A New DreamWorks/Paramount Theory--UPDATE!

Remember that Trojan Horse theory that was floating around Hollywood about a year ago, the one where Stacey Snider was going to replace Brad Grey as the head of Paramount? This article about the possible divorce between Paramount and DreamWorks in BusinessWeek reminds me of that a little. There's nothing really wrong with the theory. It's just that the pieces can be arranged to tell all different kinds of stories.

But while I could see why Snider taking over Paramount would at least have made business sense (and the DW tail has in fact wagged the Paramount dog in many respects), I'm not exactly clear why Spielberg would want to split with Paramount at this point. Because he's pissed at Grey? At Redstone? Come on. The merger was hard enough. You think Spielberg wants to go through another divorce now, right when both companies are experiencing success? I'm not saying the relationship with Paramount hasn't had a few hiccups, or that Grey's putative credit-grabbing hasn't rubbed people the wrong way, but it seems to me that Spielberg wants to spend most of his time making movies. And Geffen has long had bigger aspirations than just the movie business. Right now, it seems like both men can do exactly what they want to do. So why would they want to make a change?

From BusinessWeek:

The smart money is betting that Spielberg will move on, despite Grey's charm offensive. "Things are better between them--marginally," says a Hollywood executive who has worked with Paramount. "If it continues like it is, they're gone." In the meantime, Grey has been beefing up the Paramount slate of movies, signing the likes of director Martin Scorsese and Lost creator J.J. Abrams. But if DreamWorks pulls out, watch the talent flee. One of the first to go would be Snider, who has a "key man" contract that allows her to leave if Spielberg pulls out.

What's more, Spielberg could set up an entirely new company called, yes, DreamWorks. That's because DreamWorks Animation Inc., which was spun out of the main DreamWorks studio, controls the name. (Paramount distributes Shrek and other animated films produced by DreamWorks Animation but doesn't own them.)

Spielberg's star wattage is such that other studios would fall over themselves to lavish him with money and autonomy. Private equity shops say they would be only too happy to spot Spielberg a billion or two, but suspect he would feel more comfortable inside another studio. For the moment the director is incommunicado, working in Hawaii on Paramount's Indiana Jones sequel. But the next big action story on his calendar may just be called Escape from Paramount.

UPDATE: On her blog, Variety's Anne Thompson agrees that Spielberg probably isn't going anywhere, and asks an interesting question: What if Paramount bought DreamWorks animation? And Variety reporter Dade Hayes discusses who might be behind the balloon floated in the BusinessWeek piece:

The Paramount story left a lot of people scratching their heads as well, though there is a stubbornly persistent belief in the media and financial communities that the tension is real.

Grey, for his part, insists he has done everything possible to mollify DreamWorks, and Par has maintained all along that everything is copacetic. DreamWorks now has greenlight authority on projects costing up to $100 million and a larger production budget.

DreamWorks has delivered four straight box office hits to Par this year, including robot actioner "Transformers," which bowed over the July Fourth holiday and has already made nearly $400 million worldwide. Because of DreamWorks, Par is No. 1 in market share, crossing the $1 billion mark at the domestic box office earlier in the calendar year than any other studio. On the other hand, a slate of more commercially challenging award-season fare is in the offing, such as "Things We Lost in the Fire," "The Kite Runner" and "Sweeney Todd."

It was unclear what agenda was served by the BusinessWeek article, which the mag emailed to outside journos, following up with a call.

Whenever there are rumors about DreamWorks, of course, speculation tends to focus on notorious deep throat David Geffen. While he is not quoted in the BusinessWeek article, it does position Geffen as a shaman-like figure advising Spielberg and his confreres.