David Geffen Using the Media to Make a Deal?
By James L. Hirsen, J.D., Ph.D.
According to a report by the Internet site The Deal, a source indicates that leaking a story about a suitor to juice up negotiations would be “classic Geffen.”
In covering the matter, the New York Times quotes an unnamed studio veteran as saying, “This is what [Geffen] does really well,” suggesting that deal talk details may have been exposed to reporters to stir up interest.
In 2005 Geffen deftly juggled suitors for DreamWorks, and Paramount’s winning bid of $1.6 billion came after a flood of press coverage of a bid by Universal of $1.5 billion.
Geffen and partner Spielberg have hit some snags in their negotiations with DreamWorks owner, Paramount, and as if it were scripted, along comes Reliance Big Entertainment of India, ready to infuse DreamWorks with half a billion bucks and allow the boutique company to be independent once more.
If Geffen is the one who publicized Reliance’s interest, it could end up drawing interest from other potential investors.
The owner of Reliance, Anil Ambani, a major player in Bollywood, is an Indian billionaire who owns movie production facilities and theater chains in his home country. He also owns a chunk of Prime Focus Group, an Indian post-production company that has been acquiring Hollywood business interests.
A Reliance investment in Geffen’s company would result in a much smaller DreamWorks, with an output of about a half-dozen films per year. A newly infused DreamWorks would likely still work with Paramount for distribution of movies.
Paramount would most likely want to continue to control the films produced by DreamWorks since the separately owned DreamWorks Animation studio, run by DreamWorks SKG partner Jeffrey Katzenberg, distributes smash hits like “Kung Fu Panda” under a separate agreement.
Will the influential studio founded by Spielberg, Katzenberg and Geffen work out a deal with Paramount, be bought by a yet to be named company or become independent again?
So far DreamWorks, Paramount, and Reliance are declining to comment.
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James L. Hirsen, J.D., Ph.D.
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