"The deal for us has been highly profitable and is ahead of schedule," Paramount Pictures Chairman Brad Grey said in an interview Thursday. "It would always be better to have Steven and DreamWorks with us, but of course we'll be OK" if they leave. [...]

In a business as unpredictable as Hollywood, DreamWorks and Paramount could wind up having a rapprochement and drawing up new employment contracts.

Grey said he remains hopeful. "The temperature has to go down a little bit," he said. "If there's an economically prudent deal that makes sense for us, of course I want Steven and DreamWorks to be part of Viacom. No one respects Steven and David more than I do."

Should the proverbial cooler heads not prevail, look for Grey's Viacom masters to demand that their studio boss make a more dramatic display of how little a dumping by Spielberg will hurt them. Inviting all of his Paramount family to meet him for a "fun afternoon break" via an internal e-mail, hundreds of employees will join their leader around the Melrose lot's beautiful fountain, into which Grey will blithely toss each and every one of the two-hundred photographs of Spielberg that adorn his office's walls, telling his underlings, "See how much Steven means to me? Sploosh! Didn't feel a thing!" as each lovingly framed memento of their relationship sinks into its bubbling waters

• Fleeing a close encounter with Viacom [LAT]
• Dauman/Katzenberg Feud Over Spielberg Officially Upgraded To Catfight [Defamer]

Jeffrey Katzenberg got his partner Steven Spielberg's back Wednesday, calling him "nothing short of a national treasure" and chiding Viacom CEO Philippe Dauman for implying otherwise.

"To suggest that not having Steven Spielberg is completely immaterial seems ill-advised," the DreamWorks Animation topper said at the Goldman Sachs Communacopia confab. "I think calmer heads need to prevail here."

Katzenberg went on to suggest that Dauman has any intention of salvaging their relationship, he should immediately grab his favorite boombox and stand underneath Spielberg's window, playing the love theme to The Terminal until the legendary director is convinced he won't be taken for granted in the future, as "a basket from Mrs. Beasly's and a 'I'm sorry' note with some hugging teddy bears on it isn't going to cut it this time, Phil."

• Katzenberg stands behind Spielberg [Variety]
• Previously: Viacom CEO Getting Ready To Have His Heart Broken By DreamWorks [Defamer]

Hard to believe it really is Bruce saying that stuff on AICN. I loved working with Bruce. He gave me a big hug one month ago at the GM party and we talked for 20 minutes. We even talked about working together again! I mean it would be sad if he felt this way - he's never one to hide his feelings - I say sad, in that he wouldn't be man enough to say it to my face. But truly sad that such a big time actor would have to hide on a little talk back section. So I really don't believe this story.

I find it also totally odd that my agents at William Morris got the call from Bruce's people to inquire if I would like to helm Die Hard 4, but I was already on Transformers.

Michael

Bay's accusations that Willis is nothing more than a "Hollywood friend" ("Mikey Boy! Great to see you! You been working out? Have your guy call my guy and let's do another project! I mean it! Hey, is that the crab cake tray over there? Gotta run!") and that his "people" invited the fauxteur to ruin Beedub's comeback vehicle momentarily give him the edge in their web-enabled spat. Of course, the dick-measuring contest won't truly end until July, after Live Free or Die Hard and The Transformers have both had their opening weekends, when the public will be able to see which online shit-talker's packing more box office inches.

• A response to Bruce Willis [MichaelBay.com]
• Previously: Bruce Willis Takes To Internet To Answer Fan Questions About How Many 'Fucks' They'll Hear In The New 'Die Hard' [Defamer]