Hollywood's Double Whammy: SAG's Big Election and DreamWorks' New Deal

So what could the anti-MF ranks do after they take office on September 23? Get rid of national executive director and chief negiotiator Doug Allen, who if anything is overqualified to run SAG’s bargaining with the Big Media moguls after years of leading the NFL players against the even bigger, even badder team owners. Firing him would be beyond stupid and only benefit the Hollywood employers’ divide-and-conquer strategy.

I just hope MF and U4S can unite about trying to get a new, richer contract. Because SAG has to start speaking with one voice again. Otherwise, it will be forgotten that, on September 17, the balance of power vis-a-vis employer-labor shifted. Suddenly SAG found itself with tremendous contract leverage, and Big Media, not so much.

A post-card poll of SAG members showed 87.27 percent support for its negotiating team continuing to bargain for a better contract with the the CEOs and refusing to accept the last June 30 offer. This now becomes a huge problem for the studios and networks, whose labor lawyers making up the Association of Motion Picture and Television Producers have been arguing for months that SAG’s leaders pressing for richer New Media terms were acting against the wishes of the membership. Now it’s clear that AMPTP was only deluding itself that there was some groundswell of SAG actors who would approve the lower-cost AFTRA-like version of the contract currently on the negotiating table — if only it were offered to them. So SAG called the employers’ bluff and post-card-polled its members.

Immediately, AMPTP complained about the way the poll was conducted and criticized the results as a “fraud.” Talk about sour grapes. Because the 10 percent response rate via post cards sent to all eligible SAG members is objectively considered large for that kind of sampling (and only 15 to 25 percent of the membership vote in the elections themselves). Basically, the employers were hoisted by their own petard.

Look, AMPTP’s divide-and-conquer strategy almost worked. It did manage for months to take the biggest, strongest and (to the employers) scariest Hollywood guild and almost reduce this proud pedigree to a cowering cur. But that was then, and this is now.

This is a wake-up call for the intransigent but disengaged moguls to either send AMPTP formally back to the bargaining table with a more conciliatory attitude (because the talks between both sides have never stopped, and I have proof ... ), or to take over the negotiations themselves like they did to end the writers strike.

“If they don’t realize that, then they really do have their heads in the sand,” one SAG leader told me this afternoon. “We wanted to use this tool to make sure the CEOs get re-engaged, roll up their sleeves and work with us to get the heavy lifting done.”

DreamWorks Divorces and Remarries in a Day

I was the first to report that the long-hyped DreamWorks-Reliance deal was already done, save for some issues surrounding the debt financing, which had to be wrapped up. On September 19, the papers were faxed and signed. (“The world is in financial collapse, and we just got $1.2 billion,” one insider exulted.) Immediately after, DreamWorks informed its owner, Paramount, that it now was in partnership with the big Indian entertainment giant Reliance Anil Dhirubhai Ambani Group, owned by one of the world’s richest men, 49-year-old Anil Ambani. Then Paramount shocked DreamWorks by giving it the bum’s rush and waiving certain provisions from the original deal to clear the way for the studio started by Steven Spielberg, David Geffen and Jeffrey Katzenberg to leave “without delay.” I’m told that Geffen didn’t even have a chance to resign from Paramount: Instead, he found out he is free to leave along with Spielberg, DreamWorks Studios co-chairman and CEO Stacey Snider, 150 other DreamWorks employees and producers Ben Stiller, Walter Parkes and Laurie MacDonald, Ivan Reitman and Tom Pollock, Nina Jacobson and Sam Mendes.

Thus ends one of Hollywood’s most dysfunctional and therefore entertaining relationships — one that soured almost from the first day of the sale of DreamWorks to Paramount in 2006. I can sum it up like this: Buyer Paramount turned out to be a bully; buyee DreamWorks refused to be anybody’s bitch (but were also pains in the asses themselves).

Now the two studios may bicker over the 200 active projects they have together. (But ill will was mitigated when Paramount’s parent company, Viacom, offered Spielberg and Peter Jackson 100 percent financing for the duo’s family movie Tintin trilogy, as I reported exclusively.)

Neither Geffen nor Katzenberg will be part of the reconstituted DreamWorks. Geffen has always said he planned to retire from the movie biz. And Katzenberg has been running the separate public company DreamWorks Animation, whose slate is still distributed by Paramount. So the new company will be the old DreamWorks in name only. Hollywood’s biggest and richest indie, it will be run with complete autonomy by Spielberg and Stacey Snider in 50/50 partnership with India’s $50 billion entertainment conglomerate, which financed the $1.2 billion film company. (Though the official press release calls it a $1.5B deal.) Mumbai-based Reliance ADA Group will invest $500 million equity and provide another $700 million revolving-credit facility through J.P. Morgan Chase toward the new venture, which will produce a slate of about six films a year. So now Geffen has engineered his most fervent wish: to give Spielberg and Snider enough independent financing so they could say “fuck you” to Paramount.