Changes Afoot at DreamWorks--and Spielberg Will Help Oversee Them

DreamWorks is preparing to make some changes in its movie division to increase production. And Steven Spielberg will be around to oversee the changes.

There’s been rumbling in Hollywood for two years that Spielberg has had second thoughts about the studio he launched in 1994 with Jeffrey Katzenberg and David Geffen.

Those rumors heated up recently, particularly after Spielberg’s film “Saving Private Ryan” missed the Best Picture honor at the Academy Awards. Some said that the world’s most successful director-producer had tired of the responsibilities associated with managing a studio and just wanted to focus on those movies that interest him.

Spielberg has remained silent on the subject until now. A Time magazine article this month, suggesting that he planned to resurrect his company, Amblin Entertainment, as “an escape vehicle in case the need arises”--prompted him to respond.

“I love directing and producing movies. I always have, and I always will,” Spielberg said in a statement exclusive to The Times. “The very idea that responsible publications, like Time magazine, have rumored this fiction that I have grown weary of DreamWorks is false and damaging.”

He went on to say that the report “undermined the morale of a company that I helped form, love very much and continue to be unequivocally devoted to.”

Even Spielberg’s high-powered attorney, Bruce Ramer, who rarely speaks about his clients, said: “The Time article was fiction. It’s all nonsense. In the 30 years I’ve known him, I’ve never seen Steven happier.”

Geffen also disputed ongoing rumors that DreamWorks may merge its operations with Universal, which distributes its movies overseas and video worldwide, or any other entertainment concern.

“It’s simply not true,” Geffen said in an interview with The Times. “We’ve never had conversations with any studio in town--not one company--about merging, selling or buying--never.”

Although Spielberg may still be smarting from the Oscar outcome, his mood may have lifted Monday with the news that DreamWorks has finally bought 47 acres at Playa Vista to build its permanent headquarters. Prolonged feuding and a number of false starts over the long-planned development project had threatened to squash Spielberg’s dream of building and owning his own state-of-the-art studio.

In the nearer term, DreamWorks is planning to reorganize its movie division to ramp up its output of movies to feed its distribution operation and justify the overhead. Those plans prompted Time magazine reporter Kim Masters to write the recent article.

“Time stands behind its story, which was accurate in stating that Spielberg’s role at DreamWorks is going to be changed and that creates a certain perception in the community,” Masters said.

The DreamWorks partners maintain a different view.

Geffen insists that Spielberg’s role “is not changing,” though he acknowledges that DreamWorks needs to distribute more movies.

The partners are in the process of figuring out how to do that. Spielberg and DreamWorks production chiefs Walter Parkes and Laurie MacDonald--the troika responsible for the studio’s live-action program--can’t oversee more product than they already are, according to Geffen.

“They can’t make enough pictures,” Geffen said. “They can’t seem to do it, and we want to make more movies having nothing to do with Walter, Laurie and Steven.”

The major studios typically release about 20 movies annually; DreamWorks has never distributed more than half a dozen in any given year. The partners’ stated goal was to eventually distribute nine movies a year.

The problem, as DreamWorks insiders see it, is that projects are bottlenecked with Parkes and MacDonald, who are hands-on in the production of Spielberg’s movies and are therefore less available to work on other films.

Parkes, a writer-producer, recently spent two weeks in Malta on the set of “Gladiator”--a co-production with Universal--shaping up the script and dealing with production issues.

Spielberg is said to be frustrated knowing how desperately DreamWorks needs more movies and knowing he, Parkes and MacDonald can’t handle more than four to six films a year.

Although DreamWorks may revive Spielberg’s Amblin logo for the director-producer’s more family-oriented movies and for projects that predate DreamWorks, Geffen said that that should not be construed as an escape hatch for the filmmaker.

Geffen said DreamWorks is considering various options to supplement its annual release slate, including making more deals with self-contained production outfits such as the one run by director-producer Robert Zemeckis.

DreamWorks also would like to hire a high-level studio executive to facilitate more movies in addition to those Spielberg, Parkes and MacDonald are producing.

Geffen said installing another top movie executive “wouldn’t change anything, it would just add to what is already here.”

Geffen also disputed rumors that Katzenberg would become more involved in live-action films. He said Katzenberg’s main focus will continue to be animated movies, although his partner attends every live-action development meeting.

Questions also continue about the status of Bob Cooper, who has assumed a low profile at DreamWorks since being recruited by Katzenberg two years ago. The former HBO programming chief and short-lived president of TriStar Pictures has been overseeing “American Beauty,” starring Kevin Spacey and Annette Bening, due out this fall, and “Galaxy Quest,” with Tim Allen, scheduled for Christmas.

DreamWorks has two other movies scheduled for release this year: “The Love Letter,” starring Spielberg’s wife, actress Kate Capshaw, and “The Haunting,” a supernatural thriller directed by Jan De Bont.

DreamWorks’ box-office record this year is mixed: Its first release, “In Dreams,” tanked, and its current release, “Forces of Nature,” starring Ben Affleck and Sandra Bullock, has performed solidly to date with $46 million.

Geffen said that last year’s slate, which included the animated features “Antz” and “Prince of Egypt” and the company’s co-production hits “Deep Impact” and “Saving Private Ryan” plus “Small Soldiers” and “Paulie,” was “profitable and profitable beyond our overhead.”

He said profits for the two animated movies projected over a seven-year life span are $160 million; for the live action, $80 million.

DreamWorks’ overall revenue, including television and music, was just over $1 billion last year, according to Geffen, who declined to specify profit.

Wall Street analysts generally agree that 4 1/2 years into DreamWorks’ short life, the partners probably have written more checks than they’ve received.

One industry analyst observed: “On a checkbook basis, it would be highly unlikely they would have been profitable last year. On an accounting basis--using GAAP [generally accepted accounting principles]--we know all things are possible and if you capitalize enough costs and amortize them over a long enough period, you can create profitability.”

When anyone in the entertainment industry talks about profit, said the analyst, “you have to go get their dictionary, not yours.”