Trades' view of Ambani-Spielberg / Reliance-Dreamworks

The trades follow the scoop by WSJ that there are serious discussions underway for Anil Ambani's Reliance BIG Entertainment financing Steven Spileberg's break-away of Dreamworks from Paramount. THR.com notes:

Indian business group Reliance is considering a plan to invest $550 million in return for a 50% stake in a new version of DreamWorks, which Steven Spielberg would create after exiting his deal with Paramount.

The Mumbai-based conglomerate was approached as a potential DreamWorks investor by CAA and likely will take at least two more weeks to mull the proposition. Hired by DreamWorks chairman David Geffen, entertainment attorney Skip Brittenham has created a detailed business plan that would give Reliance a key role in the new DreamWorks but grant Spielberg extensive creative control of the reinvented studio.

Details including $500 million or so in accompanying bank debt could take the rest of the summer to sort out, and even the issue of ownership control remains fuzzy. Spielberg has been on the hunt for equity and other financing for several weeks or more. The interest from Reliance was first reported on the Wall Street Journal's Web site.

It is no small irony that the same issue of THR has an article called 'Global media gains will be built by BRIC', which observes that 'Growth in the roaring economies of Brazil, Russia, India and China -- the so-called BRIC nations -- will outpace the more mature markets of the U.S. and Western Europe, with PwC forecasting 13.6% average annual growth in BRIC compared with just 4.8% annual growth in the U.S. media industry and 5.4% in Western Europe.' It is just that the PWC report had not anticipated one of the Indian growth engines to set up a virtual studio in Hollywood.

Meanwhile Variety goes into more detail about the implications of this possible deal:

The emergence of Reliance as DreamWorks' principal new financier marks the latest and most dramatic example of talent -- and their agents -- aligning with outsiders and using other people's money.

Beyond emerging as DreamWorks' principal new financier, the Indian company closed development deals with seven Hollywood heavyweights.

At Cannes last month, Reliance trumpeted deals with seven production companies headed by high-profile thesps (Daily Variety, May 19) and this week pacted to pay each company at least $1.2 million-$2 million to develop projects.

More than one option

• (Co) Daily Variety
  Filmography, Year, Role
• (Co) Daily Variety

And

Reliance's deals with Cage, Carrey, Clooney, Columbus, Hanks, Pitt and Roach will potentially give that talent the opportunity to fashion a finished script that can be shopped to studios along with 50% of the film's financing. That will allow the talent to make the most favorable deal possible, because if a studio doesn't want to pay a star or director's usual gross deal, the package can be shopped to another studio.

While CAA is steering Reliance at a deliberately measured pace, the Indian conglom likely sees the arrangement as getting its foot in the door. Reliance may well finance the films itself and make a distribution deal with a studio.

A very exciting time to be working in India, that's for sure.

Is Anil Ambani the new backer of Spielberg?

Could Steven Spielberg and Dreamworks turn out to be the trump cards in the Ambani/Reliance/Adlabs ambition to expand in Hollywood? It would seem so, based on this report by Bloomberg and WSJ:

June 18 (Bloomberg) -- Steven Spielberg and Indian billionaire Anil Ambani are close to forming a venture that may help the movie director's DreamWorks SKG team exit from Viacom Inc.'s Paramount Pictures, the Wall Street Journal reported.

The Reliance Anil Dhirubhai Ambani Group will invest as much as $600 million in the studio, the Journal said, citing people familiar with the matter. The venture may borrow another $500 million to finance about six films a year, the Journal said. Reliance and Viacom declined to comment and spokesmen at DreamWorks were unavailable.

As of now it is still only a rumour, though an interesting one.

Reliance's Billion Dollar Entertainment Baby

The Cannes Film Festival is in full swing but I didn't make it this year. Instead it was my boss' boss who went there to announce Reliance Big Entertainment's Billion Dollar Plan.

While the company has previously been involved in film production and distribution, nothing could have prepared the world for the magnitude of this commitment to making films in India and beyond.

