Sony Will Cede Property for Guber, Peters : Film: Two top producers will be released from their contract with Warner under a tentative settlement. They will be free to manage Columbia Pictures Entertainment.

After more than a week of filing bitter accusations against each other in court, Warner Bros. and Sony Corp. reached a tentative settlement Tuesday that would release producers Peter Guber and Jon Peters from their Warner contract--leaving them free to manage Columbia Pictures Entertainment for its new parent company, Sony.

Under the agreement, Columbia would swap its 35% share of the 150-acre Burbank Studios for the old MGM property in Culver City that Warner acquired when it bought Lorimar Telepictures Inc. two years ago, according to industry sources. Warner, which owns 65% of the Burbank lot, had made this demand in earlier talks.

The tentative settlement also would give Warner an ownership share in Sony’s lucrative CBS Record Club, a mail-order operation that Sony got last year when it bought CBS Records, according to industry sources. One source said, however, that Warner and Sony had been negotiating that issue before the dispute over Guber and Peters arose.

“No cash is going to change hands,” one knowledgeable industry source said of the agreement, “but assets will be traded back and forth.” The agreement may also address an earlier Warner demand for the cable-TV rights to Columbia movies, sources said.

As could be expected, Warner would also retain the rights to some 50 film projects now in development at Guber-Peters Entertainment Co. These include “The Bonfire of the Vanities” and two sequels to “Batman,” which has grossed nearly $250 million at U.S. theaters.

Sony already is paying $200 million for Guber-Peters on top of the $3.4 billion it spent to acquire Columbia in a tender offer that expired Tuesday. In addition, the Japanese firm agreed to assume $1.5 billion of Columbia’s debt.

In a statement Tuesday afternoon, Warner, Sony and Guber-Peters said that the three companies had agreed to request that a court hearing scheduled for Thursday be postponed “to allow the parties to have further discussions.”

At that hearing, a Los Angeles Superior Court judge was expected to rule on Warner’s request for a preliminary injunction barring Guber and Peters from taking top management positions at Columbia Pictures. Warner had refused to release its most prolific producers, who made hit films such as “Rain Man” and “Gorillas in the Mist,” from their exclusive five-year contract.

The settlement came as no surprise. Since Warner filed a $1-billion suit against Sony on Oct. 13--provoking a countersuit from the Japanese electronics giant--many industry insiders have viewed the increasingly nasty accusations and countercharges as posturing designed to strengthen their positions at the bargaining table.

A central issue in the legal dispute was whether Warner executives had told Guber and Peters that they could break their contract if they were offered a chance to run a major studio. Guber and Peter said in court documents that they were given such oral assurances, but Warner executives have vigorously denied it.

Staff writer Kathryn Harris contributed to this story.

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