{mosimage}PARAMOUNT PICTURES CHIEF BRAD GREY was on the phone this week talking about his studio’s release of DreamWorks’ megablockbuster Transformers when, all of a sudden, helicopters swooped out of nowhere and drowned him out. “It’s Jeffrey and David,” he quipped to the caller, referring to DreamWorks partners Jeffrey Katzenberg and David Geffen, who, along with Steven Spielberg, sold their studio to Paramount 18 months ago. Yeah, that’s how lousy the relationship has been since the $1.6 bil deal went down. Since then, DreamWorks has been accusing Grey of trying to grab credit for its movie product because theirs are performing fab while Paramount’s films flop.


To date, much of the reporting about the two companies has focused on the messy integration and hurt feelings. But what about the product? I had to go back to 2001 to find the last time Paramount was sitting higher than third place in studio market share. Well, next week Paramount will be first. And the reason is the acquisition of DreamWorks.

No doubt about it: DW’s movies are making lotsa moola: Dreamgirls (which made most of its moola in 2007), Norbit (showing there’s nothing too stupid for Americans to watch), Blades of Glory (which everyone found a laugh riot), Disturbia (a tween/teen thriller with PG-13 appeal), and the tentpoles Shrek the Third and now Transformers. Notice I didn’t say these were good pics, just profitable ones. Nobody I know is predicting less than $125 mil for the six-and-a-half-day period starting 8 p.m. Monday through Sunday for this battle of the bots released in 4,011 theaters. Granted, Transformers plays like typical Michael Bay macho crap, all that stilted dialogue, plus a few slutty babes thrown in for eye candy. But Steven Spielberg meddled so it’s got maudlin “heart” as well as great special effects. (I hear ILM went all out to impress because its own George Lucas has teamed up with Spielberg for an Indiana Jones fourquel.) All these strong pics were in the works before the acquisition deal. By contrast, look at Paramount’s anemic product during that same time period: Zodiac (a leftover from the Sherry Lansing era that tanked), Shooter (shot itself in the foot), Next (unable to open better than fourth place). And then nothing until August.

Even if I factor in Paramount’s other brands, the cupboard is still bare. Charlotte’s Web from Nickelodeon squeezed out some box office, but MTV’s Freedom Writers was DOA as was Vantage’s Black Snake Moan and Year of the Dog. Even Vantage’s well-reviewed but downer of a drama, A Mighty Heart, with Angelina Jolie couldn’t get traction in this crowded summer of event movies.

“What would they have done for product if they hadn’t bought DreamWorks?” an insider asks rhetorically.

Answer: Brad would have been fucked. Now he’s Hollywood’s fuckin’ hero sitting on top of the heap. And everybody inside DreamWorks hates him for it. They see the one-time TV producer as a parvenu. Along the way, they’ve forgotten that they sold their company to his. Spielberg has even complained publicly that Paramount (i.e., Brad) was grabbing credit for DreamWorks movies (others had been bitching privately before that). Every day, a new rumor surfaces that Brad is getting dumped. Fortunately, his good relationship with Philippe Dauman, the No. 2 at parent company Viacom, saves Grey’s ass again and again.

“Philippe loves him. They have the same temperament,” a Paramount source explains to me. “But Brad’s biggest problem is not Viacom. It’s DreamWorks.”

I’M TOLD THAT, when the slightest thing goes wrong, the DreamWorks toppers complain straight to Katzenberg, who complains straight to Grey. And then, if it’s not handled quickly enough, very scary Geffen gets on the phone to Grey. “It’s brutal,” a source describes. It doesn’t help that many DreamWorks execs are now doing jobs as part of Paramount “and there’s an invisible tether back to DreamWorks,” an insider explains. The other day, DreamWorks’ Justin Falvey and Darryl Frank, the pair running TV production, were renegotiating their deal. Soon, Brad was hearing that Paramount wasn’t being generous enough. “DreamWorks is just a freight car, but they’re driving the whole damn Paramount train,” a source puts it. “You can’t ignore them, or they’ll grind everything to a fucking halt.”

After trying to boss DreamWorks behind the scenes for months and months, Grey finally gave up. Since April, Paramount has been issuing tortured clarifications to ensure DreamWorks gets its glory. Now Brad stays politic instead of constantly proclaiming he’s in charge. Because, in Hollywood, money trumps power each and every time.

“You have a lot of billionaires running around there,” says Grey, who isn’t one of them. “But, right now, everybody is getting along. We’re in a good place.”

In other words, DreamWorks now has Paramount completely cowed. That was the case too when Universal distributed DreamWorks product. Katzenberg, for instance, completely retooled Uni’s distribution system before doing the same for Paramount. And then there were the eight-page single-spaced laundry lists of demands DreamWorks would make of Universal president/COO Ron Meyer.

“Ronnie always said, ‘I miss them on my balance sheet. But I don’t miss the calls every day,’” Grey was heard ruminating the other day.

Oh, how the worm has turned. It was just 2005 when show-biz journalists were writing stories killing off DreamWorks and lashing out at SKG for its folly in starting a studio, chiding it for its inconsistent product (in terms of quantity and quality), pointing out DreamWorks movies that bombed at the box office (The Island, Just Like Heaven), and claiming it was profit challenged (DreamWorks reportedly was on the verge of bankruptcy a couple of times, including after it lost $125 million on Sinbad in 2003). As a result, I and others questioned the hefty price tag of the Paramount/DW deal at the time, even given the inclusion of Spielberg, the 60-odd-titles library and the right to distribute DreamWorks Animation toons. Well, that was then.

And now? It looks like a steal.

Grey does deserve some credit for recognizing two years ago there was trouble ahead for Paramount after taking over the studio at the start of 2005. He and his people hand stitched a slate together, but mostly they jettisoned product from Lansing’s management while also spending like drunken sailors on future projects. By the end of 2005, other studios were already programming for 2008. But Grey et al. were still focused on 2006. DreamWorks, meanwhile, needed to pay off its biggest investor, Microsoft co-founder Paul Allen. So, when the negotiations for GE/NBC Universal to buy DreamWorks started to go south, Grey pushed Viacom to let him make a play because there wasn’t enough product in his pipeline. “To be honest, that’s why we bought the company. That was really why it made sense,” Grey told me way back when.

Of course, it didn’t help that Grey’s No. 2, Gail Berman, wasn’t putting enough into development in the meantime. But DreamWorks’ Stacey Snider and Adam Goodman were. Remember that, by the end of the integration, DreamWorks’ production budget took a big slice out of Paramount’s. They became virtual equals, with each making eight to 10 pictures a year. Paramount claims the deal will be in the black ahead of schedule. (“Within 12 months,” according to Paramount sources; while others, citing the realities of first-dollar gross participants and myriad other factors, say that’s “nowhere near the truth.”)

Again, this Christmas season, DreamWorks will supply most of Paramount’s high-profile product, culminating with Sweeney Todd, directed by Tim Burton and starring Johnny Depp. Not until next summer’s Indiana Jones and Star Trek sequels does Paramount put out a complete slate. Until then, Grey will still be drowned out by his billionaire colleagues.

For more Nikki Finke check out Deadline Hollywood Daily at www.deadlinehollywooddaily.com

Email at deadlinehollywood@gmail.com

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