Less than two years after director Steven Spielberg and his partners sold DreamWorks SKG to Viacom Inc.'s Paramount Pictures for $1.6 billion, a divorce seems inevitable.
Spielberg and partner David Geffen have felt slighted that they haven't gotten more autonomy and credit within Viacom given the success of their movies this summer. Recent box office hits such as "Transformers" and "Blades of Glory" have lifted Paramount out of the doldrums and heightened resentment between the DreamWorks founders and their owners, tension that has been mounting since the deal was completed 19 months ago.
Smarting from sellers' remorse, the DreamWorks principals are expected to bolt as soon as they are free to late next year. Already, Geffen has been telling people in Hollywood that he and Spielberg plan to look for a new financial backer and studio home.
But any breakup is sure to be messy. Not only is Spielberg knee-deep in a number of major movie productions at the Melrose Avenue studio, he and his partners would be forced to leave behind hundreds of development projects and key executives at DreamWorks as well as those they installed in senior positions at Paramount .
Their departure would lead to an even more bitter rivalry between Paramount and DreamWorks as the two camps would then compete head to head for projects, talent and consumer dollars.
The question for Paramount then becomes whether the studio got its money worth from the expensive bet it made when it bought the 11-year-old live-action studio from Spielberg, Geffen and Jeffrey Katzenberg. How much value do the remains of DreamWorks have to Paramount without the talents of the self-described "Dream Team"?
Top Paramount executives say the acquisition will more than pay for itself.
"The deal for us has been highly profitable and is ahead of schedule," Paramount Pictures Chairman Brad Grey said in an interview today. "It would always be better to have Steven and DreamWorks with us, but of course we'll be OK" if they leave.
Grey acknowledged that the DreamWorks deal "really accelerated our turnaround."