DreamWorks, in its new form with co-chairs Steven Spielberg and Stacey Snider, is having a tough time raising the money to cover their half of the deal with India’s Reliance Big Entertainment, according to Variety.
Reliance will ideally put up $500 million against $750 million that DreamWorks would raise. But credit issues as they are have put a slight crimp in their plans.
DreamWorks has only been able to raise $75 million so far through bridge loan from JPMorgan Bank. Other banks are balking.
Meanwhile, DreamWorks is on the hook right away for $20 million to acquire the 17 projects they were making at Paramount. And they’ve already been notified that Reliance is only providing as much as DreamWorks can raise. So it’s kind of like fish or cut bait time.
Inside DreamWorks sources were tight-lipped as well, though one executive told FBLA that DreamWorks relationship to Reliance is solid and not going away.
At this point, no one is quite sure how this will play out. The credit crunch has scared most of the major banks out of the water and DreamWorks is struggling for its deal to stay afloat.
Variety is chiding DreamWorks for foresaking its Paramount deal. But that may be misplaced spite as DreamWorks is happy to be free and clear to set up its production process to the highest bidder. Presumably, Universal was coming back into the DreamWorks fold, but that’s in question now too.
The Reliance money came in handy to the studio, perhaps even moreso with the worldwide credit crunch spurred by Wall Street.