DreamWorks, Viacom deal still not dreamy

LOS ANGELES, Jan. 29 (UPI) -- Tensions among principals in the year-old Viacom acquisition of Los Angeles-based DreamWorks SKG's live-action studio remain evident, observers said.

David Geffen, Steven Spielberg and Jeffrey Katzenberg sold the studio for $1.6 billion to Viacom's Paramount Pictures.

A problem arose over who should receive credit for the musical "Dreamgirls," a Geffen project. DreamWorks produced the film, but Paramount co-financed it after Warner Bros. bowed out.

DreamWorks asked Paramount managers, including Chief Executive Brad Grey, that "there be no speeches before the movie at either the New York or Los Angeles premiere," the Los Angeles Times said.

Grey saluted the film and acknowledged Geffen's efforts, upsetting executives at DreamWorks, the Times said. Paramount said Grey's actions were appropriate as chairman of the studio that owns "Dreamgirls."

Viacom Chairman Sumner Redstone said the three had difficulties adjusting. Director Spielberg and music mogul Geffen signed four-year contracts with Paramount. Katzenberg, former chair of Walt Disney Studios, maintained his autonomy as head of DreamWorks Animation.

"I understand how people like them, entrepreneurs who built companies and are creative geniuses, want a hell of a lot of autonomy," Redstone said. "(We) are committed to giving them that."