Spielberg sells his dream factory

It just goes to show that no matter who you are in Tinseltown, it’s still hard to stand on your own in the corporation-ruled film industry these days. Paramount Pictures swallowed up DreamWorks SKG in a deal worth $1.6 billion, in a deal which gives the Viacom-owned corporate behemoth (also rulers of MTV and Nickolodeon) the talents of Steven Spielberg on tap. The ‘Berg co-founded DreamWorks 11 years ago with his friends, music mogul David Geffen and former Disney film chief Jeffrey Katzenberg.

The three men had managed to guide their boutique studio through the murky waters of Hollywood television and film production, kicking off their dream factory with 1997’s The Peacemaker, starring George Clooney and Nicole Kidman. Over the years, DreamWorks produced several global hits, many of them Oscar attracters, including Gladiator, Saving Private Ryan and American Beauty. But without the multi-platform operations owned by their bigger, better financed rivals (no TV networks, etc), DreamWorks felt the pain a lot more when one of their blockbuster wannabes flopped, as happened with The Island this summer.

Michael Bay’s clone stinker proved to be one of the final nails in the coffin, and initial suitors NBC Universal tried to get DreamWorks to drop its price after The Island tanked. But Paramount moved in and trumped NBC’s $900 million bid.

Paramount will reportedly sell DreamWorks’ back catalogue, hoping to fetch somewhere in the region of $1 billion for it. They will also take over the television arm, taking over hit shows such as Spin City. DreamWorks Animation, however, responsible for the hugely successful Shrek movies, will remain independent, with Katzenberg keeping his hand in the animation outfit. Paramount will distribute the cartoon studio’s future product.

“We couldn’t be more excited about having Steven Spielberg and David Geffen and the amazing roster of talent at DreamWorks join the Paramount family,” said Viacom honcho Tom Freston. “We look forward to our new partnership with Jeffrey Katzenberg and DreamWorks Animation.”

Brad Grey, Paramount Chairman and CEO made the announcement and echoed Freston’s sentiments: “With the incredible talents of Steven Spielberg, Hollywood’s most gifted and respected director and producer, and David Geffen, the most creative mind in show business, Paramount will be able to significantly enhance its pipeline of groundbreaking motion pictures.”