Reliance Group Bails Out Obama Allies at Dreamworks
Steven Spielberg’s failing film company DreamWorks is being bailed out by India’s Reliance Entertainment – to the tune of more than $200 million.
DreamWorks has a troubled history; founded in 1994 by Spielberg, former Disney President Jeffrey Katzenberg and media mogul David Geffen, the company that dreamed of being a major studio was sold to Paramount Pictures in 2005. But Spielberg and Stacey Snider differed with Paramount, and reclaimed the company. In 2009, they made an arrangement with Reliance whereby they received $325 million, but the company, which has 80 employees, kept losing money on their movies. Titles included "I Am Number Four," the big-budget bomb "Cowboys & Aliens," "Fright Night" and "Real Steel." "The Help" was a success, but it was also backed by Participant Media, and "War Horse" did mediocre business.
DreamWorks was initially supposed to make six films a year but with the new deal from Reliance will only produce three to five. Two of its movies to come, Spielberg’s own 2012 "Lincoln" and 2013’s "Robopocalypse," are being co-financed by 20th Century Fox. The company has only two films currently scheduled for 2012, "Lincoln" and "People Like Us." Reliance apparently wants Spielberg to eschew period pieces like "War Horse" and "Lincoln" and return to the popcorn, effects-heavy movies like "Raiders of the Lost Ark."
Spielberg himself has always been most successful when directing light-weight fare like "Jaws," "Close Encounters of the Third Kind," "Raiders of the Lost Ark," "E.T." and "Jurassic Park." So why hasn’t Reliance cut him off yet?
Part of it is likely the fact that Spielberg and Geffen are both close with the Obama administration. The Reliance Group has dealt with the Obama administration in questionable ways. In June 2010, the Export-Import Bank of the United States rejected a loan guarantee to Reliance to buy $600 million worth of equipment due to environmental concerns. When Democrats complained that 1,000 jobs would die if the deal didn’t happen, the Obama administration stepped in – and suddenly, the Bank gave the loan, with the condition that Reliance promised to build an enormous renewable project in India.