Steven Spielberg and his team at Dreamworks SKG have finally completed their $1.2 billion financing deal with Indian entertainment conglomerate Reliance ADA Group.
Notably, this gives Spielberg the financial backing to leave Viacom's Paramount Pictures and will likely force some sort of change or restructuring at the studio.
Here's the deal: Reliance ADA Group will invest $500 million in equity, with JPMorgan Chase providing $700 million in debt, allowing the new company to produce about six movies a year. The new company will be run by Spielberg and DreamWorks Chief Executive Stacey Snider. David Geffen, a Dreamworks principal (the G in SKG) is expected to resign from the current studio and not be involved i nthe new venture.
The big question: through which studio will the Spielberg's new company distribute its films? Rumor has it that Universal Pictures (also owned by CNBC's parent General Electric) is a top contender. (Spielberg's office is still on the Universal lot, where he started his career with Amblin entertainment).
When I asked Universal Chief Ron Myer what he thought about distributing Spielberg's films back in July at the Allen & Co. conference, he said he'd definitely be game.
But the reality is, Spielberg and Snider's relationship with Paramount is far from over. Their futures are necessarily linked with shared rights on many projects, including a sequel to "Transformers" which is in the works now. Brad Grey, Paramount's head, stressed that to me, explaining that even if they distribute through another studio, they'll continue to work together.
While Spielberg will take some of his projects in early development with him, the majority of projects in the works will stay at Paramount. Which raises another question: which and how many of the DreamWorks team will Spielberg be able to bring with him to the new venture?
What's in it for Reliance? A key stronghold in the Hollywood entertainment scene and the opportunity to create a new high profile. The plan seems to be for the Indian conglomerate to build a global empire, and a globally-recognized name like Spielberg seems like as good a place to start as any.
Questions? Comments? MediaMoney@cnbc.com