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Communication problems were at the core of frustrations that MCA chairman Sidney J. Sheinberg was suffering under MCA's owner, the Japanese giant Matsushita. Spielberg had dispatched Wall Street dealmeister Herb Allen to tell the Matsushita bosses that if they held onto Sheinberg, they would have a big piece of the DreamWorks action. Matsushita has yet to respond.

The MCA-Matsushita deal had been brokered by Michael Ovitz, the Creative Artists Agency chief who, since the DreamWorks deal, is no longer routinely described in the press as the most powerful man in Hollywood. As Spielberg's agent, Ovitz had dreams of his own: to trailblaze into the new millennium of show business, digitally delivered over the lines of three powerful telcos with whom CAA had forged an alliance.

With the DreamWorks announcement, Spielberg showed he didn't need Ovitz to get on the fast track into the 21st century. Spielberg would be riding that bullet train with Katzenberg and Geffen, and the exclusion had to rankle Ovitz. Says Capshaw: "It was like going to the sandbox with your buddy, and suddenly a new person comes in to play with him. In business or politics or global affairs, you can usually reduce things to simple human relationships: envy, jealousy, feeling excluded. It's like Mike was saying, 'Why are you planning a party with so-and-so instead of me? I thought you were my best friend! I thought this is what we did together!' "

It took more than three meetings--not just a single schmoozy dinner--to resolve the differences. "There were strained feelings between Ovitz and the three of us that have recently been resolved," Spielberg says, hinting that there was an ultimatum delivered and that Ovitz knuckled under. "It was important I resolve it, because I needed to determine if Mike was going to continue to represent me as a director. I resolved my feelings about Mike, and I think he resolved his feelings about not being part of the DreamWorks inception."

Another formidable ally is Microsoft's Gates, whose tactical pitches include the hardball and the spitball. "Microsoft doesn't take no for an answer," Katzenberg says. "If they can't come in through the front door, they'll come in through the back door. Or the cellar or the attic. That's what they do. Well, so do we. So I respect that." Yet Gates' prodding of Katzenberg during a January meeting in Las Vegas nearly scuttled the software deal. As Spielberg recalls, "When Jeffrey said it took 400 animators to do The Lion King, Bill asked, 'Can't you cut that down to 40 people and do the rest on computers?' Jeffrey misunderstood Bill. He wasn't turning up his nose at creativity; he was putting us to the test, asking very tough questions because he wanted to hear how we would answer them. Bill was manipulating that meeting."

Many questions dog a DreamWorks-Microsoft alliance. "They think we have something to offer to the world they helped create," Spielberg says, "but I'm not sure they'll know that until we actually create something that makes a fortune for them. They're very good at reading the bottom line. But the ethers aren't so accessible to their world. In our world, we trust those ethers." Can the bean counters of Microsoft and the ether sniffers of DreamWorks speak the same language, even if it's English? Will Gates put up money as well as Microsoft manpower and stock? Most of all, who gets to control what?

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