Steven Speiberg’s production company, Dreamworks, has been hit with a major setback due to the world-wide financial crisis. Dreamworks is now being forced to come to terms with the idea of loosing their distribution deal with Universal as well as the majority of their planed features. The studio was expecting to be floated $500 million by India’s Reliance Big Entertainment who was putting their money up against $750 million from banks, with the ultimate aim of producing 36 films in 7 years. Though with the current inhibitions banks are having about giving out loans, its unlikely they will be able to secure the financing they need to function.
A lot of economic specifics comes into play here, that we honestly don’t really understand, but ultimately, Dreamworks has had its face slammed in the doors of the financiers and is surviving on bridge loans until January, when it is expected to fork over $20 million as collateral to secure more loans.
Dreamworks is now struggling with the fact that their goal for producing multiple massive budgeted productions is looking unlikely and they will now be forced into making smaller, more financial viable films or surrender their autonomy and revert back to a studio-backed company. Whatever their fate, it is probably a safe bet that Dreamsworks founders Steven Speilberg and Stacey Snider wish they wouldn’t have left their cushy positions with Paramount, where they were able to secure all the financing they needed, because now it appears Speilberg’s bloated, highly unnecessary movies are a phenomenon not fit for a recession.