Spielberg "Moving" DreamWorks To Universal?


Steven Spielberg has very fond feelings for his home of 30 years at Universal Studios. So much so, that he never moved offices. Even though his DreamWorks studio is owned by Viacom , he never made the move over to the Paramount lot. Now the fact that he kept his studio at Universal may prove convenient. Spielberg and David Geffen are reportedly meeting with NBC Universal parent General Electric (also the parent company of CNBC) one day this week to discuss moving their production shingle from Paramount back to Universal.

It's been a clash of the media titans leading up to this quiet meeting on the Universal lot. Spielberg and Geffen haven't liked the way they've been treated as part of Viacom--they added 'Studios' to DreamWorks' to distinguish the fact that they're creatively independent from Paramount. Viacom CEO Phillippe Dauman has said their financial contribution to the company is completely immaterial. Not a good thing to say to powerful folks like Spielberg and Geffen.

From what I hear from my sources, Spielberg etc, really didn't like the strict limits that come from being part of a public company--it takes a while to cut a movie star a multi-million dollar bonus check, and Spielberg waits for nothing. And Universal, which is foundering in the number five spot for studio market share, could use the help of DreamWorks creative team.

So what'll happen? DreamWorks would likely find its own financing--anywhere from the $400 million they currently get from paramount, to up to $700 million a year--to make eight movies annually. Then Universal would distribute the films, handling the "P&A" or 'prints' (distribution of the physical films) and 'advertising.' And this would perhaps be a return to the expected order of thing sin Hollywood. NBC Universal was expected to buy DreamWorks, when Paramount swooped in and paid $1.6 billion for DreamWorks nearly two years ago.

I have no doubt that this power team would have NO problem raising this money. If Tom Cruise could raise the millions in financing for his new United Artists label. Even if this hedge fund financing that's flooded Hollywood dries up Spielberg will still find plenty of eager dough. He's such a proven entity, such a no-lose bet.

Another interesting Spielberg factor--he's holding back on having the movies he's directed released on high definition. Even though his parent company, Paramount, is loyal to HD DVD, he isn't releasing most of his films on the new format at all. But, he has released his classic, "Close Encounters of the Third Kind" on Blu-ray--because it's a Sony picture, he's allowed to. Perhaps that's a shot across the bow to his parent HD DVD camp.

I'm reporting on the high definition format wars, so more on that later.

Questions? Comments? MediaMoney@cnbc.com