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David Poland

By David Poland poland@moviecitynews.com

SvapnaPrayatna

A couple of things about the Indian deal with DreamWorks.
1. It

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11 Responses to “SvapnaPrayatna”

  1. Citizen R says:

    What about the Transformers franchise? Paramount retains part ownership and distribution rights over that, don’t they?

  2. David Poland says:

    Yes, there are a variety of DreamWorks elements that will be left behind… not $700 million worth.
    And even if the deal ultimately broke even, the idea of putting a studio on virtual hold – which breakeven would be – for 3 years before having to rebuild again is no one’s idea of a good business strategy.

  3. TheVicuna says:

    You’re both right and wrong on this, David.
    You forget the fact that the first thing Paramount did was to pawn the Dreamworks library off on George Soros. So that “$900 mil floating in syrup,” as you put it, is his problem, not Paramount’s.
    Yes, Par probably DID overpay and, yes, they definitely paid more than GE would have at the time. But (and this is a big but) the deal has definitely been profitable overall for them, thanks to the aforementioned library sale, animation distribution fees and that amazing run Dreamworks had the year that Transformers and Blades of Glory came out. (The value of owning the Transfomers franchise alone — assuming they don’t fuck up the sequels — makes the deal profitable). Comparing it to the Sony/MGM or AOL/TW deals is naive, at best. If anyone is overpaying and getting fleeced, it’s the new Indian buyer, who is basically paying $500mil for a term deal.
    The only reason Dreamworks had to put itself on the market in the first place is that an impatient Paul Allen (stretched thin from his Charter Cable boondoggle) forced the company’s hand. Geffen’s initial ire came from thinking he’d been fleeced by Paramount — once that Transformers money started rolling in, he was livid it was going into Par’s pocket and not his.
    Now, if you want to argue the merits of Paramount’s letting Dreamworks go, that’s another matter. Dauman easily could have renegotiated to keep Geffen and Spielberg happy and was an arrogant idiot for publicly humiliating them, thus turning the situation into a Mexican standoff. I also agree that the costs of rebuilding Paramount from scratch are going to more than eat up whatever profit the deal generated. But don’t criticize the deal itself, which was solid and, frankly, the only smart move Brad Grey has made.

  4. Martin S says:

    Solid analysis Vicuna. My only issue is that SKG was looking for a deal where they got to re-mold whatever studio they merged with and to not be treated like an uber-shingle, which is what Grey did. Can’t forget that Spielby was left at the alter by Uni and only took the Grey deal because of promises and mentioned pressure. IMO, the benefit Paramount got was much shorter and narrower than they expected which is why the gamesmenship was allowed to get out of control.
    As for the NBC/Uni spin-off specualtion, I wouldn’t touch NBC unless you could shitcan the entire management, but Zucker’s contract made him a Gordian knot within the whole GE operation – and he’s the root of the disaster.

  5. Roman says:

    “Anyone suggesting that NBC/Universal should have made the deal Paramount made two and a half years ago is a fool. The Paramount deal to

  6. Roman says:

    Sorry, for the redundancy. I should start reading other people’s comments.

  7. David Poland says:

    Uh… Soros didn’t buy the library outright. This is the part of the story that no one seems to bother reporting on. It was a holding deal, much like Sony and MGM. That part of the deal is not at its end.

  8. David Poland says:

    You guys are victims of the trades.
    Yes, I wrote about Paul Allen for the entire 18 months he was itching to get out. He was hardly impatient. He meant to be out in 5 years, couldn’t, and the company couldn’t operate freely carrying all that debt that they could never get out from under. He waited a decade and he got a minimal return. Not sure you can blame him for anything. He wanted out much earlier.
    The deal was contingent on Viacom not laying out $1.6 billion in cash. But even the $700 million is not a very profitable deal. However, the $900 million is still floating out there.
    Dauman never had a chance to “please” the DWers… there were only ever two options… DW buying Par or DW leaving Par after 3 years. That was always the plan. Par could have been more hospitable and Brad could have pissed SKG off less, but that was never in the cards. Geffen took the deal to Grey… was rejected… went to U… was asking too much… ran a game of Grey… got more than he could ever have gotten anywhere else.
    Who wants to guess at how much laying off half the staff at both companies cost Par?
    When you look at the profitability of movies, you need to take into account how many dollars are coming off the top on the DW movies. Transformers + $700 worldwide = $385 in rentals = $300m after Spielberg gets his cut = $185m on production, $150m w on marketing becomes roughly $50m in the hole on theatrical. So… Paramount will likely net $100 million or so profit on the film… or $50 milion more than they would have made simply co-funding the film, which is what they would have done without the DW buyout.
    You can argue the numbers are rough. But you can’t argue that Paramount is going to make $700 million on Transformers because they “bought” DreamWorks… or even $200 million.
    The question is not whether Paramount is in a worse place than before DreamWorks… the question is whether the studio will be in a better position when DW leaves. And the answer is a resounding, “No.” Not on Wall Street. Not fiscally. Not in perception. Not in production.
    I remember when people thought AOL/Time-Warner was a good deal and then they were shocked/shocked that it wasn’t. You’ve got to look past the press releases.
    A billion dollar year or a two billion dollar year mean NOTHING anymore. The studio leading in grosses means NOTHING. Money is not defined by grosses. It is defined by profits. It is defined by ongoing assets.

  9. T. Holly says:

    Jewbu and some fighting brothers produce svapna (dream state) prayatnah (zealous and spontaneous) effort effective in fulfillment (saadhakah).
    http://www.businessweek.com/globalbiz/content/jun2008/gb20080618_504190.htm

  10. Aladdin Sane says:

    I’d love to see Spielberg do any sort of musical. He’s always said he’s wanted to do one…what’s stopping him? There must be some Broadway show that would be a good fit for him.

  11. Bennett says:

    I would love to see Speilberg take a stab on filming the Broadway show WICKED…..as long as it is not a bloated production like HOOK I think it has the potential to be magical…

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I was walking down the street and I ran into Bradbury — he directed a play that I was going to do as an actor, so we know each other, but he yelled “hi” — and I’d forgot who he was.

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