Spielberg and Reliance pony up to Paramount for DreamWorks projects

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Steven Spielberg has informed Paramount Pictures that he and partner Reliance Big Entertainment of India will receive a big check tomorrow for 17 DreamWorks projects they need to jump-start their new independent studio, which is still in need of securing more than $1 billion in funding to become fully operational.

Paramount had set a Jan. 15 deadline for the payment. Tomorrow’s check is expected to total about $27 million, according to people familiar with the arrangement. Spielberg and Reliance will eventually have to pay an additional $6 million both to Paramount to cover overhead for producers and to screenwriters for additional drafts of their projects.

Paramount Vice Chairman Rob Moore said today that his studio had just received a letter from Spielberg’s attorney guaranteeing payment for the projects, which include ’39 Clues,’ ‘Chicago 7,’ ‘Motorcade’ and ‘Dinner With Schmucks,’ a comedy to star Steve Carell and to be directed by Jay Roach.

In the corporate divorce with Paramount, Spielberg negotiated the right to buy the DreamWorks projects in development that Paramount owned and retains the right to co-finance. There is a second group of DreamWorks projects that remain at Paramount in which Spielberg can be a producer but not an investor.

Spielberg’s efforts to raise a hoped-for $1.25 billion to fund his new studio with Reliance continue to be hampered by the global credit crisis. Reliance has committed to providing Spielberg and his DreamWorks chief, Stacey Snider, up to $550 million in equity for a half ownership stake in the studio, but not until the executives can secure at least that much in debt financing to meet their plan to make six movies a year. Lead bank JPMorgan Chase is looking to raise $325 million of $700 million to $750 million in total debt by the end of the first quarter.

Since leaving Paramount, Spielberg and Reliance have been supporting the overhead at the new company, which has 60 employees and a distribution deal in the wings with Universal Pictures

A DreamWorks spokesman confirmed that the check was being sent. ‘Making this investment clearly shows confidence that the deal is moving forward,’ he said.

-- Claudia Eller