Hollywood: Get a Line on This Deal

While the Bell Atlantic/Tele-Communications Inc. marriage and prospect of other phone companies grabbing a stake in entertainment has Hollywood reeling, it was probably inevitable that the Bell family would invade the world’s most phone-obsessed town.

Bell Atlantic and its siblings should feel right at home in the place singularly responsible for glamorizing cellular communication and for making phones a fashion accessory--as they look to the day when all manner of programming will be delivered over their wires.

Hollywood’s homage to the phone stretches from “Sorry, Wrong Number” to “When a Stranger Calls.” Phones also played roles in “His Girl Friday” and “The Player,” while an entire episode of “The Twilight Zone” centered on a guy reaching out and touching his wife from the great beyond--upholding the tradition of creepy callers almost always being men.

Hollywood’s infatuation with the phone further extends to the art of the deal. The Polo Lounge was legendary for having them at all of the best tables. And for years screaming executives have site-tested the volume capacity of phones free of charge.

The word phony has also been used a lot in connection with Hollywood, though it is from the British word, fawney , rather than Alexander Graham Bell’s invention. And who could forget actor Alec Baldwin calling Disney execs “phone monkeys”?

Strangely, phones remain a status symbol in Hollywood, more than 100 years after the first call. Hollywood moguls have multiple lines not only to their offices, but their homes, cars, boats and planes.

Phone skills are even a valued business trait--which explains why colleagues are awe-struck by media mogul David Geffen’s ability to engage in hundreds of calls a day, and still remember who’s on the line at any given time, or why writers invariably mention that Creative Artists Agency Chairman Michael Ovitz often wears a headset while roaming his office.

Hollywood also has a keen interest in ongoing efforts to develop a universal phone number for each person, which would cut way down on Rolodex clutter. Leading that drive--fittingly enough--is TCI, the cable company that is now being swallowed up by Bell Atlantic.

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The Bell Atlantic/TCI alliance, and the ongoing bidding war over Paramount Communications, has also resulted in reappraisals of earlier media partnerships.

Most analysts applaud Bell Atlantic’s acquisition of TCI, which is valued as high as $30 billion, because it gives the Philadelphia-based Baby Bell control over the country’s leading cable operator and combined access to more than 40% of the nation’s households.

By comparison, some question whether NYNEX is getting anything substantive for its recent agreement to invest $1.2 billion in Viacom Inc., one of two companies competing for Paramount. Even if Viacom prevails over Barry Diller’s QVC Network, NYNEX will have no control over the ways in which Paramount programming is used, according to people who have followed the deal.

“It’s more in the nature of an informal alliance or consultancy,” said one top Wall Street analyst who asked not to be named. “At the most it’s a first-use option.”

The opposite opinion holds in connection with US West. Many analysts now feel the phone company got a bargain when it acquired a 25.5% stake in a Time Warner entertainment spinoff for $2.5 billion. The reason: Entertainment company values have risen rapidly since the partnership was negotiated last spring. The US West deal valued Time Warner’s entertainment holdings--including Warner Bros. studio and HBO--at less than $10 billion. Many analysts now place the value much higher, given that QVC’s bid for Paramount is nearly $10 billion.

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While there’s no supporting evidence, some Wall Street sources insist that a rival bid for TCI could still surface.

Those sources say the most likely candidates are the phone companies left out of the action, including AT&T; and BellSouth. AT&T; was unable to come to terms with TCI before but may be reconsidering its position on cable in general, sources say. BellSouth was negotiating with QVC over a possible role in the Paramount deal before the Bell Atlantic/TCI partnership was announced Wednesday. It is also said to be in the hunt for a deal.

While many analysts view Bell Atlantic/TCI as a perfect marriage, people familiar with TCI Chairman John C. Malone say he would have a difficult time resisting a better deal. “This guy would take a higher offer in a second,” said one executive.

Then again, it may be wishful thinking on the part of the investment community.

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Bell Atlantic Chairman Raymond W. Smith should prepare himself for the media spotlight if the TCI acquisition goes through. Even though Bell Atlantic is the bigger company, cable operators tend to attract considerably more attention.

In the 10-month period leading up to the deal, TCI’s Malone appeared in 30 Los Angeles Times articles, 42 New York Times articles and 44 Wall Street Journal articles. Smith made the Journal once, The New York Times once and was totally absent from The Los Angeles Times.

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Hollywood is full of bright, opinionated people who tend to be totally inarticulate, as it turns out, on the meaning of the new technology alliances being formed. Here were some of the more penetrating insights gathered this week. Major producer: “This is a self-fulfilling Wall Street prophecy.” Major entertainment software executive: “This is a huge step forward.” Major independent production company executive: “All I know is Malone is the guy to go to now for a loan or a foundation grant.”

Times staff writer James Bates contributed to this story.