Like Carolco, Studio’s Boss Trims Sails : Entertainment: Emblematic of the company’s cost cutting, Mario Kassar is without his 203-foot yacht at this year’s Cannes Film Festival.

When Carolco Pictures Chairman Mario Kassar cruised into last year’s Cannes Film Festival on a 203-foot yacht stocked with the best food and drink, he instantly became everyone’s favorite party animal.

The Gatsby-like goings-on aboard the boat earned Kassar nearly as much attention as the picture he had come to promote. And that’s saying a lot, since the movie was “Terminator 2: Judgment Day.”

This year, by comparison, people may be hard put to find the Beirut-born Kassar atthe annual film industry extravaganza on the French Riviera. The good ship Mario has been dry-docked. His only big exposure came last week, when Carolco’s erotic thriller, “Basic Instinct,” opened the festival.

Kassar was flanked by actors Michael Douglas and Sharon Stone as he scaled the red-carpeted, paparazzi-lined steps of the Palais des Festival for the gala showing Thursday.

Afterward, he left the party-throwing to the French government.

“I have no reason to (host a) party,” Kassar said. “There will be other people with boats and parties, and I will attend them.”

Kassar’s new reserve may be understandable. He faced his own judgment day earlier this year when Los Angeles-based Carolco, once considered the industry’s most successful independent movie producer, almost tumbled into bankruptcy.

The company’s near-downfall was its bloated operations. Carolco reported $91 million in losses for the first nine months of 1991, despite the success of “Terminator 2,” which took in nearly $500 million worldwide.

Kassar owes his survival to his three foreign partners--France’s Canal Plus, Japan’s Pioneer Electronics and Italy’s RCS Video--which provided a last-minute cash infusion in return for more control over company operations.

The 40-year-old executive said the partners eventually may enlarge their stake in the company, in which he retains a 33.8% stake. Kassar called the past year a “roller-coaster ride,” attributing Carolco’s problems to a free-spending mentality better suited to the 1980s than the ‘90s.

“As chairman, I’m as much to blame as anybody,” he said.

Kassar remains well compensated. His new contract guarantees him $1.5 million this year, not counting bonuses. And he isn’t exactly slumming it at Cannes, having traded his yacht for a room at the plush Hotel du Cap, famed home to industry titans during the festival.

But the flamboyant movie maker said Carolco will continue to scale back costs.

Filmmaking will be financed on a picture-by-picture basis, and Carolco is actively in the market for co-financing deals. Kassar said the firm--which expanded into video, record retailing and other areas under former President Peter Hoffman--will concentrate solely on “event” pictures such as “Basic Instinct,” which has taken in more than $84 million domestically. Hoffman was forced out amid growing tension between the two men over the company’s direction.

Kassar, meanwhile, was blamed for single-handedly escalating costs in the film industry when he purchased Joe Eszterhas’ “Basic Instinct” script for $3 million, then paid Douglas $15 million to star in the controversial movie. One studio head dubbed him “the man who couldn’t say ‘no.’ ” And in general, the industry, which has suffered declining profits, seemed annoyed with Kassar.

But he offers no apologies.

“Whatever price I paid for ‘Basic Instinct,’ I only paid a small percent over the last bidding offer,” he said. “ ‘Basic Instinct’ is a movie that a lot of studios would liked to have done.”

Kassar--whose long hair and gold jewelry further his image as an international jet setter--has always had his greatest success with mega-pictures such as “Basic Instinct.” He has stumbled when he ventured into such non-action genres as comedy and romance.

Carolco made its name with the “Rambo” films and helped turn Arnold Schwarzenegger into one of the world’s biggest stars with movies such as “Total Recall” and “Terminator 2.”

Despite the company’s uncertain future, Kassar said he expects to make a “Terminator 3” in the next five to seven years. At $90 million, the second installment was the most expensive movie ever. But Kassar said the cost of special effects could come down in the years ahead.

He plainly feels most attuned to big films with big stars. Mega-stars are essential for attracting foreign pre-sale agreements, he explained.

Yet he denied that Carolco has boxed itself into a blockbuster mentality.

“We want to make movies that will work in all markets,” he said. “That doesn’t mean that someone has to have a machine gun or be in a space rocket. It has to do with the elements.”

Carolco’s next picture, due this summer, is a traditional action film called “Universal Soldier.” The company drifts into more uncertain territory later this year, when its big-budget film about Charlie Chaplin hits theaters. Now in production is “Cliffhanger,” an action picture starring another muscled and monosyllabic Carolco favorite, Sylvester Stallone.

On La Croisette, the beachfront walkway where much of the business of Cannes is conducted, Carolco is occupying its usual spot this year. The small office is festooned with posters from current and upcoming Carolco films. By any measure, it looks like business as usual.

The legendary yacht, however, where luminaries such as Schwarzenegger and the terminators of the international film financing world partied last year, has become a sore subject, even to the normally effusive Kassar.

“I don’t know if I had the biggest yacht,” he said testily. “I rented a boat.”