Paramount-DreamWorks II: The Riposte

Viacom C.E.O. Philippe Dauman's slighting comments about the prospects for Steven Spielberg and David Geffen to take their marbles elsewhere when their deal with Paramount is up in 2008 didn't take long to generate a response. What's slightly surprising is that it came from DreamWorks animation honcho Jeffrey Katzenberg, who has repeatedly expressed his happiness with Paramount' s services as the distributor for his `toons, in an arrangement that's separate from the features done by the Spielberg/Geffen arm of DreamWorks.

Here's what Katzenberg told the same conference where Dauman had made his remarks, as reported by Variety's Dade Hayes:

"As a filmmaker, storyteller, artist and conscience, Steven Spielberg is nothing short of a national treasure," Katzenberg said at the Goldman Sachs Communacopia media confab. "To suggest that not having Steven Spielberg is completely immaterial seems ill-advised. I think calmer heads need to prevail here."

Katzenberg was quick to accentuate the positive, noting that that his company has a "contractual and working relationship that is below the radar of all this." and that Paramount has done" an outstanding job in the servicing of our films and our company. From a marketing and distribution standpoint, you have to give them straight-As, and I'm a pretty tough critic." (The follow-up remarks were much like his mollifying comments when the first rumors of a DreamWorks exit surfaced, as reported here in August by Tim Swanson.)

Although Dauman has been a made man with Redstone since his days as a corporate lawyer when he almost singlehandedly rescued Redstone's acquisition of Viacom (he's held a board seat since 1987), he and fellow Redstone lieutenant Tom Dooley were pushed aside to make room for Mel Karmazin in 2000. Loyalty is not Redstone's ruling trait--witness the ouster of Tom Freston, who built him an MTV empire, with the supposed proximate cause being the failure to acquire MySpace. (Most observers believe Redstone himself dragged his feet to lose that deal). If Redstone wound Dauman up to sling an arrow at DreamWorks, it's still Dauman who will be blamed if diplomacy fails in the aftermath. Before he next describes their worth as "immaterial", he may want to review his comments in this year's second quarter Viacom Earnings conference call in early August:

As far as DreamWorks goes, we are very pleased with the relationship that we have with DreamWorks and we try not to pay much attention to what people in the press, particularly on the West Coast, like to have fun with.

Steven is happily engaged in directing our Indiana Jones picture and we are happy to have him as the leading star in our firmament and we are also happy that, thanks to this bridge, we now have a firmament.

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