Barry Diller: Up to What, With Whom?

Former Fox Inc. Chairman Barry Diller and Revlon owner Ronald O. Perelman have been regular lunch partners since the early 1980s, when the New York financier owned the Technicolor film lab. Heads turned, however, when the two recently showed up at the Grill in Beverly Hills.

Perelman found himself cast as the backer du jour in Diller’s next business venture--the nature of which is the subject of intense Hollywood interest. One New York gossip column speculated that Perelman might put his “makeup moola” behind Diller.

A Perelman spokesman insisted that the lunch was strictly social, but these days, no one can break bread with Diller--considered one of Hollywood’s most innovative executives--without being added to a growing list of prospective partners in a Diller-led movie or television company.

Investment banker Herbert Allen Jr., cable industry power John C. Malone and recording mogul David Geffen have all won mentions in the Diller Derby.

“I wonder how many people are saying they’re talking to Barry about becoming investors when they are really not,” said one Fox executive, exasperated by the rumor-mongering. “Only players talk to Barry, and nobody around here wants to be thought of as not being a player.”

Hollywood has been preoccupied with Diller’s future since he announced last month that he was leaving Fox to go into business for himself. NBC and CBS are seen as two potential targets for the Fox ex-chairman, who created Fox Broadcasting Co. Diller also has been linked to Paramount Communications Inc., though Paramount executives deny that talks have taken place.

Diller this week called the rumor that Perelman might help him buy NBC or CBS “stupid.” He said the talks surrounding his next move are “infinitely more interesting than that.” Whatever his decision, entertainment executives agree that Diller should easily be able to attract the backing he seeks.

Indeed, eager investment bankers appear to be falling over each other to lend a hand--and money.

“I could find $100 million tomorrow, no strings attached,” said one Wall Street banker with a background in media transactions. “There are institutional investors ready to go.”

Word of a possible Perelman connection surfaced last week, after the investor was seen with Diller in New York and Los Angeles. One knowledgeable source said the two had lengthy discussions in the Beverly Hills office of attorney Ed Hookstratten, where Perelman maintains work space.

Another maintained that Diller was merely seeking Perelman’s advice on basic business strategy, such as whether he should go into a deal before financing is lined up.

Allen, whose New York investment firm has close ties with Sony Pictures Entertainment and a new company, Savoy Pictures Entertainment, has been named as another potential partner. The investment banker would not comment.

Another whose name repeatedly surfaces, if only because of the clout he wields in the cable TV industry, is Malone, the high-tech-oriented chief executive of Denver-based Tele-Communications Inc.

TCI, the biggest U.S. cable operator, controls 23% of all cable households. The company could provide a big boost to Diller by offering valuable channel space on its cable TV systems.

At Fox, Diller and Malone collaborated on several joint ventures. TCI granted Fox affiliates favorable positions on local TCI cable TV systems. They, in turn, got to affiliate with a national broadcast network.

Malone and Diller, both entrepreneurs, are said to have “immense” respect for each other, but a TCI spokesman said there were “no conversations” with Diller about any venture.

Geffen’s name has surfaced because of his long friendship with Diller. He recently rebutted the rumor that the two might make a bid for Paramount, but people close to both men still hold out the possibility that Geffen--who has been openly exploring investment options since realizing $710 million from the sale of MCA Inc. stock--would go into a deal with Diller.

Diller’s biggest problem, as he sorts out his options, may be finding a multibillion-dollar backer who is also willing to grant him the autonomy he seeks. He quit Fox, after all, to be his own boss.

“Anyone who would give Diller the billions needed to buy something like Paramount isn’t going to just give it to him,” one source said. “There will be strings attached. So he may have to refocus his sights.”

Hollywood will be watching--and waiting--as the list undoubtedly grows.

Just Tuesday, a name was added as Diller and Geffen were seen lunching at Le Dome . . . with Walt Disney Studios Chairman Jeffrey Katzenberg.