DreamWorks and Reliance JV unaffected by economic downturn

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A DreamWorks spokesman has clarified that in spite of the gloomy market atmosphere globally; the DreamWorks- Reliance ADAG joint venture (JV) is not facing any considerable trouble in fetching finances.

According to the spokesman, the idea of the new studio which will be developed as part of the JV has been received well and banks have committed to help with the finances. It is expected that shooting of films can start from this summer if everything goes according to the schedule.

DreamWorks, headed by Steven Spielberg and Stacey Snider, needs about $325 million in the first stage of financing. Reports have indicated that the company has recently managed lending commitments for almost half of the required amount. Anil Ambani’s Reliance has said that it will match the finances DreamWorks raises up to $550 million.

The Hollywood Reporter reported on Wednesday that the $150 million loan has been assured by bankers at City National Bank and Comerica, who will provide a combined $75 million or more, while JP Morgan will lend the rest of the $75 million singlehandedly.

It was back in September, 2008 when principals at DreamWorks struck up a $1.5 billion deal with Mumbai based Reliance to produce films, ending their partnership with Viacom. In the following month, it reached an agreement with Universal Studios for distribution of DreamWorks’s films. According to the deal which comes into effect in 2009 for 7 years, Universal will charge 8 percent distribution fees for around six films a year.

It should be noted that Steven Spielberg worked with Universal Studios for twenty years before forming DreamWorks with music magnate David Geffen and former Disney Studios chief Jeffrey Katzenberg back in 1994. The trio however decided to partner with Paramount back in 2006, a tie up which lasted till 2008.