Private Spielberg

The script wasn't supposed to end this way. On Oscar night the DreamWorks team of David Geffen, Jeffrey Katzenberg and Steven Spielberg was hoping--probably expecting--to hear Spielberg's film, Saving Private Ryan, named Best Picture. Certainly, the glittering assemblage at the Dorothy Chandler Pavilion was shocked. When Shakespeare in Love was announced, there was an audible gasp.

Which makes it a bit more awkward for DreamWorks to spin the news that Spielberg and his two top executives, the married couple of Walter Parkes and Laurie MacDonald, are balking at taking on the expanded film production that DreamWorks feels its live-action studio needs in order to thrive. DreamWorks, which released six films in 1998, wants at least to double that output. But Spielberg and his partners will restrict themselves to overseeing no more than half a dozen films a year. Spielberg also will revive his previously dormant production-company banner, Amblin, for some films. His financial stake in DreamWorks apparently remains unchanged.

While Spielberg's associates affirm that he is as devoted as ever to the ambitious effort to launch the first new studio in decades, most industry professionals will conclude that the famed filmmaker--by far DreamWorks' most valuable asset--is growing weary. The resurrection of the Amblin label, in their view, could signal that Spielberg is creating an escape vehicle in case the need arises. (The Amblin logo, which last appeared on Zorro, has until now been attached only to non-DreamWorks projects that were in the works before the new company was born.)

But Spielberg's colleagues say he simply doesn't want to run a full-fledged film division cranking out a dozen or more movies a year. "We've been fairly vocal in saying that there's only a certain extent to which we can change our stripes and become pure executives," Parkes says. "We're happier focusing on a smaller number of pictures."(Spielberg declines to comment.)

This change was planned before the Oscar disappointment, but certainly DreamWorks would have preferred to make the announcement while flush with triumph. Parkes, however, insists DreamWorks is triumphant enough after a strong year at the box office, with hits including Deep Impact and Saving Private Ryan. The company also scored nicely with Antz, its first animated film. And though Katzenberg did not have the giant smash he yearned for with Prince of Egypt, the picture will gross $100 million in the U.S.

DreamWorks principals say they need to increase production to compete with other studios, which typically release 15 to 20 films a year. They can either make more deals with outside producers or, more likely, hire a high-powered executive to run the live-action division alongside Spielberg's operation. An open question is how involved Katzenberg--who spent 10 years as head of the Disney studio but fared poorly in live action--will be in building the slate. Until now, the area had primarily been Spielberg's domain, while Katzenberg focused on animation and television.

There are reports inside and outside the company that the four-year-old DreamWorks is in the midst of a broader re-evaluation of its future and that bigger changes may be afoot. Many industry professionals have long assumed that eventually DreamWorks would combine with Universal--a studio that has been engulfed in management turmoil. The combination might make sense: DreamWorks' animation department could make a nice fit with Universal's theme-park operations.

Another rumor has Sony as a potential DreamWorks partner. Certainly Sony chief John Calley and Spielberg have bonded personally: Calley is advising the director as he mulls over buying a yacht. But Calley says no corporate conversations are under way.

Geffen says DreamWorks has many suitors, but he maintains that "no merger conversations are going on." For now, he says, the only issue is that "we need to ramp up production beyond six films a year." Most major studios have hundreds of scripts in development at any time, Geffen points out, but DreamWorks is so new that it doesn't have that kind of inventory. The company also lacks a movie-and-TV library that could throw off cash. And with so few releases a year, it's tough to build distribution muscle with theaters.

The broader question is whether DreamWorks is a dream that can work. The company has met with mixed results since its splashy launch. It has performed strongly in film, but most of its hits (including Impact and Private Ryan) have been joint ventures with other studios, which came up with the scripts. In television, DreamWorks has had some expensive failures (Ted Danson's Ink, for example) and only one solid hit: Spin City. In music, it has yet to strike gold. George Michael's DreamWorks debut was a disappointment. Newer acts on the label, such as Eels, Rufus Wainwright and Elliott Smith, have received strong reviews and, so far, have been non-starters on the Billboard charts. Geffen says financial success in music will follow the critics' cheers. "That's how you begin an artist's career," he says.