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December 11, 2007
Loud Mary
Radar's gossip blog ran this stupid piece in the great tradition of Nikki Finke... clearly one source... clearly with an agenda... clearly will get people talking before they find a more significant distraction, like the weather.
No one is firing Steven Spielberg. The idea that Spielberg is going and Geffen is staying is, simply, not gonna happen... certainly never at anyone's behest but their own.
That said, here is what might have actually been floated - Spielberg, Geffen, and Katzenberg are on 3 year contracts which end next year. What is not 100% clear - opinions differ - is whether they can leave Paramount with Stacey Snider before 2010 and how easily they can leave with the DreamWorks name.
Sumner could absolutely try to position the debacle of the exit of SKG after 3 years and as 90% of the flailing studio's revenue creation - the only way it won't happen is if SKG bought the studio from Viacom outright, though it is more likely that Spielberg would prefer a red carpet housekeeping/co-funding deal at Universal - just as he spun the exit of Tom Cruise as a firing. But this time, he's f-ing with the wrong guys. Cruise was vulnerable when that went down. David Geffen will have Redstone's Viagra replaced with cyanide while he sleeps.
Yes, there could be a fight over the studio name. Yes, Paramount has a longer deal to distribute DreamWorks Animation than for the people who make it, which complicates things. Most complex is pulling out all the top shelf DreamWorks talent that is now employed directly by Paramount. This can, as Tina Turner might say, could go down rough... or easy.
But the idea that Sumner is going to "fire" Steven is the kind of PR spin that will push Viacom B into some trouble. Phillipe Dauman already has a major problem coming in the exit of SKG and they still have no answer to offer the Wall Street community. Brad Grey is likely to go down in history as the Jerry Levin of the movie business, his moves, including bringing in DreamWorks at a massive cost, forcing Viacom to divest itself of its movie studio and at least some cable nets. Trading publicty jabs with Geffen is not going to work for them... as we all thought they already learned from the last publicity debacle.
Really, how will they explain that over 80% of their distribution gross is walking out the door?
There are more charitable ways of parsing the numbers. DreamWorks Animation is really not part of the equation, for either company. It is, technically, an independent company and Paramount only has a distribution deal with them, for which it paid an additional $75 million when the big deal happened. They are in profit on that deal after this year and can expect net revenues of about $40 million a year in future.
On just live action, DreamWorks product grossed $454 million so far this year with Paramount product making $263 million. So DreamWorks live action is only responsible for 63% of their gross domestic revenue.
Still not a great story... especially when only one film from Paramount proper cracked $50 million all year.
The truth is, SKG would be doing Redstone a favor by taking Viacom B off of his hands. If they won’t, the only question is whether Wall Street will be less kind to a company that keeps Brad Grey in charge of a sinking ship or one that dumps him. And if they dump him and lose SKG as well, who takes over? Joe Roth? Bill Mechanic? I don’t see Peter Rice being willing. Who the hell else is there, who could step up not into the production role, but the big boss role?
Without a hero, the stock will plummet and Redstone will push the eject button by 2010... assuming that it is still up to him by that point.
But nice try...
Posted by poland at December 11, 2007 10:39 AM
Comments
You don't fire Speilberg.
Posted by: doug r ![[TypeKey Profile Page]](http://www.mcnblogs.com/thehotblog/nav-commenters.gif)
at December 11, 2007 06:51 PM
Glad to see the Wall Street view on the blog, DP. That is what I do for a living as you know with a specialty in media.
You know more about Paramount and Dreamworks than I but an implosion of the studio will have little impact on Viacom's stock price. All fo the value Wall Street accords Viacom shares comes form the cable network business. Paramount was worth nothing in 2006 and only Transformers has given it value this year. But the Street isn't paying for an occasional hit movie when the company has shown little ability to produce hits and no ability to leverage those hits in DVDs, merchandising, etc. Yes, Transformers DVDs sold well and it may turn into a franchise but Paramount is tangential to Viacom from Wall Street's perspective. In fact, if Paramount were sold, I'd bet that Vaicom shares would initially move up.
Posted by: Direwolf at December 12, 2007 05:25 AM
If Spielberg gets fired he can crash on my couch until he gets back on his feet. But he needs to look after the litter box when he's not out looking for a job.
Stephen - call me.
Posted by: a1amoeba at December 12, 2007 04:13 PM
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