In a surprising turn of events that is stunning Hollywood, Universal Pictures says it has ended talks with DreamWorks on their pending distribution deal.

 

Last October, Steven Spielberg made the announcement of moving his DreamWorks movie studio, after three years at Viacom's Paramount, back to his longtime home, Universal. But now, he has changed his mind and left the place where he made such classics as “E.T. the Extra-Terrestrial,” “Jaws,” and “Jurassic Park,” switching to Walt Disney Studios.

 

Apparently, DreamWorks has had some hard financial times being unable to raise the $500 million investment it has from India's Reliance Big Entertainment, which is not quite a surprise after all, considering the fact that the credit markets are so tight at the moment.

 

Since Universal simply is not willing to help out in the financing department to fill that gap, Spielberg had to change course and chose Disney who makes about 12 movies a year now, so it has room in its distribution pipeline for those additional DreamWorks films, unlike Universal who could no longer afford Spielberg’s six additional movies.

 

So in a way it makes sense the director’s longstanding relationship with Universal comes to an end.

 

Should DreamWorks move to Disney, Disney gets the additional content, a more adult-themed one which balances their family-friendly fare. Furthermore, Disney particularly needs the kind of track record that Spielberg’s films have since a dramatic drop was reported in the movie industry. On the other hand, DreamWorks gets access to Disney's global marketing and distribution machine, not to mention the money it needs.