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Then, at week's end--or, as Katzenberg might say, at the end of the week--Paul Allen agreed to kick in $500 million. Allen, co-founder of Microsoft, will receive a 20% equity stake in DreamWorks for the promise to put his money in the company and see no return for six years. To Allen, it seems a neat fit. "I'm awfully excited about this opportunity," the $4 billion man says of his biggest investment. "DreamWorks' capital structure and debt structure give it a lot of flexibility, help it weather adversity when there is adversity and capitalize success when there is success." Allen, who has a home movie theater and a personal recording studio, is unlikely to sign a talent contract with DreamWorks, but, he says, "I hope to bring my expertise in computer technology to help them in new ventures."
Katzenberg is glad to have the help. "In all the complicated ways to achieve our goal as a digital studio," he says, "Paul has been much smarter than any of us." On Friday night Spielberg and Katzenberg celebrated the Allen deal by taking their wives to the film Bye, Bye Love (directed by new DreamWorks TV employee Gary David Goldberg), then noshing at Dive!, the submarine-themed sandwich restaurant S and K own in Century City.
S, K and G have their own stake in the company: $33.3 million each. That's bus fare to Spielberg and Geffen but a big wad to working stiff Katzenberg, who has mortgaged all he owns to prove he's serious. "I have not just figuratively bet the ranch," he says. "I have literally bet the ranch. My entire net worth is riding on the success of this company." His partners have other reasons for hitching a ride on Jeffrey's dream boat. "Steven and I have tremendous amounts of money," Geffen says, almost shrugging. "You can't spend or even use most of it; it's just on some financial statement, and other people are playing with it. So I'm not in this because I need or want to make another billion; that would have no value. It's all in the doing, all in the journey."
DreamWorks has some bold ideas: to split equity with all employees, including secretaries, and to give shares of gross movie revenue to those chronically unsung artists, the writers and animators. The company also plans to distribute its films in the U.S.-Canada market, rather than handing that task (and a hefty slice of any profits) to one of the major studios. But the company will soon sign with a Hollywood-studio alliance to handle overseas distribution and worldwide video.
There will be a strategic alliance with computer firms (leaning toward Silicon Graphics and IBM) to provide digital systems and another alliance with a software manufacturer (almost certainly Microsoft) to develop games, educational tools, simulations and other PC fodder. "Right now the world of interactive media is pretty dry," says Spielberg, fingering diskettes on his desk next to a computer fitted with flight-simulator cockpit gear. "Whoever we partner with in that world, we're going to make the stuff real wet."