LOS ANGELES, Nov. 27 – As NBC Universal closes in on a likely deal to acquire the live-action film business of its longtime partner DreamWorks SKG, one of the transaction’s more intriguing questions remains: What will the media conglomerate really get if it picks up one of DreamWorks’s most significant assets, the services of the co-founder Steven Spielberg?
Executives with both companies are reluctant to describe the precise extent of Mr. Spielberg’s role in a NBC Universal-owned DreamWorks, though insiders for months have privately called the filmmaker’s involvement an essential reason for any buyer’s interest in the 11-year-old studio.
That is especially true for NBC Universal, where the presence of the director-mogul, who has been making movies there since 1974, has become something of a signature – and where he owns an unusual stake in revenue from the company’s theme park operation.
“He is, in himself, a brand name,” Ron Meyer, president of Universal Studios, said recently of Mr. Spielberg’s reach in the movie, television and, now, video game businesses.
While avoiding public comment, Mr. Spielberg, for his part, has signaled a certain comfort with the notion of sticking close to the studio that has become his home base, if not quite an exclusive one. Even as DreamWorks flirted with other potential buyers in an effort to get a better price, the three-time Oscar winner was quietly renegotiating the lease on his famous, Santa Fe-style offices on the Universal lot, according to a Hollywood executive who has talked to him. (The executive and others spoke on condition of anonymity to minimize disruption of the talks. Mr. Spielberg declined to be interviewed for this article.)
Kathleen Kennedy, a longtime friend and producer at Universal Pictures who helped start Amblin Entertainment (a company Mr. Spielberg has used to continue to produce movies throughout the DreamWorks era), said she was working closely again with him. And the two are looking to a future that assumes continuing ties with the ministudio, which Mr. Spielberg founded with David Geffen and Jeffrey Katzenberg in 1994.
“Steven is extremely committed to DreamWorks,” Ms. Kennedy said. “He doesn’t want it to go away.”
Ms. Kennedy suggested that a revised DreamWorks, even if owned by NBC Universal (which currently handles some movie and home-video distribution functions for the much smaller company), might reflect Mr. Spielberg’s personal taste. “I’m a big believer that the creative process should be in service to a point of view,” she said. “He knows my opinion on this because I have told him. But until the structure is defined, we don’t know.”
In any deal, NBC Universal and one of its corporate parents, the General Electric Company, will almost certainly have to grant Mr. Spielberg wide latitude. Never professionally monogamous, he will most likely remain free to play the field – something he’s done for decades, and sometimes at much greater profit to himself than to the company he was working for.
Of the 23 films Mr. Spielberg has directed in his career, 9 of them were for Universal Pictures, according to the studio. Only two, “The Lost World: Jurassic Park” and the coming “Munich,” were directed since DreamWorks was founded. By contrast, as a producer or executive producer, he has been involved with 39 films, 20 of those for Universal.
This year, Mr. Spielberg had a hand in four theatrical releases, which involved a tangle of Hollywood companies. He directed “War of the Worlds” for Paramount Pictures and DreamWorks; produced “Memoirs of a Geisha” for Columbia Pictures with some DreamWorks involvement; and produced and directed “Munich” for Universal Pictures with DreamWorks. Meanwhile, he was also executive producer of “The Legend of Zorro” for Columbia, but this time through Amblin without DreamWorks.
In television, Mr. Spielberg was an executive producer (uncredited) for NBC’s hit series “E.R.,” again without DreamWorks, and for the television mini-series “Into the West,” one of three mini-series with him as executive producer since 2001, this time with DreamWorks. In addition, Mr. Spielberg was hired last month by Electronic Arts to help develop three video games, working now apart from DreamWorks.
If NBC Universal indeed buys DreamWorks, it will clearly have to accommodate Mr. Spielberg’s prior commitments and his tendency to roam. And when he does work for the home team, the filmmaker won’t come cheap, if he insists on pricing levels he has established in recent years.
Consider the case with “Minority Report,” the science-fiction movie directed by Mr. Spielberg that starred Tom Cruise as a futuristic cop. In the mid-1990′s, 20th Century Fox owned the rights to the movie, having bought them from Carolco Pictures, which was in bankruptcy proceedings at the time. Mr. Cruise was to star in the film and he approached Fox with the idea that Mr. Spielberg should direct, according to two executives involved in the movie.
