New York: Reliance Entertainment, a unit of the Anil Ambani-led ADA Group, is expected to give USD 200 million to Hollywood director Steven Spielberg’s DreamWorks Studios, a deal which will extend a new financial lease of life to the struggling California-based film company.
Reliance Entertainment has “agreed in principle” to continue financing the film studio Spielberg founded. Under the arrangement, DreamWorks would make fewer movies in a year, down to about three from the six it had originally intended, reported the New York Times. The report said DreamWorks executives and representatives had been seeking since earlier this year to augment an initial round of financing under which Reliance contributed USD 325 million in equity, while banks led by J P Morgan Securities provided a matching amount in loans.
Amid financial woes, mainly due to poor performance by some of its movies, operations at DreamWorks have slowed down. The financial assistance by Reliance will help the studio pick up pace in moviemaking, helping it continue to make studio-level pictures.
While Reliance has firmly committed to the new funding, J P Morgan and other lenders remain in place and may eventually be asked to extend or revise their own arrangements, the report quoted people briefed on the deal as saying.
Hollywood has been going through a rough patch in the past year or so. Moviegoing hit a 16-year low last year and DVD sales continue to remain unimpressive. While Academy award nominee The Help was a hit, movies like Fright Night, Real Steel and Spielberg’s own War Horse either lost money or did not make much. (PTI)
