dreamparlogo1.jpgTo date, much of the reporting (including mine) about the Paramount/DreamWorks deal that wasn’t pro forma has focused on the messy integration and hurt feelings. But what about the product? Granted it’s still early in 2007, but I had to go back all the way to 2001 to find the last time Paramount was sitting in 3rd place in terms of studio market share. And the reason, simply put, is the acquisition of DreamWorks. No doubt about it: DW’s movies are performing. Dreamgirls (which made most of its moolah in 2007), Norbit (showing there’s nothing too stupid for Americans to watch). dreamtopara.jpgBlades of Glory (which everyone finds a laugh-riot), now Disturbia (No. 1 last weekend and could be No. 1 again this time out), and the upcoming blockbusters Shrek The Third (May) and Transformers (July). All were in the works before the P/DW deal. By contrast, look at Paramount’s product during that same time period: Zodiac (a leftover from the Sherry Lansing era that tanked), Shooter (shot itself in the foot), Next (April 27th)… And then nothing until August. Even if I factor in other Paramount brands, the cupboard is still bare. (Charlotte’s Web from Nickelodeon squeezed out some box office, but MTV’s Freedom Writers was DOA as well as Vantage’s Black Snake Moan and Year Of The Dog. And no way counter-programming like Vantage’s A Mighty Heart or Son Of Rambow can get traction this summer.) “What would they have done for product if they hadn’t bought Dreamworks?” an insider asks.

I and others questioned the hefty $1.6 billion price-tag of the Paramount/DW deal, even given the inclusion of Steven Spielberg, the 60-odd titles library and the right to distribute DreamWorks Animation toons. But now it looks like a veritable steal. I’m told the deal will be in the black ahead of schedule (“within 12 months”, according to Paramount sources; “nowhere near the truth”, say others, citing the realities of first dollar gross participants and a myriad other factors). Paramount Pictures’ marketing czar Gerry Rich gets high marks all around for promo-ing DW’s product. bradgrey2.jpgBut also studio topper Brad Grey two years ago saw trouble ahead right after taking over at the start of 2005. He and his people handstitched a slate together but mostly they jettisoned product from Lansing’s management while also spending like drunken sailors on future projects. By the end of 2005, other studios were already programming for 2008. But Grey et al were still focused on 2006. SKG, meanwhile, needed to solve their Paul Allen problem. So, when the GE/DreamWorks sale started to go south, Grey pushed Viacom to let him make a play for SKG’s company because there wasn’t enough product in his pipeline. “To be honest, that’s why we bought the company. That was really why it made sense,” a source tells me. Of course, it didn’t help that Grey’s No. 2 Gail Berman wasn’t putting enough into development in the meantime. But DreamWorks’ Stacey Snider and Adam Goodman were. Remember that, by the end of the integration, DreamWorks’ production budget took a big slice out of Paramount’s. They became virtual equals, with each making 8 to 10 pictures a year. But then Spielberg decided to complain publicly that Paramount was grabbing credit for DreamWorks movies. Since then, Paramount has been issuing tortured clarifications to Hollywood reporters to ensure DW gets its glory. In other words, DreamWorks now has Paramount completely cowed. Again, this Christmas movie season, DreamWorks will supply most of Paramount’s high-profile product, culminating with Sweeney Todd.

skg_timemag_375.jpgI mention all this because, well, I find it interesting. Oh, how the worm has turned. It was just in 2005 that showbiz journalists were writing stories killing off DreamWorks and lashing out at SKG for their folly of starting a studio, chiding them for their inconsistent product (in terms of quantity and quality), pointing out their movies that bombed at the box office (The Island, Just Like Heaven), and claiming they were profit challenged (DreamWorks reportedly was on the verge of bankruptcy a couple of times, including after it lost $125 million on Sinbad in 2003). Well, that was then. And now? Dreamworks is literally keeping Paramount afloat before the studio gets its land legs back and puts out a complete slate in 2008.

UPDATE: Here’s Variety‘s, uh, later blow job version of my take on this.