Released in 2002, “Minority Report” was a hit, bringing in $358 million at the worldwide box office and selling 6.3 million copies on home video. But the biggest winners were Mr. Spielberg and Mr. Cruise, who, as participants in the picture’s income, earned at least $70 million combined, the two executives said. By contrast DreamWorks and Fox, a division of the News Corporation, earned less than $20 million each. Both Fox and Mr. Spielberg declined to comment on the terms of the deal.
One reason Mr. Spielberg is paid so well is because his involvement brings creative input and marquee value that is perceived as enhancing prospects. In the early 1990′s, for instance, Walter F. Parkes and Laurie MacDonald developed “Men in Black” while they were producers at Sony Pictures Entertainment. After they joined DreamWorks in 1994, Mr. Spielberg was asked to be executive producer, and joined the pair in reaping a small fortune when the picture went on to make $587 million in 1997 at the worldwide box office.
That gave Mr. Spielberg rights to participate in the sequel, and yielded the participants (the director, actors and producers) an even greater share of its income, according to Mr. Parkes. The deal helped compound the trend of Mr. Spielberg’s being tied to companies all over Hollywood, with a finger in dozens of prospective films.
“Once he’s involved with a project, he doesn’t like to get rid of it,” said Sidney J. Sheinberg, a producer and former president of MCA Inc., which owned Universal Pictures when it first established ties with Mr. Spielberg.
Such stickiness can pull the filmmaker deeply into projects that do not ultimately yield a full-blown Steven Spielberg movie. That happened recently with “Geisha.” In that case, Mr. Spielberg was first scheduled to direct the movie in 1997, but complications ensued. At one point, the author Arthur Golden was sued over rights to material in the underlying book.
Then, other projects consumed Mr. Spielberg’s attention. And at one point, said an executive involved in the film’s early development who insisted on anonymity fearing retribution from DreamWorks, Mr. Geffen warned that “Geisha” was too costly for DreamWorks to make. Mr. Geffen did not return two calls seeking comment.
Instead Rob Marshall, the director of “Chicago,” was hired and Mr. Spielberg remained a producer. “I know he’s the 100-pound gorilla, or, what do you say? The million-pound gorilla,” Mr. Marshall said. “But here is where Steven is helpful. A lot of producers I work with work from fear. Steven is an artist as well as producer, and he thinks about whether you’ve served the story.”
In one area, at least, NBC Universal has a clear call on Mr. Spielberg’s services – as a consultant to Universal’s theme parks. In 1995, Mr. Spielberg struck a rich deal with MCA, which then owned Universal Studios, to help create theme park rides based on his movies. In Orlando, Fla., there are several, including rides based on “E.T. the Extra-Terrestrial,” “Men in Black,” and “Jaws.”
The terms were generous even by Hollywood standards. MCA agreed to give Mr. Spielberg 2 percent of the revenue earned on ticket sales at the theme parks in Orlando and Japan, said two people apprised of the terms. (The deal is tied to licensing agreements.)
Neither Mr. Meyer nor Mr. Spielberg would comment on how much the director makes from the arrangement, though the amount is clearly sizable: according to a theme park spokeswoman, revenue from the Orlando resort (which includes food, merchandise, parking and other items excluded from Mr. Spielberg’s take) totaled $865 million in fiscal 2004.
Last year, Universal and its venture partner in Orlando, the Blackstone Group, unsuccessfully sought to sell the theme parks. But they hit a snag when, among other things, they could not come up with an amount large enough to buy Mr. Spielberg out of his contract, according to two people who were told of those talks. (Mr. Meyer declined to comment; executives for the Blackstone Group did not return a call seeking comment.)
Whether or not NBC Universal ultimately buys the DreamWorks movie unit, it seems likely to have Mr. Spielberg around, not only as tenant, but as a business partner in the theme parks.
“My advice to him is never sell it at any price,” Mr. Sheinberg, who made the parks deal with Mr. Spielberg in 1995, said of the arrangement. “It’s a steady stream of income for him.”
