India's Reliance Anil Dhirubhai Ambani Group and celebrated filmmaker Steven Spielberg are setting up a new studio in Los Angeles under a $1.5-billion project that will make films for global audiences, sources familiar with the negotiations said Saturday.
The mega deal - which will help Spielberg break away from DreamWorks, now owned by Viacom's Paramount Pictures - will be funded by a mix of equity and debt, and also involve leading investment banker JP Morgan Chase, the sources added.
"The venture will reflect the new reality in today's world of cinema where box office collections for Hollywood movies are much larger outside, than in the US," said one source involved in the negotiations.
"This strategic pact is being keenly watched as it involves the coming together of an Indian company that has its own grand plans in the media and entertainment space, and one of the most decorated filmmakers in the world," the source added.
"This project goes beyond mere financials and gives the Indian group the rights across various platforms - theatres, home video, DVD."
The Mumbai-based industrial house remained tight-lipped. "At the moment, we have no comments to make over this issue," a spokesperson for the group told IANS from their headquarters.
Apart from Spielberg, winner of three Academy awards who has to his credit films like "Schindler's List", "Star Wars", "ET, The Extra Terrestrial" and "Jurassic Park", the new venture also ropes in his long-standing associate Stacey Snider, who was the chairperson of Universal Studios till 2006,
Snider, who had since been the chief executive of DreamWorks, has been involved in some acclaimed productions like "Erin Brockovich", "The Fast and the Furious", "The Mummy", "A Beautiful Mind", "American Pie" and "Brokebeck Mountain".
As a combination, Spielberg and Snider are regarded as the most successful filmmaking duo in history.
DreamWorks was formed with much fanfare in 1994. But after an uneven run, it was sold to Viacom'a Paramount in 2006 for $1.6 billion. Since then, Spielberg and his team were eager to part ways with Paramount.
According to sources, the Anil Ambani group and Spielberg decided to join hands both for the financial stability of their new venture and convergence of their ideas for the world of media and entertainment.
Ambani's Reliance Big Entertainment had announced in Cannes in May that it would make a major foray into Hollywood and develop projects in partnership with some best-known actors like Brad Pitt, Tom Hanks, Nicolas Cage, Jim Carrey and George Clooney.
This marked the biggest foray of an Indian entity in Hollywood's motion picture industry. Thirty films are likely to emanate from Reliance's co-financing and 10 will go into production soon, company officials had said.
The entertainment business of the Anil Ambani group has interests in movies, FM radio, music, sports, gaming, Internet and mobile portals, direct-to-home TV, Internet TV and Mobile TV.
The group, which also has a major presence in mobile telecom, financial services and energy sectors, had acquired in 2005 Adlabs Films Ltd, one of India's the largest entertainment companies with interests in film processing, production, exhibition and digital cinema.
The group recently acquired 250 screens in US and 51 screens in Malaysia.
Paramount, meanwhile, said it will not delay matters for Spielberg and his team, including DreamWorks partner David Geffen and chief executive Snider, in forging the pact with the Indian group.
"To facilitate a timely and smooth transition, Paramount has waived certain provisions from the original deal to clear the way for the DreamWorks principals and their employees to join their new company without delay," the studio said.
"Steven is one of the world's great storytellers and a legend in the motion picture business. It has been an honour working closely with him and the DreamWorks team over the last three years," the studio added.
"We expect to continue our successful collaboration with Steven in the future," said the studio, while congratulating him and DreamWorks partner David Geffen and chief executive Stacey Snider in finalisng the pact with the Indian group.