LOS ANGELES (Reuters) - Hollywood director Steven Spielberg -- whose relationship with studio DreamWorks' parent, Paramount, has been the subject of much speculation -- will be free to negotiate linking up with other studios as of May 1, two sources familiar with the studio said on Thursday.


But Spielberg was not expected to decide whether or not to terminate his deal with Paramount until the summer, they said.

One source said it was an "absolute possibility" that Spielberg, whose upcoming "Indiana Jones and the Kingdom of the Crystal Skull" is due to open on May 23, may choose to remain with Paramount, a unit of Viacom Inc.

DreamWorks declined comment and a spokesman for Viacom was unavailable.

DreamWorks was acquired by Viacom's Paramount Pictures in 2005 for $1.6 billion.

Spielberg and DreamWorks chairman David Geffen and co-chairman Stacey Snider have agreed to stay on with Viacom through the end of 2008, but there has been persistent speculation they may choose to leave Paramount at the end of 2008.

DreamWorks Animation SKG Inc, a separate publicly held studio run by Jeffrey Katzenberg, has its own deal to have its movies distributed by Paramount through 2012.

Various studio executives have cited rumors that Geffen and Spielberg are looking to move their studio to General Electric Co's NBC Universal.

(Reporting by Sue Zeidler; Editing by Andre Grenon)
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