The Walt Disney Company (NYSE:DIS): Spielberg’s DreamWorks to Split from Disney

 Walt-DisneyAfter the box office smash Jurassic World, Steven Spielberg reasserted his dominance in Hollywood just before his studio ends its seven year relationship with The Walt Disney Company (NYSE:DIS). DreamWorks Studios has reportedly raised over $350 million to finance its own movies, although distribution may be handled by other partners.

The deal between DreamWorks and Disney will come to an end in August 2016, having turned sour almost from the beginning. In 2009, the original contract was reached with Dick Cook, who was chairman of Disney at the time. (Source: Fortune, September 2, 2015.)

Spielberg and his team believed they would have some involvement in ongoing Disney projects, a notion that was shattered soon after the deal. Cook was ousted and replaced by Bob Iger, the current head honcho at Disney.

Iger reformed Disney almost immediately. He insisted on Disney bearing the full financial responsibility for its movies before setting his eyes on new acquisitions. The company picked up Marvel Studios and Lucasfilm as part of a strategy to rebuild on existing brands.

Bob Iger Wrote Disney a Winning Ticket

With Marvel building its cinematic universe from its piles of source material, and the Pixar unit churning out a constant stream of hits, Disney’s profit soared through the roof. Their stock price tells that story plainly enough:

Walt Disney Chart

Chart courtesy of

But Iger isn’t one to let success stop at the theatre. Every successful franchise is paired with theme park rides and merchandising to maximize its revenue potential.

“We know how to leverage or mine value from [intellectual property] probably better than any media company out there,” said Iger in an interview. “And we have the ecosystem to do it, worldwide.” (Source: LA Times, June 6, 2015.)

However, the new acquisitions left less time and space for DreamWorks projects.

That’s why Speilberg’s adaption of Roald Dahl’s classic children’s book, The BFG, will likely be the final collaboration between the two studios.

Spielberg Goes Back to the Future

Spielberg will likely partner with Universal Studios, where he is also helping to revive two classic franchises. The success of Jurassic World inspired Universal to produce, believe it or not, a sequel that Universal plans to release in June 2018. They also want to reboot Jaws and Back to the Future.

Spielberg’s involvement is critical to the success of those films, and his offices are already located in the Universal buildings, making the partnership an ideal fit. However, his expertise doesn’t come cheap.

For Jurassic World, Spielberg demanded his personal director’s fee, which, unlike the upfront sum paid to most directors, includes a percentage of the profits. But here’s the kicker; he didn’t even direct the movie.

Colin Trevorrow was the man behind the blockbuster, and Spielberg paid him from the director’s fee. It may be that using Spielberg’s clout was a way of paying Trevorrow more than he would have got by himself, but it only goes to show how powerful he is.