Dreamworks to Merge With India's Reliance? - Bollywood in Hollywood

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Bollywood's Reliance, DreamWorks in tie-up talks

by Penny MacRae
Thu Jun 19, 1:23 PM ET



NEW DELHI (AFP) - India's Reliance-ADA Group is in talks with Steven Spielberg's DreamWorks on a tie-up that could help the director break free of Paramount and boost Bollywood's presence in Hollywood, a source said on Thursday.

A deal would give Spielberg money to assist in financing DreamWorks SKG's exit from Viacom Inc's Paramount Pictures and refashion it as a company that again owns the films it makes.

"It is well known Paramount and Spielberg have a problem. It is well understood DreamWorks is looking for new partners," said the source close to the discussions, saying the Indian company was looking to invest "hundreds of millions of dollars."

The source declined to say when the talks between Reliance-ADAG, based in India's entertainment and financial capital Mumbai, and DreamWorks might conclude. Some reports have said a deal is near. But another industry official with knowledge of the talks told AFP they were still at a "preliminary stage."

The Indian telecommunications-to-entertainment group, controlled by billionaire tycoon Anil Ambani who is married to a former Bollywood actress, declined to comment.

For Reliance-ADAG, a deal with Spielberg -- the highest-grossing film director ever -- would raise the Mumbai-based company's global profile in the entertainment industry that it has been muscling into at great speed.

"India is a great emerging market for Hollywood and so is the US a great market for Indian content. But co-productions are still at early stages. There would be some synergies but that is not the prime driver," the source said.

It is simply that Spielberg "is one of the most renowned film-makers" and a deal with him "would be a great global opportunity for people trying to build an entertainment business," the source said.

In May, Reliance-ADAG's entertainment arm, Reliance Big Entertainment, said it had signed deals with the production houses of Hollywood stars such as Brad Pitt, George Clooney and Jim Carrey to make movies worth about a billion dollars over the next two years, along with a slew of other film-making plans.

Any agreement would mean another major capital infusion from Mumbai, home to Bollywood -- the world's most prolific film industry, producing more than 800 films a year -- into Hollywood.

However, the source said reports Reliance-ADAG would give DreamWorks 500 million to 600 million dollars in equity were "speculative."

"We're certainly talking hundreds of millions of dollars -- you can't talk about this (deal) in tens of millions of dollars -- but the amounts mentioned are speculative," the source told AFP.

Spielberg aims to raise more than one billion dollars in third-party financing to reinvent DreamWorks as a separate company, US reports have said.

DreamWorks, which could not be reached for comment, makes live action films, such as "Transformers" and "Saving Private Ryan," and animated movies such as "Shrek" and its latest hit, "Kung Fu Panda."

Spielberg's contract runs with Viacom until 2010, but he can terminate it early -- towards the end of 2008. Any deal would allow R-ADAG to make a big Hollywood entrance but would not give it creative control over DreamWorks.

Reliance-ADAG, which is also in merger talks with South Africa's MTN to create a top-10 global telecoms firm as it seeks to grow internationally, sees its film-making push as a move to exploit growing convergence between entertainment and telecommunications.