Times Staff Writer

Sometimes it pays not to advertise.

Just two months after Cannon Films proudly announced it had signed Dustin Hoffman to star in "LaBrava," Hoffman has reportedly terminated the agreement because of two unauthorized full-page ads that Cannon ran in Hollywood trade papers.

According to a source close to the negotiations, Hoffman's contract--described by the source as "the richest star deal in entertainment history"--specifically grants him approval on all advertising connected to the film. Hoffman, the source said, was not consulted on the ads, which showed a picture of Hoffman and read: "Welcome to The Cannon Family Dustin Hoffman."

"Dustin sent them a letter terminating the contract for their fundamental breach of contract," the source told The Times. "He felt he could no longer rely on their abiding by the contract."

The Times attempted to reach Hoffman, but the actor is "out of the country on vacation," a spokesman at his New York-based Punch Productions said. The spokesman said, "It's definitely, definitely off."(Hoffman recently completed filming the comedy "Ishtar" for Columbia Pictures with co-star Warren Beatty in New York.)

Yoram Globus, president of Cannon Films, insisted that "LaBrava" is still on. "There is no problem whatsoever," he told The Times. "I can tell you nothing about this because from my understanding the deal is still in place. There might be discussion about a few points."

Globus denied that the contract guaranteed Hoffman approval of all ads as well. "No way, he doesn't have approval rights for advertising. Look, I haven't heard from Dustin Hoffman. When it comes to lawyers, it's a different ballgame."

Though Hoffman was unavailable to comment on the conflict, the source said the alleged breach of contract made the actor skeptical about working with Cannon. "His thinking was if they were going to ride roughshod over his rights on this kind of thing, then what happens when he gets into the difficult process of making a movie?"

The March 19 ads that provoked Hoffman's apparent decision to walk away from the agreement were not the first ads Cannon ran without the actor's approval, the source said. "On two prior occasions these guys took out similar ads and they were warned that this was a breach of contract," the source said. "And then they did it again."

In recent months, three Oscar nominations for Cannon's "Runaway Train" and an impressive roster of big-name talent have landed the company newfound respect and even acceptance from the mainstream Hollywood establishment. Cannon, which had been known primarily for producing low-budget exploitation fare, has announced that Al Pacino will star in two movies. Chuck Norris has been signed to a seven-year exclusive deal. Norman Mailer and Paul Schrader are writing scripts and Franco Zeffirelli will direct a Cannon film, according to Globus.

"People are going to Cannon early on," says ICM literary agent Bill Block. "They are no longer the court of last appeal but an initial source of financing. And they pay."

According to sources close to the "LaBrava" deal, Hoffman was to be paid more than Cannon had paid any other star to date, including the $12 million Cannon paid Sylvester Stallone for starring in the soon-to-be-released "Over the Top."

In January, The Times reported that Hoffman would be paid about $6.3 million and 22.5% of the gross for "LaBrava." "Your figures were very low," an informed source said.

The current difficulties with "LaBrava" spell bad news for director Hal Ashby ("The Slugger's Wife"), who was set to direct.

It is ironic that "LaBrava," based on the Elmore Leonard novel about a retired Secret Service agent caught in a blackmail scam, should be undone by an advertisement in the trades. The script took a tortuous route before landing the go-ahead for production at Cannon. "LaBrava" had been pitched and turned down at nearly every major studio.

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