HOLLYWOOD'S "DREAM TEAM" SIGNS ON WITH CAP CITIES/ABC
Published November 29, 1994
The so-called "Dream Team" -- Jeffrey Katzenberg, Steven Spielberg and David Geffen -- formed a partnership with ABC/Cap Cities to produce prime-time and syndicated TV shows. CNN's Steve Young said the deal, reportedly $200M over seven years, "sheds more light on ABC than the trio." Smith Barney Media Analyst John Reidy: "The theory or rumor or myth that all the networks were going to acquire a movie studio is pretty much -- at least in the case of Capital Cities/ABC -- put to rest by this deal." CNN's Young noted the timing, with Paramount and Warner Brothers launching their own networks in '95 ("Moneyline," 11/28). ABC Television Network Group President David Westin said he hoped the new studio will eventually produce all of ABC's programming, while Cap Cities/ABC President Robert Iger said the net considers the deal its "big bet" (John Carmody, WASHINGTON POST, 11/29). The deal represents "a dramatic departure from the traditional financial relationship" between studios and networks. "The venture will be a 50/50 split between the two sides, both in financing and in reaping the profits from syndication sales and other sources" (Jane Hall, L.A. TIMES, 11/29). Wertheim Schroder & Co. analyst David Londoner: "It is the first time, to my knowledge, that a network has shared revenues with a production entity" (Geraldine Fabrikant, N.Y. TIMES, 11/29). The deal is seen as a "coup" for Iger, and "it goes a long way toward easing concerns about his longer-term vision for ABC's future" (W.S. JOURNAL, 11/29).