(FORTUNE Magazine) – The combination of Spielberg, Katzenberg, and Geffen might well be the greatest collection of talent since Jordan, Johnson, and Bird hit the hardwood together in the 1992 Olympics, but investors in DreamWorks could miss reaping the full benefits of that genius because of the not-so-dreamy deal being offered to them. A look at the "Terms for Equity Investments in DreamWorks," now circulating among prospective partners, reveals that Messrs. S.K.&G. put up 10% of the firm's capital but get two-thirds of the profits and 100% of the voting stock. Still waving your checkbook?

Yes, DreamWorks has pulled in $500 million from Microsoft co-founder Paul Allen, as well as some $30 million from Microsoft itself. Ziff Brothers Investments also plans to ante up roughly $27 million. And high-level sources at DreamWorks insist that Capital Cities/ABC and Chemical Banking, among others, will sign on soon. "I think the names of those who've invested with us speak for themselves," says Geffen. "No one has walked away because of the terms." Perhaps. But a ballyhooed deal with the California Public Employee Retirement System is apparently stalled because its managers want preferred stock, which DreamWorks so far won't issue. And heads of other major organizations--savvy, deep-pocketed investors all--have told Fortune they want no piece of this action.

The plan is for DreamWorks to have five classes of stock: "A" and "S" for outside investors, "B" and "SKG" for the principals, and "E" for employees. The three amigos hope to raise $900 million, with up to $216 million in class S, which is for smallish, "strategic" investments like Microsoft's, and $684 million in class A stock--reserved for big boys like Allen, who also gets a seat on the board. If all the class S isn't sold, the balance may be raised in class A. The three principals will put up $100 million ($33.3 million each) yet will receive 67% of the firm's profits. Class A stockholders get 25% of earnings-- with Allen now claiming two-thirds of that fraction-while class S investors are left with 8% and a seat on the board. The SKG stock grants the principals 100% voting control. Implied market value of the company? If it takes $900 million of capital to get a third of future profits, then 100% would be worth $2.7 billion.

Other tidbits: The three owners will sign seven-year employee contracts that pay them $1 million annually, "subject to adjustment for increases in the consumer price index," plus "other employee and fringe benefits and perquisites on terms that are customary for similarly situated executives in the entertainment industry." (Spielberg gets paid extra for each movie he directs.) They have a $2 million pool to draw from annually for personal loans. They are prohibited from flying together and will be provided with security personnel.

Interestingly, DreamWorks is being hatched as a Delaware "limited liability company," or LLC. An LLC is taxed like a partnership. Profit passes directly to the owners and is taxed only on the owners' level. But like a corporation, an LLC protects all its holders from personal liability in the event of litigation. Nice, huh? There are also some restrictions in buying or selling ownership positions in an LLC, which should be fine with the Big Three since it helps keep investors locked in for ten years.

Here's what to expect from the principals. Spielberg: will do whatever he wants. "Mr. Spielberg will endeavor to direct no less than three films for the company over the seven-year term...however, [if he] fails to so direct three films he will have no contractual liability." Katzenberg: will work hardest. He needs the money, and building DreamWorks has everything to do with showing ex-boss Michael Eisner he made a mistake letting him go (see "The Mother of All Divorces"). As at Disney, he will run the company's animated-film unit, which plans to release at least two movies by the year 2000, including one based on the Ten Commandments. Geffen: will likely be competing with Eisner for the services of Mo Ostin, the recently departed chief of Warner Bros. Records. Says CBS CEO Larry Tisch: "I think records could well end up the most valuable part of the company."

And what about Paul Allen's deal? Allen owns some 56 million shares of Microsoft, worth about $3.9 billion. From mid-February to mid-March, Microsoft stock climbed from $60 a share to $70, giving him a pretax gain of $560 million--for the month. Sure, he owns a stable of promising techie minicompanies, but he also bought the Portland Trail Blazers and is building a museum devoted to the likes of Jimi Hendrix--deals driven by love and vanity, not money. So for Allen, whether his return is in the single or double digits doesn't really matter. The kick of jetting to L.A. and hanging out with his three new pals just may be return enough.