Since Reliance Entertainment stormed Hollywood with hundreds of millions of dollars in cash three years ago, the Indian media conglomerate has seen precious little for its investments, with no movies released as a result of development deals and DreamWorks thus far struggling at the box office.
Privately, senior Reliance executives are expressing disappointment with the state of their investment, and have stopped putting money into talent deals, TheWrap has learned.
Adding to the uncertainty: the longtime CAA agent who put Reliance in deals with many of its own clients, Emanuel Nunez (left), left the agency this summer.
Reliance has "been unhappy for a while now,” said a veteran Hollywood dealmaker with ties to India who spoke on condition of anonymity. “They’re terminating all those development deals that didn’t work out. They’ve put millions of dollars in, and nothing has gone anywhere. It’s money down the drain.”
Also read: DreamWorks, Reliance Finally Get Hitched
Meanwhile DreamWorks, the Indian company's single biggest Hollywood investment at $325 million, has struggled. The studio has had a tough year, barely breaking even on “Real Steel,” which recently surpassed $200 million worldwide, and losing about $30 million on “Cowboys and Aliens” (below right). The breakout hit “The Help” has been a lone bright spot in a year of box-office underperformers like “Fright Night.”
A spokesman for Reliance told TheWrap that the company is “happy with their current investments,” and still in the early stages of a long-term business plan.
Reached by phone in India, Reliance COO Mahesh Ramanathan, said he was not authorized to comment to TheWrap on the state of its investments in Hollywood.
But one individual with knowledge of DreamWorks’ funding deal said the studio is waiting for an infusion of Reliance money before greenlighting more movies. DreamWorks declined to comment for this article on the record, but a DreamWorks insider denied that this was the case.
Still, the studio's pipeline is hardly full.
In September the studio green-lit “Robopocalypse,” which it is co-financing with Fox, the insider noted. “Lincoln” is now in production and the studio expects to greenlight two more movies in the next three months.
The studio insider said that when DreamWorks received its initial round of funding, it put six projects into production almost all at once, causing an uneven schedule that will eventually be smoothed out. The Reliance partnership, the executive said, will continue.
But another dealmaker told TheWrap that Hollywood is wondering whether Reliance is beginning to sour on the industry after so many fruitless development deals.
“From what I’ve heard, they (Reliance) feel like it was a bit of a vanity process — which, to be fair, they got plenty of mileage out of,” he said.
In 2009 Reliance traded money for what it called “creative partnerships,” and suddenly found itself in business with the Hollywood A-list including: Brad Pitt’s Plan B Entertainment; Jim Carrey’s, JC 23 Entertainment; Jay Roach’s Everyman Pictures; Tom Hanks’s Playtone Productions; George Clooney’s Smoke House; Nicolas Cage’s Saturn Films; Julia Roberts’s Red Om Films; Chris Columbus’s 1492 Films; Brett Ratner’s Rat Entertainment; and Ron Howard and Brian Grazer’s Imagine Entertainment.
The funding deals gave the company Indian rights to any film it co-financed, and Reliance intended these to be “the first major building block in the creation of a virtual studio,” it said in 2009. But no movies have seen the light of the cineplex as a result of this funding.
Except for Columbus, who is repped by WME, each of those companies or their principals are CAA clients.
Nunez, CAA's lead dealmaker for Reliance, left the agency this past June after two decades, with no explanation given.
CAA declined to discuss Nunez’s exit, and an individual close to the agency told TheWrap that it was not related to Reliance. (Efforts by TheWrap to reach Nunez were unsuccessful). The individual added that the agency has never had an exclusive relationship with Reliance in Hollywood, and that CAA and the Indian company remain on good terms.
“It got them plenty of headlines around the world and the profile they now have — which is a very talent-friendly profile,” the dealmaker said.
A spokesman for Roach said the director never used any of the money that Reliance made available to him.
Director-producer Brett Ratner told TheWrap that his deal remains in place, although it hasn’t resulted in any movies. “I’m developing projects that they finance,” he said. “I haven’t made any of the movies yet, or the scripts aren’t ready.”
Also read: Reliance Secures Majority Stake in IM Global
The current outcome is certainly not what Reliance had in mind when the company announced its investment in DreamWorks in 2009. At the time, Reliance CEO Anil Ambani (right) said his company’s partnership with DreamWorks “is the cornerstone of our Hollywood strategy as we grow our film interests across the globe.”
Aside from the DreamWorks investment, Reliance’s most active U.S. involvement is in IM Global, a foreign sales company run by Stuart Ford in which Reliance bought a majority stake in May 2010.
That investment let IM Global leapfrog into being one of the top sales agents in town along with a leading indie financier — and has been good for Reliance.
"Reliance's impact on the independent space has been very significant," Ford told TheWrap, noting that his company has put a half-dozen movies into production with Reliance backing, relying on foreign pre-sales and tax incentives. "They haven't put a foot wrong."
And at least one project from one of Reliance’s development deals was sold by IM Global, “Jesus Henry Christ,” with Roberts’ Red Om.
This past May, Reliance showed that despite its unhappiness with the financial results it’s gotten out of Hollywood so far, it’s still willing to invest.
Reliance bought a piece of former Universal co-chair David Linde’s (left) production and financing company.
Reliance is one of the largest media companies in India with holdings in movies, music, sports, gaming and the internet. It also has interests in communications, financial services, power generation, transmission and distribution, natural resources, infrastructure and health care.
The individual familiar with the company said he didn’t think Reliance would pull out of Hollywood. “They’re in pretty deep,” the insider said. “They have contractual commitments and ownership stakes.”