The Reliance ADA Group and the principals of Dreamworks – director Steven Spielberg and CEO Stacey Snider – have inked a deal to form a $1.2 billion studio, reports WSJ. Of this amount, the ADA Group will invest $500 million in equity, and $700 million in debt through JP Morgan Chase. The ADA Group, according to the Hollywood Reporter (THR), will have a 50 percent stake in the deal.
The deal has been struck through Reliance Entertainment, according to Business Standard. In 2005, Reliance ADAG had acquired 51 percent stake in Adlabs Films, which produces films, and also owns multiplex theatres. Last year, they acquired Pune based animation company Anirights, which has been rebranded as BIG Animation
The studio will produce around six films a year. Dreamworks reportedly intends to strike a deal with Time Warner for HBO, and the films may be distributed by Universal Pictures. There are, however, expected to be a few teething troubles: Dreamworks was sold to Viacom in 2006, and Spielberg and Snider have had disagreements with Paramount Pictures. Dreamworks is expected to negotiate for rights to keep one or more projects that they were working on with Paramount, for the new company. That, it is expected, will come at a price. There are around 150 Dreamworks executives currently with Paramount, and while David Geffer, Spielberg and Snider had exit clauses, the rest will need Paramounts permission.
George Soros Connection? Paramount had sold controlling interest in its Dreamworks acquisition for $900 million to the Soros Group and Dune Capital in May 2006. Remember that Reliance Entertainment is expected to raise $100 million from George Soros…though there have been reports of issues over valuation.