A Hollywood Mystery : Entertainment: Despite Giancarlo Parretti's lavish lifestyle and his bid for MGM/UA, the Italian financier remains a little-known outsider.


Giancarlo Parretti, the fast-rising Hollywood movie mogul who has admitted that he rarely watches films himself, underscored the point at the Cannes Film Festival a couple of years ago. Encountering actor-director Clint Eastwood and his agent at a party, Parretti said: "Mr. Eastwood, I've always admired your work." The problem was that he was speaking to the agent.

Those types of blunders have helped shape Parretti's reputation as a consummate outsider. But if the Italian financier whose Pathe Communications Co. is trying to purchase MGM/UA Communications Corp. has a hard time sorting out the Hollywood elite, he has clearly seized upon its lavish lifestyle.

Like the film titans of old, Parretti appears to have endless resources and the imagination to use them. A $20-million Gulfstream IV jet with "69GP" on the tail ferries Parretti and his entourage between continents. Ground transportation is a $200,000 Rolls-Royce. Home is a 14-room mansion in Beverly Hills. Night life revolves around his own private Los Angeles club, Tramp of London, where he often disco dances the night away. And if he acts as if he owns the place when he walks into his favorite restaurant, Madeo, it's because he does.

"He's like the kid with his nose pressed against the candy store window who can suddenly buy the store," one acquaintance said. "He's living the life I'd live if I had the guts."

Parretti, however, finds himself facing unwelcome scrutiny as he pushes ahead with his audacious bid for an even bigger candy store, MGM/UA. There's the matter of his mysterious past and the persistent published reports, in Business Week, Newsweek and elsewhere, suggesting that he may have ties to organized crime, which he denies. There are the anti-Semitic remarks attributed to him in an Italian newspaper interview, which Parretti vehemently denied making in a subsequent rebuttal, and the prison term he faces over a "fraudulent bankruptcy" conviction in a Naples court.

Then there are the nagging questions over the MGM/UA acquisition, which seems to hang on financing as mysterious as Parretti. Skeptics question why he's investing so much cash in an anemic studio that will see much of its machinery dismantled under the buyout, in which Time Warner Inc. is paying more than half the cost in return for film distribution rights.

Parretti, 49, who is appealing the Naples court conviction, seldom responds to press queries anymore. And when he does, the result is often "flip answers, frequent inaccuracies, dogmatic conclusions or outright dismissal of tough questions," according to a story in Variety. Parretti refused to be interviewed by The Times. People in Hollywood who pride themselves on knowing everyone say Parretti may be the biggest enigma to emerge in years.

"I don't know him and I don't know if anyone knows him," said Brian Grazer, a co-founder of Imagine Films, an independent company that makes mainstream Hollywood films, as does Pathe.

The limited number of people in Hollywood who have encountered Parretti describe him as a gregarious man who lives like a king. His private jet alone is a luxury unknown to many of his peers. This type of aircraft can seat 12 to 21 people and generally comes with interior appointments costing $200,000 to $3 million. "There is none better," said one specialist.

Parretti can often be found holding court at a corner table at Madeo Ristorante on Beverly Boulevard, an upscale spot with rich wood, smokey mirrors and a large antipasto table. He is greeted by a parade of well-wishers offering hugs and congratulations, often in Italian.

One who has met with him says Parretti appears to be very bright, though his interests are limited. "He mostly talks about food, movies and his private plane," the acquaintance said.

Jack L. Gilardi, executive vice president at International Creative Management, a leading talent agency, said Parretti also likes to cut a rug. In fact, he is even said to be installing a private discotheque in his Beverly Drive mansion. "He loves to dance," Gilardi said.

A handful of Hollywood executives have seen yet another side of Parretti. The financier, who according to MGM/UA executives was not to be involved with the studio's operations during the course of the attempted buyout, recently asked the company's executives to screen-test a former Miss Universe who had just met with him and Dino De Laurentiis during a whirlwind tour of Los Angeles.

In a highly unusual move, MGM/UA asked director Tom Manckiewicz to drop his work on "Delirious," a John Candy movie, to conduct the test at Parretti's expense. "To rent out an on-location crew was a very easy request to consider" because of Parretti's prospective ownership of the studio, said Ken Spivak, the MGM/UA executive who arranged the test.

A week later, Parretti asked Pathe executives to screen-test another prospect, this time his own daughter. The daughter, an aspiring actress, was supposed to try out for one of the three leading roles in "Man in the Moon," a forthcoming Pathe film, according to individuals familiar with that incident. Pathe executives arranged for the daughter to be interviewed by director Robert Mulligan, but she was never tested for the role, the sources added.

And Securities and Exchange Commission filings indicate that Parretti's daughter isn't the only one involved in the family business. Documents show that Maria Cecconi, Parretti's wife, controls 88.5% of Pathe, along with him, through a Luxembourg-based company called Comfinance SA. According to the proxy statement filed by Pathe last year, Cecconi is also managing director of Comfinance and owns 30% of the company, while Parretti himself owns only 20%.

