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Spielberg leaves Paramount Pictures for Indian joint venture

Text by AFP

Latest update : 2008-12-10

Legendary US director and producer Steven Spielberg will form a new film venture with an Indian company and is leaving Hollywood studio Paramount Pictures.

LOS ANGELES (AFP) — Hollywood directing legend Steven Spielberg is leaving Paramount Pictures to form a new film venture, the company announced Sunday.

The director of such legendary works as "Jaws," "Raiders of the Lost Ark," "E.T: The Extraterrestial" and the "Indiana Jones" franchise, is to form a new movie venture with India's Reliance ADA Group.

Reliance, DreamWorks to start new venture by January

NEW DELHI (AFP) — A joint venture between India's Reliance ADA Group and Steven Spielberg's DreamWorks studio will start up by January and make up to 35 movies over five years, a source close to the Indian company said Friday.

Indian billionaire industrialist Anil Ambani met with Spielberg in Los Angeles late Thursday to finalise details of the new film company which will be headed by current Dreamworks chief executive Stacey Snider, the source said.

Snider was chairman of Universal Studios until 2006.

"The 50-50 joint venture, which will target global audiences, will be launched by January 2009 and will produce 30 to 35 films over the next five years, the source said, valuing the deal at 1.5 billion dollars.

"The two sides still have to wrap up the modalities, the exact quantum of the finance, the exact number of movies... but the deal is happening," he said.

A formal agreement establishing 49-year-old Ambani's status as an international force in movie financing could come next month.

The tie-up with Spielberg, the highest-grossing film director ever, raises the Mumbai-based telecommunications-to-energy group's global profile in the entertainment industry, into which it has been muscling at high speed.

The deal also allows Spielberg to part company with Paramount Pictures, with which the director's relations have been strained.

As part of the financing, Reliance Big Entertainment, the movie unit of chief executive Ambani's group, will supply around 550 million dollars in equity funding to DreamWorks while JPMorgan Securities is heading a bank syndication to raise around 700 million dollars, the source said.

"The figures are still somewhat approximate," the source added.

The money will be used to hive off DreamWorks SKG from Viacom's Paramount, which purchased the studio for 1.6 billion dollars in 2006, and turn it into a private company.

A Reliance ADAG spokesman declined to comment.

The marriage between the top Hollywood studio and the leading Indian company comes as the US entertainment industry looks further afield for cash as the US credit crisis dries up traditional Wall Street and other funding sources.

"Going into the international arena is the next logical step forward for Reliance ADAG. It has entertainment as one of its core drivers," the source said.

Spielberg also "is one of the most renowned film-makers" and a deal with him "is a great global opportunity," the source added.

In May, the group's entertainment arm, Reliance Big Entertainment, said it was looking to put around one billion dollars into eight production houses belonging to Hollywood stars such as Brad Pitt, George Clooney and Jim Carrey to make movies over the next two years along with other film-making plans.

DreamWorks makes live action films such as "Transformers" and "Saving Private Ryan" and animated movies such as "Shrek."

Ambani, ranked the world's sixth richest man by Forbes, has been steadily building an entertainment presence after a highly publicised breakup with his elder brother Mukesh in 2005, in which the two carved up the Reliance empire.

In 2005, the group bought Adlabs Films, one of India's biggest entertainment companies, whose interests span film production to digital cinema. It also recently acquired 250 screens in the United States and 51 screens in Malaysia.

Date created : 2008-10-05