Steven Spielberg and Paramount Talks Continue

Paramount execs believe they still have a shot at keeping Team Spielberg at Paramount.

Top insiders on the Melrose lot say they don’t expect Steven Spielberg to decide whether to terminate his deal with Paramount until sometime in the summer, but a window opens May 1 on his ability to bargain with other studios about taking his services elsewhere. Talk around town already is heating up over ramifications of a prospective Spielberg departure.

Paramount executives insist they will retain all rights to dozens of DreamWorks development titles even if Spielberg bolts, though others suggest that Spielberg could make it difficult to see key projects to completion. Similarly, the DreamWorks library is not in immediate jeopardy, but that’s only via a long-term licensing agreement after Paramount sold off actual ownership of the catalog assets to an investment group in March 2006, three months after acquiring them in the $1.6 billion acquisition of DreamWorks.

Meanwhile, DreamWorks chief Stacey Snider would be free to bolt Paramount in the event of a Spielberg exit under a “key man” provision in her contract; likewise DreamWorks chairman David Geffen, who could be key to any effort by Spielberg to create a DreamWorks II elsewhere. About 100 other DreamWorks employees working at Par would not be affected by such executive departures, but they no longer would be called DreamWorks employees.

Paramount didn’t acquire the DreamWorks name in its pricey December 2005 acquisition of the then 11-year-old studio. DreamWorks Animation — which wasn’t a part of the deal and remains a separate, publicly traded company — owns the DreamWorks name; its name-licensing agreement with Paramount would end the day Spielberg ends his stay there.

DWA’s distribution deals with Paramount for theatrical and home video releases runs through 2012. Only a change in the animation studio’s controlling interests would allow its early termination.

Insiders at all the companies with interests in the situation emphasize that Spielberg has yet to make his decision on whether to leave Par and suggest that he has yet even to focus in earnest on the matter. The filmmaker is involved in post-production on “Indiana Jones and the Kingdom of the Crystal Skull,” a Spielberg-helmed entry in Paramount’s storied action franchise set for release May 22.

As for his supposed unhappiness at Paramount, there’s also considerable consensus that while things might not have worked out as swimmingly as Spielberg hoped, much has been done to address his most serious misgivings.

His first six months with Paramount proved a rude awakening, confidants suggest. But issues of money and, well, respect have been dealt with sufficiently to characterize the current situation as not so much Spielberg feeling driven to leave the lot as simply his wanting to take stock of what might be on offer from others. He flirted with Universal and Warner Bros. before the marriage with Par.

Although regularly successful with such DreamWorks/Paramount film releases as “Transformers,” “Blades of Glory” and “Disturbia,” DreamWorks execs complained early on in their time at Paramount that the younger studio was being denied sufficient development funds or enough accolades for the projects they did get going.

At one point, Spielberg and company, unhappy with an annual production fund of $300 million, got Paramount to increase it to $400 million. Then there was the subsequent move that saw Paramount demand the press to acknowledge all DreamWorks-produced films as DreamWorks/Paramount releases.