CEO Philippe Dauman of Viacom had a point to make to investors at a media conference this week. Dauman said that losing star producers and DreamWorks chiefs Steven Spielberg and David Geffen would be "completely immaterial" to Paramount and Viacom. He made this comment to investors at Goldman Sachs' media conference, adding that the company is preparing for business without the DreamWorks Studios founders if the two sides can't come to terms renewing their deal.
Viacom's Paramount Pictures acquired DreamWorks for about $1.6 billion, closing the deal in early 2006. Now Spielberg and Geffen's deals expire in late 2008. While they probably wouldn't be able to take DreamWorks' name with them, they'd be taking the company's brain trust.
Is Dauman bluffing? Certainly the powerhouses' presence at Paramount is not immaterial. Paramount itself is in the midst of an impressive turnaround but DreamWorks was involved in all its strongest films so far this year. This spring "Norbit," "Blades of Glory," and "Disturbia," all big hits, all came from DreamWorks. And "Transformers" was a huge success--a joint venture between DreamWorks and Paramount.
Dauman may have been exaggerating about how little they need Spielberg and Geffen, but he is smart to start planning for a different kind of company without them around. Does he think that in this new credit crunch environment it'd be hard for the duo to get film financing? Even if the hedge funds pull back their financing, there will always be another group of investors wanting to pour money into movies, especially those from the DreamWorks team.
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