Other Parretti properties are held by a seemingly endless network of satellite companies. His $8.8-million colonial-style mansion is registered under Sherwood Development Co., a Panamanian corporation. Tramp of London, his private club in the Beverly Center shopping mall, is in the hands of Roma Trastevere Inc., which shares corporate offices with Pathe. A company called Wachs Restaurant Inc. is listed as the owner of Madeo Ristorante.

Pathe is an umbrella organization for mostly media-related enterprises that include a chain of theaters and a French film library. Parretti gained his foothold in Hollywood when he and his partner, Florio Fiorini, bought the troubled Cannon Group for $200 million in 1988. Prior to that, he backed a religious film called "Bernadette" directed by a priest.

At a time when many independent film companies are enjoying considerable commercial success, Pathe has yet to establish a Hollywood track record. The company's first major production, "Russia House" with Sean Connery and Michelle Pfeiffer, won't appear in theaters until Christmas. And securities analysts say they base their expectations for the company almost solely on Parretti's hiring of veteran studio executive Alan Ladd Jr. to run the film unit.

"Ladd is a wonderful filmmaker," said Lee Isgur of Paine Webber. "And the fact that Parretti was able to recruit him and keep him in his employ . . . says something."

SEC documents show that Parretti paid an unusually high price for Ladd. The contractual arrangement, in fact, virtually excludes Parretti from the company's film business. Ladd, at his "sole discretion," can make 50 films under the contract, within certain budgetary limits. He is paid $750,000 a year, 10% of Pathe's profits and an added $250,000 per film, with a guarantee of at least $2 million annually from the latter fees.

Pathe is also required to maintain a movie development pool of $20 million and to provide up to $125 million a year for films during the contract's six-year term. Ladd must "consult" with Parretti and share control over foreign distribution decisions with both Parretti and Yoram Globus, who serve as co-presidents of Pathe. But Ladd's contract guarantees him control over any film in the works at a company acquired by Pathe--a provision that apparently gives him the legal right to control MGM/UA's film production if the purchase by Pathe and Time Warner goes through.

One executive who has worked closely with Parretti said the financier's arrangement with Ladd shows his hands-off management style. "He's not a movie man at all," said the associate, who asked not to be named. "He doesn't see movies. He doesn't look at trailers or at ads. He's not interested in meeting stars. He's a straight financial man."

Paul Maslansky, who is producing "Russia House" for Pathe, paints a similar picture. Maslansky said he encountered Parretti only once during the making of the $20-million film, and in that instance Parretti merely socialized with the cast and crew on the London set.

"He (Parretti) is in keeping with the tradition set by other people in his position," said Maslansky, an admirer. "He delegates authority to people. His job is to oversee the running of a major corporation. . . . And he's doing it, it appears, quite successfully."

The son of an olive merchant in the Umbrian hill town of Orvieto, Italy, Parretti claims to have made his fortune by buying, restructuring and selling troubled companies in Europe.

Explaining his thirst for entertainment companies, including his unsuccessful bids last year for De Laurentiis Entertainment Group and New World Entertainment Inc., Parretti has in the past brashly predicted that he will one day preside over the "biggest film group in the world."

Yet Pathe is hardly a financial success story so far. As of Dec. 30, the company listed $6.6 million cash on its balance sheet, while debt exceeded $180 million. About 52% of its revenue came from film operations, while its European theater holdings accounted for the rest. The film division posted a $66-million operating loss for the year, which was partially offset by earnings from the theaters, and fully 70% of its revenue came from overseas in 1989. Excluding extraordinary gains from asset sales and other items, the company continued to post an operating loss in the first quarter of 1990.

Pathe's biggest financial gambit, the MGM/UA deal, appears to be moving ahead, albeit slowly and awkwardly. Pathe last week got a one-week extension, until May 17, to make its third $50-million down payment on the purchase. The company's latest SEC filing also showed that Parretti's Comfinance holding company will contribute $450 million to the deal in return for a one-third stake in MGM/UA. But the filing did not reveal where Comfinance will get the money.

A simmering legal skirmish isn't helping the company's cause, either. The skirmish started when Pathe recently ran a newspaper advertisement saying that Giovanni DiStefano had never been an officer or director of the company. Ted Cohen, Pathe's attorney, said the company took this step when it learned that DiStefano, who was claiming to be a Pathe executive, had a "shady past."

DiStefano sued Pathe in Los Angeles Superior Court after the ad appeared, claiming punitive damages of $281 million. DiStefano asserts that he was a Pathe senior vice president "virtually in charge of sales and acquisitions" from November, 1989, until early this year.

Pathe then countersued last week, claiming that DiStefano owes the company $1.7 million for an unpaid loan, rent and services. The company is also seeking contractual damages for failing to purchase Pathe shares as promised.

