Viacom C.E.O. Dauman Potshots Dreamworks

It all seemed so chummy at the Flags of Our Fathers premiere, with Steven Spielberg in his standard cap and jacket gear smilingly shaking hands with Sumner Redstone while Brad Grey kvelled. But Viacom C.E.O. Philippe Dauman's jab at the DreamWorks boys yesterday (during a conference staged by Goldman Sachs) sounded like a preemptive strike to warn Wall Street that the future of the $1.6-billion Paramount-DreamWorks fusion is not all that rosy.

Observers wondered about the symbolism back when the deal commenced and Spielberg elected not to move his production offices away from his ranch-style building on the Universal lot (I watched him cook up a very tasty lunch of matzo brei in the kitchen there while he was shooting Jurassic Park on a neighboring soundstage). One industry savant wondered out loud to me even before this eruption if, given the squirmy fit Universal Studios with the corporate bosses back east, Spielberg and master deal-maker David Geffen could revisit the surly negotiations held with NBC Universal while DreamWorks was in play. What if their bountiful recent track record means they could marshal the means to take over Uni and shed the east coast toaster-makers?. Wouldn't former Universal chairman Stacey Snider, who had moved over the DreamWorks as Spielberg's right hand, enjoy moving back to her old office on the Uni lot? Then everyone could desist on the rumors of a palace coup whereby she'd have Brad Grey's job as Paramount chief.

Yet the normally circumspect Dauman, whose opinions are loyally congruent with Redstone's, openly questioned the ability of DreamWorks to find another angel on the order of Microsoft co-founder Paul Allen, who'd put up the crucial stake for the original Dreamworks financing. If the domestic box-office tally of the respective arms of the combined studio--DreamWorks, $600-plus million, Paramount, about one-sixth of that--is bothering Dauman's ego, he wasn't admitting it:

[Dreamworks] has served as a bridge for us... from a point in time where we need to build up our pipeline to the future. What did we acquire with Dreamworks? We acquired their library, which we modified to dramatically reduce our purchase price. We only had about $600 million into the deal. We filled in holes in our organization. We built up our international organization...it brought us a slate of movies which represents the most successful year in DreamWorks history and happens to be under our ownership. And it brought us all the projects in development. And the sequel rights to all of the projects in the portfolio, including Transformers.

Steven and his team have the right to leave, if they choose, at the end of next year. At that point if there someone who steps in with a billion dollars, two billion dollars, stepping into the Paul Allen role of a decade ago, to start a movie studio from scratch, it's a possibility. And we are planning for that."

The financial impact to Paramount first and especially to Viacom overall, would be completely immaterial if someone, in the event, somebody turns up to help them start a studio from scratch.

Thus far, true to form, there's been no return fire from the DreamWorks side.