Times Staff Writer

"Brazil," a film that may not sell one ticket at the box office this year, was nevertheless named best picture of 1985 by the Los Angeles Film Critics Assn. on Saturday.

The movie, the subject of a bitter feud between its makers and its American distributor, also won the group's best director and best screenplay awards.

"Brazil" director Terry Gilliam launched a public campaign this fall to stop Universal Pictures from editing a different version of his movie for American audiences. Friday, the day before the critics voted, studio head Sidney Sheinberg acknowledged that Gilliam had won that battle and that Universal will release Gilliam's version early next year.

"We finally got to the point where we had to say we can't do it (release another version)," Sheinberg said. "If we did, we would face the prospect of having it reviewed against a phantom version. It's a no-win situation."

Sheinberg said he has turned the movie over to the studio's distribution and marketing divisions with instructions to do the best they can with it. Asked if that might include a one-week release in Los Angeles in order to qualify for the Academy Awards, Sheinberg said that's a decision to be made by marketing.

Universal's marketing department is busy on another movie now, Sydney Pollack's "Out of Africa." That $30-million film won two critics' awards Saturday--for Meryl Streep, who out-polled Whoopi Goldberg ("The Color Purple") for best actress, and for cinematography of David Watkins.

"Out of Africa" was also the runner-up to "Brazil" in the best picture voting.

In other categories:

William Hurt ("Kiss of the Spider Woman") was named best actor. Jack Nicholson ("Prizzi's Honor") was second.

John Gielgud (for both "Plenty" and "The Shooting Party") won as best supporting actor. William Hickey ("Prizzi's Honor") was the runner-up.

Anjelica Huston ("Prizzi's Honor") won as best supporting actress, ahead of Oprah Winfrey ("The Color Purple").

Akira Kurosawa's "Ran" and "The Official Story," from Argentina, tied for best foreign film. Kurosawa, the runner-up to Gilliam as the year's best director, will receive the group's Life Achievement Award.

"Ran" also won an award for Toru Takemitsu's score. Mark Isham's score for "Trouble in Mind" finished second.

Laura Dern, from "Mask" and "Smooth Talk," won the New Generation Award. Whoopi Goldberg was again the runner-up.

Gilliam shares the screenwriting award with playwright Tom Stoppard and actor Charles McKeown for "Brazil." The runner-up screenplay was "Prizzi's Honor," written by Richard Condon and Janet Roach.

The Los Angeles critics, meeting in the appropriate setting of the Beverly Hills Gun Club, also voted special citations of merit for Claude Lanzaan's "Shoah," a nine-hour documentary analysis of the Holocaust, and for experimental film maker Rosa von Praunheim's "Fear of Emptiness."

Before the Los Angeles critics voted the three awards to "Brazil," Sheinberg said that he believes the controversy surrounding the movie has probably enhanced the film's box office prospects, but not enough to convince him it can make its money back.

"Maybe we'll be pleasantly surprised and the film will be a hit," he said. "I hope audiences love it, and that it makes $100 million and I can give Mr. Gilliam and Mr. Milchan ("Brazil's" producer) credit for making it happen. But if people think the movie is too short it will come as a stunning surprise to me."

Sheinberg has maintained all along that "Brazil," at two hours and 11 minutes, is too long, that it is confusing and that it needs a "satisfying ending."

Gilliam, an American who works in London, said the ending was not negotiable. After cutting 11 minutes from the European version and having that version rejected, he refused to cooperate with the studio any further--even though his contract required him to.

Under Sheinberg's supervision, Universal editors began re-editing "Brazil" with intentions of testing both versions with preview audiences before deciding which to release. Sheinberg said the studio's cut had reached the scoring and dubbing stage when they decided last week to abandon it.

He also acknowledged that negotiations with Milchan, who has been attempting to buy "Brazil" back from the studio, have stalled and that there is little chance of another studio taking over distribution of the movie.

Sheinberg hints that the off-screen "Brazil" story may eventually be played out in court, and added that Gilliam's victory in forcing the studio to accept his last cut is a setback for the collaborative process of film making.

"To me, the saddest issue is that Mr. Gilliam signed a contract and later repudiated it," Sheinberg said. "He did a horrendous disservice to directors who do comply with their contracts."

Gilliam maintained that Sheinberg wanted to throw away the original script, which he had approved as a $9-million investment for Universal, and try to patch something more commercial together.

To do that, he said, was a violation of the faith of the actors and others who worked on the film. Robert De Niro, who plays sort of a swashbuckling refrigeration repairman in Gilliam's Orwellian world, agrees.

"I wanted to be part of the movie because I thought it was a worthwhile project," De Niro said, in a phone conversation from London last week. "I never felt for a minute that it would not be accepted for what it was. These people (studio executives) shouldn't get involved in movies that they don't understand."

Despite his capitulation on the release of Gilliam's version of "Brazil," Sheinberg said he still believes better films spring from collaboration than from the passion of one artist.

"If you're working with a director who will listen to research, who will do further work . . . when that process is followed, you generally end up with a better result. Here, we didn't have that process."

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