Spielberg rejoins Universal in DreamWorks deal

[October 14, 2008]  LOS ANGELES (AP) -- Steven Spielberg's DreamWorks studio has signed on with Universal Pictures to distribute its films as his company parts ways with Paramount.

Under the seven-year deal, Universal will distribute up to six DreamWorks movies a year domestically and overseas, except for India, executives for both companies said Monday.

Spielberg made his early films, including "Jaws," for Universal, and his Amblin Entertainment production company remained based on the Universal lot even after Paramount acquired DreamWorks in 2006.

"Universal has always been my home base, so this agreement starts a new chapter in what has been a long and successful association," Spielberg said in a news release. "While it feels great to come home again, it feels like I never left."

Universal will handle distribution in exchange for an 8 percent fee on revenues.

The deal had been anticipated as DreamWorks broke off from Paramount, where there had been ongoing friction over the costs of keeping Spielberg and his outfit there.

In a partnership with Reliance Big Entertainment of India, DreamWorks has lined up $1.5 billion to finance its future film slate. Reliance is handling distribution of DreamWorks films in India.

Remaining in charge at DreamWorks is Stacey Snider, who became chief executive officer in 2006. Snider previously was chairwoman of Universal Pictures.

"I really feel like it is a homecoming for Steven and Stacey," said Marc Shmuger, Universal Pictures chairman.

DreamWorks films already finished or nearing completion at Paramount, such as the dramas "The Soloist" and "The Lovely Bones" and next summer's "Transformers" sequel, still will be distributed by Paramount.

About 30 other films in development while DreamWorks was at Paramount are being split between them. They will retain the option to co-finance and co-distribute those films.

David Geffen, who co-founded DreamWorks SKG with Spielberg and Jeffrey Katzenberg in 1994, negotiated the deal but is not joining the new incarnation of DreamWorks.

The deal does not affect films from Katzenberg's DreamWorks Animation, which was spun off as a public company in 2004. DreamWorks Animation's distribution deal with Paramount runs through 2012.

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Universal is owned by NBC Universal, a unit of General Electric Co.; Paramount is a division of Viacom Inc.

[Associated Press; By DAVID GERMAIN]

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