From the Economic Times:

CANNES: Reliance Big Entertainment, the media and entertainment arm of the $75 billion Reliance Anil Dhirubhai Ambani group, on Friday announced that it would spend $1 billion on the Indian film and entertainment business over the next 12-15 months.

This is by far the biggest commitment made by an Indian entertainment company for show business. Amid the glitter and glamour at the 61st edition of the Cannes Film Festival at the French Riviera, Reliance Big Entertainment also revealed that 69 films in nine languages would be ready for distribution over the next 18 months. Over a dozen films will be released this year.

"India is uniquely positioned in the global economic order. We believe this is the right time to make this commitment of $1 billion for the film entertainment business," said Amit Khanna, chairman of Reliance Entertainment.

The best coverage of the Cannes event itself comes from the Telegraph of Calcutta:

The Ambanis don’t do things in small ways — and today Anil Ambani chose Cannes to make public what the media had been promised would be information on a “major and unique event”.

The news conference had been organised by DDA, a PR firm which usually handles established American and European clients. In the last few days, its publicists have been calling up journalists to make sure they would be in the Salon Diane of the Majestic Hotel to hear the announcement at 10am today.

It was left to Amit Khanna, chairman of Anil Ambani’s Reliance Entertainment Pvt Ltd, henceforth renamed the Reliance Big Entertainment, to drop the bombshell — the group would invest $1 billion (around Rs 4,250 crore) to change the face of the Indian movie industry as we have known it.

And the ambition is not confined to India alone. My very diligent namesake Mr Frater does a good job of capturing it all in Variety's 'Reliance sets out its very Big ambitions':

The company is expected to follow Sunday with further announcement about relationships and production deals involving Hollywood talent such as Will Smith, Tom Hanks, Julia Roberts, George Clooney, Brad Pitt, Tom Cruise and Bruce Willis. “It is time for Indian companies to step up and take on the world,” Reliance CEO Amit Khanna said.

From THR.com 'Reliance goes Big with billion-dollar unit':

Reliance's empire spans production, distribution, home entertainment and exhibition across the subcontinent and also has outposts in Sri Lanka and Mauritius among others. Khanna said the company plans to open offices in New York and Los Angeles.

Even our own little digital cinema effort got a mention at Cannes and in Variety: 'Unlike other digital cinema initiatives in India, Reliance Big Entertainment and its stock-market listed Adlabs unit, are rolling out fully DCI-compliant 2k systems.'

Yup, that's us. But more on those plans another time. Maybe Cinema Expo.

George Soros pays $100m for slice of Adlabs and more

US-Hungarian billionaire George Soros has invested a cool $100m for a three per cent stake of Reliance Entertainment, the parent company of Adlabs, which is thereby valued at over $3bn. From Variety:

Deal values Reliance Entertainment at some $3.3 billion, making it the most valuable entertainment company in the fast-developing territory.

Reliance Entertainment controls the Adlabs group, which is India's biggest film processor, and in recent years has diversified to become a front-running movie production and theater operation.

Group has been a leading investor in the fast developing FM radio sector, has plunged into Internet services and is on course to become a direct-to-home satellite TV platform operator later this year. It operates Zapak, a gaming portal; Big Adda, a social network and social media venture; Big Flicks, an on- and off-line movie rentals business; and Jump Mobile, a mobile entertainment venture.

New coin is to be used to expand Reliance Entertainment's activities in all these sectors and it is likely to tap other financing, including a possible partial flotation.

This is yet another major vote of confidence by a foreign investor in the Indian entertainment sector and the latest in a number of deals that have previously seen the likes of NBC Universal spending $150m to buy a 24 per cent stake in New Delhi TV (NDTV), Disney buying a stake in UTV and Warner Bros partnering post facilities Prasad and Prime Focus.

Not much later the news was confirmed that Reliance Entertainment will indeed float, with today's IPO of elaince Power set to make Anil Ambani the richest Indian, with the Reliance Entertainment IPO likely to make him the world's richest man.