Transformers, Spielberg Leaving Paramount?

The rumors continue to mount that Steven Spielberg and his DreamWorks partners plan to jump ship and start a new independent studio (like DreamWorks use to be) with the help of Indian conglomerate Reliance. If a deal is signed, the goal is to make 30 films over five years.

Currently a distribution deal exists with Paramount through the end of the year but after that Spielberg and company (David Geffen, Stacey Snider, etc) can leave and take the "DreamWorks" name with them. He can then form the new company with the existing name or start a whole new brand. It is expected that a deal will be made by the end of the summer.

What impact will this have on Transformers: Revenge of the Fallen coming out next year? At most, the impact you will see will be what title card might show up at the beginning of the film and no anything else. Paramount shared the cost of Transformers 1 with DreamWorks, more then likely they are doing the same with Transformers 2. Between that ownership stake and the Spielberg leaving rumors over the last couple of years, there are probably contracts in place that protect Paramount. Besides, budgets have been allotted, plans have been made and to de-rail them now would not financially be worth it for anyone. Since Michael Bay probably has Final Cut stipulation in his contract, studio interference is a non-issue anyway since he can take or ignore their wishes as he sees fit.

As for future sequels, its all comes down to who owns the movie rights to the films. Are they owned by Hasbro and lent to DreamWorks/Paramount or are the rights completely or partially owned by one of the movie studios since Transformers was a co-production between DreamWorks and Paramount. It’s even possible that while Spielberg will be able to take the DreamWorks name with him, he will not able to take some of his toys with him such as DreamWorks existing library and current deals (which might include Transformers). If that is the case then Paramount would essentially become sole owner of the franchise, with the control that brings since the protection of Spielberg as executive producer would likely end. Don't under estimate how much studio interference the involvement of Spielberg and Bay in the franchise probably prevented (for good or bad depends on your point of view).

It is also possible that ownership would transfer to the new studio. I am not sure if that is a good thing or not as the cost of a third Transformers film would be beyond the budget of a fledging studio (even with Spielberg at the helm) resulting in a need to share the costs. Other then likely delaying the work on a third film by a few years, the result of that relationship could be a boom or a bust depending on the people (and money) involved.

The absolute worse case scenario is lawsuits where movie rights ownership has to get decided in a court of law. That could bog down the franchise for years. Hopefully whatever Spielberg decides the contracts involving Transformers protects its future. Thanks to Chris for the link.