Sources familiar with Pathe's finances insist that the funds are there to close the MGM transaction--the tender offer expires June 23--and the only delay will be the documentation.

Others aren't so sure. "Since not much is known about it besides the money, we can't tell if MGM/UA is a good deal yet," Isgur said. "Basically, (Time Warner Co-Chairman Steven) Ross, (MGM/UA controlling shareholder Kirk) Kerkorian and Parretti are the only ones who know the total structure of this deal."

Meanwhile, the upcoming release by Pathe of commercially oriented films such as "Quigley Down Under," starring Tom Selleck, and "Crisscross," with Goldie Hawn, may boost domestic receipts. And as Parretti's stake in Hollywood grows, so does his presence in the film capital.

Pathe has established a reputation for largess among Hollywood fund-raisers. The company recently plunked down $8,000 for a table at an Earth Day benefit for the statewide Environmental Protection Initiative, and a leading Hollywood organizer said the company's executives are among the most cooperative when it comes to assisting a variety of causes.

And Parretti, who once struggled with even the most primitive English, now spends as much as a third of his time in the United States, according to his associates. The stocky and volatile financier's English is also rapidly improving, though friends say he is still most comfortable speaking in his native language in the company of Italian compatriots.

One of those is independent filmmaker Dino De Laurentiis, who has been a mentor to Parretti since he arrived in Hollywood. It was De Laurentiis who introduced Parretti to many of Hollywood's top power brokers, and legend has it that Parretti hosted his first big party at De Laurentiis' home, where he greeted his guests from the balcony with a pope-like wave.

These days he's more likely to entertain friends and business colleagues at Tramp, the posh dinner and dancing club where Parretti is said to be a regular on the disco floor, or at his mansion, which is said to be festooned with paintings by Goya, Picasso and Miro.

The disco came about because, "like a lot of Europeans, they came here and said, 'Where's the night life?,' " said one acquaintance who has been there. "They thought, if you buy a club and do it properly, people will come. You know, European night life starts at 10 or 11."

Guests say an evening at the Parretti house usually includes fine wine, pasta made by Parretti himself and expensive Cuban cigars. Gilardi, the agent from ICM, called Parretti a great host.

"He's the kind of guy who waits with his family to greet you at the door," Gilardi said.

Whether Hollywood will ever greet Parretti as warmly is less certain. There are those who say he will always be dismissed as an outsider and a man of mystery.

But Gilardi predicted that time will alter those perceptions.

"I've found any time a new person comes in, in some untraditional way, everybody knocks him," Gilardi said. "Giancarlo came in that way, but once you sit down with this man, he's as warm and charming as anyone you'd like to meet. I think the community will accept him."

Parretti also seems to think so. Pathe is throwing a chic party at the Cannes Film Festival later this month, apparently in anticipation of celebrating its acquisition of MGM/UA and Parretti's ascent into the upper reaches of his adopted town's most glamorous business.


Some companies controlled by Giancarlo Parretti and his associates:

COMPANY: Cannon Pictures Inc. LOCATION: Los Angeles TYPE OF BUSINESS: Movie production and distribution

COMPANY: La Cite du Cinema SCI LOCATION: France TYPE OF BUSINESS: Real estate

COMPANY: Comfinance SA LOCATION: Luxembourg TYPE OF BUSINESS: Investment and holding company

COMPANY: Francesca SpA LOCATION: Italy TYPE OF BUSINESS: Real estate

COMPANY: Pathe Communications Corp. LOCATION: Los Angeles TYPE OF BUSINESS: Movie production and distribution and theaters

COMPANY: Pathe-Nordisk A/S LOCATION: Denmark TYPE OF BUSINESS: Movie production, distribution and exhibition in Denmark, Finland, Norway and Sweden

COMPANY: Interfly Inc. LOCATION: Los Angeles TYPE OF BUSINESS: Charter airline

COMPANY: Max Theret Investissements SA LOCATION: France TYPE OF BUSINESS: Controls Pathe Cinema, a theater company

COMPANY: Melia International NV LOCATION: Netherlands TYPE OF BUSINESS: Travel agencies

COMPANY: Renta Corp. LOCATION: Los Angeles TYPE OF BUSINESS: Real estate

COMPANY: Renta Inmobiliaria SA LOCATION: Spain TYPE OF BUSINESS: Real estate

COMPANY: Renta Inmobiliaria International LOCATION: Netherlands TYPE OF BUSINESS: European theater and real estate interests

COMPANY: Roma Trastevere LOCATION: Los Angeles TYPE OF BUSINESS: Nightclub

COMPANY: SASEA Financiere SA LOCATION: Switzerland TYPE OF BUSINESS: Investment and holding company

COMPANY: Sherwood Development Co. LOCATION: Panama TYPE OF BUSINESS: Real estate

COMPANY: Wachs Restaurant Inc. LOCATION: Los Angeles TYPE OF BUSINESS: Restaurants

Source: Pathe Communications filings with the Securities and Exchange Commission

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