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Your Friday Night What The What?!?!

OK, so I realize I had to work all day unlike you jive turkeys, so I just found out about this…

DreamWorks Logo

This morning Nikki Finke broke the story (heck of a scoop, by the way), which has since been confirmed, that if things continue according to plan Disney will announce on Monday that it has signed a deal to distribute films for Steven Spielberg’s Dreamworks studio.

Ok, I didn’t expect that one.

The story, in short:

Jeff Katzenberg leaves Disney in 1994 thanks to Michael “I hate the little midget” Eisner’s managerial shenanigans. Katzenberg teams up with Spielberg and music maven David Geffen to form DreamWorks SKG, intended to be the first new Hollywood studio in decades. They announce plans to build a high-tech production lot and animation studio. Things don’t quite work out that way.

Money issues persist over the years, although DreamWorks does luck into a distribution deal with PDI, which makes Shrek and subsequently a great deal of money. The more ambitious studio-building plans fade over the years, and in 2006 DreamWorks is sold to Viacom/Paramount. Lots of arcane business deals take place; the animation division is spun off into its own separately-traded company and film rights are auctioned off. DreamWorks and Paramount don’t get along, and in 2008 Spielberg and friends sign a financing deal with Reliance ADA Group, a Bollywood media conglomerate.

The deal with the Indian company would allow DreamWorks to spin itself back away from Paramount into an independent production company, but they’d still need someone to distribute their films. In mid- to late-2008 it was widely known that Disney was vying for a deal, but DreamWorks eventually chose Universal as a partner due to Spielberg’s long history with the studio. Finke claims that Geffen preferred Disney and even Fox at the time, but Spielberg’s nostalgia won the day and an agreement was reached last fall.

An agreement, but not a deal. As the year concluded, DreamWorks’ financial situation worsened. When the global credit markets dried up, DreamWorks couldn’t borrow enough money to consummate their deal with Reliance ADA and became more demanding in their negotiations with Universal. Universal, not immune to the worldwide financial woes, could not keep up with DreamWorks’ constantly shifting conditions and tempers frayed. Then, apparently, Universal discovered that DreamWorks had secretly sent emissaries to try and negotiate better terms with Disney. This was apparently the last straw for Universal, who subsequently called off the wedding and cleared the field for a waiting Disney.

This is all not only very surprising but fairly bizarre. Disney has been very concerned with cutting production costs in recent years (hence the ditching of Walden Media and the Narnia franchise), and have tried to pare their release schedule down to the bare bones. Iger’s professed goal was a small slate of films each year, with only the best, family-friendly and high-profit concepts sent into production. Now they’re hooking up with DreamWorks, whose live-action fare doesn’t typically fit into the Disney mold and whose pictures will clutter up the release schedule. Add to this that DreamWorks had some fairly steep demands in their negotiations with Universal, and it’s hard to imagine Disney just handing over several hundred million dollars upfront along with sweetheart distribution fees and whatever else Spielberg might require.

Not that I’m complaining…

So aside from the sheer insanity of all this, why the coverage here? Well, it’s possible that this deal with have some interesting side effects. As Finke mentions, Spielberg has some interest in the theme park field and seems keen to get involved. As a life-long Disney fan (Walt Disney fan, more importantly), Spielberg might be able to bring a bit of creative juice (and funding) to the parks. And since Dreamworks Animation’s distribution remains with Paramount we’ll be saved from Shrek pooting around in Fantasyland.

Also intriguing is the possibility that one of the several abandoned Roger Rabbit projects might see the light of day. The original film was a co-production between Disney and Spielberg’s Amblin Entertainment, and any use of Roger over the years required the assent of both parties. This is why the character, once so prominent, basically vanished once DreamWorks was founded as a competitor to Disney. Several ideas for sequels were developed over the years but went nowhere due to corporate indifference and conflict. Can Bob Iger, the man who brought Oswald the Lucky Rabbit back into the Disney fold after 80 years, recover another lapine prodigal? We shall see…

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3 comments to Your Friday Night What The What?!?!

  • great post! thanks for condensing this craziness into something manageable, as I was in complete shock when I heard this news the other day. and actually, still shocked. I just hope Disney Parks don’t start feeling like Universal with Spielberg in play, even in the slightest.

  • […] you’ve no doubt seen by now, the reports were true and, last Monday, Walt Disney Pictures signed a deal with Steven Spielberg’s […]

  • Matt – I already think that Hollywood Studios/Studios Paris/California Adventure feel too much like Universal already! At the moment it doesn’t look like Spielberg will be playing a role in the parks, but hopefully any future contributions would lead us away from the Universal style into a more tradition Disney mold. We’ll see…

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