Spielberg ready to tie up with Bollywood firm

Published on 09/08/2008 19:19

STEVEN Spielberg was on the verge of creating a media group spanning Hollywood and Bollywood last night, as it emerged that he is close to completing a deal with one of India's largest entertainment firms.

Reports from the US said that a tie-up between Spielberg's DreamWorks and Mumbai's Reliance, owned by finance magnate Anil Ambani, to build a global film company is nearing completion.

The deal with Reliance is the initial step in Spielberg's and DreamWorks co-founder David Geffen's plan to leave Paramount Pictures and set up their own studio to make films to be distributed by a soon-to-be-determined studio.

Speculation has swirled for months regarding the next probable move for the duo, as their long-troubled relationship with DreamWorks parent Paramount, a unit of Viacom, flared up publicly last autumn.

Under the agreement, Reliance would invest about 260m equity in the new movie venture and another 260m in debt through JP Morgan Chase, according to sources close to the situation.

A Reliance spokeswoman was unavailable for comment, but people familiar with the situation said an agreement will probably be reached this week, allowing Spielberg and his DreamWorks team to leave Paramount as early as November.

Spielberg is said to be looking closely at Universal Pictures, where he started his career, to distribute the venture's films, although no agreement has been reached.

DreamWorks was acquired by Paramount for 830m in 2006 and produced such hits as Dreamgirls while under its roof.

This year Reliance made its first splash, announcing at the Cannes Film Festival in May that it would provide funding to eight film production houses headed by some big Hollywood stars.

It hopes to develop some 30 scripts, and put perhaps 10 into full production.

It said it had signed deals to make films with the production firms of Hollywood stars Nicolas Cage, Jim Carrey, George Clooney, Tom Hanks and Brad Pitt, and filmmakers Chris Columbus and Jay Roach.

Reliance, which has 69 films and 20 TV stations, and owns 45 radio stations and India's biggest cinema chain, has been in entertainment in India for only three years. Ambitious to grow, it has publicly stated that it wants to be worth 5bn.

The move marks a significant step forward in Spielberg's desire to capture the Indian market. According to Ernst & Young, Hollywood films claim only a 3-5% share of India's box office, while Indian characters are often figures of fun in US films.