper hand: it PULLED OUT of its deal with DreamWorks. “We weren’t going further. This deal got to the point where it’s not in our interest,” a furious Universal bigwig just told me. “And then when you learn they’re negotiating behind your back, it reflects upon what kind of partners you’re getting into business with.” I’ve also learned that, today, Snider phoned Universal Studios prez/COO Ron Meyer to apologise. “We had to do this. Our backs were against the wall. We couldn’t tell anyone about our discussions with Disney.” To which Meyer replied, “What you did was wrong on every level. You guys behaved like pigs.” I now hear that Snider is offended that Meyer calling her that.
Nonetheless, the Universal deal is off, the studio confirmed today, and now DreamWorks is trying to link up with Disney.
Disney was one of the original suitors for DreamWorks, but we thought this was crazy at the time and it still seems nuts now. Mainly, we think Jeffrey Katzenberg will be furious that his former partners are linking up with the studio that fired him forced him to resign after his many years of success running the animation department. Katzenberg’s not officially affiliated with the new DreamWorks, but he still remains close to Spielberg, so who knows how he’ll feel about this linkup.
Variety says Disney “would provide P&A funds, pay-cable slots and possible production co-financing for DreamWorks’ intended six pictures.” Apparently, there was a big dustup between DreamWorks and Universal about an HBO deal, which Nikki Finke discusses in more detail.
But it’s still uncertain whether Disney will actually be able to provide this money. Disney didn’t do great at the box-office last year, Wall-E notwithstanding, and—as DreamWorks discovered—trying to syndicate debt in this environment is not easy. Meanwhile, Disney recently had a Wall Street slate film-financing deal that did NOT perform very well. While banks may be confident in Spielberg and co, we wonder how they feel about Disney’s ability to provide a return on their investment.
A couple more things for you to chew on over the weekend:
- As Nikki astutely points out way back when DreamWorks linked up with Paramount, they got that deal by negotiating behind Universal’s back; we can only imagine how upset Ron Meyer and co. are that they’ve been played again.
- Also, we wonder if these negotiations had anything to do with Ben Stiller’s plans to jump ship to Fox. Just now, we thought Disney might’ve never released Tropic Thunder, so maybe Stiller felt he’d have more artistic freedom with Fox, which incidentally may also have also been in the running to do a distribution deal with DreamWorks this summer.
Business Insider Emails & Alerts
Site highlights each day to your inbox.