Spielberg raises $1.3b to take back DreamWorks

Backed by an Indian billionaire and JPMorgan Chase, Steven Spielberg will sever DreamWorks from Paramount Pictures. (Lucasfilm)

LOS ANGELES - Steven Spielberg raised $1.3 billion to reestablish DreamWorks SKG as an independent film studio and break away from Viacom Inc.'s Paramount Pictures, people familiar with the director's efforts said.

The new studio is backed with a $550 million equity investment by Indian billionaire Anil Ambani and $750 million in debt financing lined up by JPMorgan Chase & Co., according to two people familiar with the arrangements.

The investment by Ambani's Reliance Entertainment Pvt. allows Spielberg, 61, to leave Viacom, where he clashed with Paramount studio chief Brad Grey. Paramount said it will let Spielberg and DreamWorks chief Stacey Snider join the new company immediately. The two sides will have to negotiate the projects Spielberg can take, said Bill Mechanic, former head of News Corp.'s Fox studios, said.

"If they leave behind all their projects, starting up will be a harder process," said Mechanic, who now heads Beverly Hills-based Pandemonium Productions. "Your success in this business is determined by the quality of projects you have in development."

With the release from Paramount, the new DreamWorks may be up and running as early as January. The studio will make about six films a year, according to the people familiar with the plans.

A DreamWorks spokesman declined to comment, as did Amit Khanna, chairman of Reliance Entertainment. The people declined to be identified because the terms aren't public. The Wall Street Journal reported the accord earlier.

DreamWorks founders Spielberg, Jeffrey Katzenberg, and David Geffen sold the studio to Viacom for $1.6 billion in 2006.