DreamWorks closes film financing deal with Reliance
Los Angeles: Steven Spielberg`s DreamWorks Studios and Indian conglomerate Reliance ADA Group closed a financing deal on Monday, putting the final touch on a three-year, USD 825 million pact for up to six films a year.
JPMorgan Securities arranged the syndication of about USD 325 million in financing to DreamWorks Studios, which is headed by Oscar-winning director Spielberg and veteran movie executive Stacey Snider. Reliance Big Entertainment, a division of Reliance ADA Group, is matching that amount.
Walt Disney Co will handle marketing and distribution for DreamWorks Studio`s films around the world, except in India where Reliance Big retains distribution.
Disney also will loan DreamWorks Studios USD 175 million under the partnership, which combined with the JP Morgan package and Reliance funding brings the total financing to USD 825 million.
The deal allows DreamWorks Studios to produce five to six movies a year, said company spokesman Chip Sullivan.
The partnership will last at least three years. And it could be augmented if DreamWorks Studios obtains more money from lenders, because Reliance agreed to match whatever the production company can raise up to a total of USD 550 million, or USD 225 million more than its current commitment.
DreamWorks Studios originally envisioned a five-year, USD 1.2 billion deal, but after last year`s global credit crisis made financing scarce, the company lowered its sights.
The first film to be distributed through Disney will be "Harvey," a movie to begin production early next year based on a play that became a 1950 movie classic of the same name.
"Harvey" will hit theaters later in 2010.
The list of financiers JP Morgan brought together includes Bank of America, Wells Fargo & Co and Comerica Inc.
The newly created DreamWorks Studios is a production unit separate from DreamWorks Animation SKG Inc.
DreamWorks Studios and Reliance ADA Group, the Indian conglomerate, announced a plan to work together last year in a film financing deal that allows DreamWorks to start anew after it cut ties with Viacom Inc`s Paramount Pictures.
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