Solo Producers Milchan, Vajna Hope to Take Success Public

In Hollywood circles, few independent producers command more respect than Arnon Milchan and Andy Vajna. Now they’re poised to find out whether institutional investors feel the same way.

Both of the producers are in advanced discussions about taking their companies public, according to knowledgeable sources, who say Milchan and Vajna are looking to capitalize on the excitement generated on Wall Street by the $10-billion Paramount Communications takeover battle.

Milchan is said to have retained Goldman Sachs in New York to advance an offering in his Regency Enterprises, which is best known for hit movies such as “Under Seige” and “J.F.K.” While Milchan declined to comment on the discussions, sources say he hopes to raise $100 million or more.

Vajna, a co-founder of Carolco Pictures who went on to produce “Tombstone” and “Medicine Man” through Cinergi, is said to be seeking substantially less than that. Sources say he has retained Los Angeles-based Seidler Cos. to go out with the offering as early as April or May.

The deals would give both producers a stronger financial footing as they move to expand their production slates. But Wall Street analysts say public offerings in small entertainment companies may remain a tricky proposition, since many people are still smarting from such 1980s-era failures as Weintraub Entertainment Group, Vestron and De Laurentiis.

“I would say that Wall Sreet is quite skeptical and that these deals will have a hard time being done,” said one New York analyst who asked not to be named.

Skeptics say new offerings may also be stalled by concerns that Hollywood is already producing too many movies, with Disney expanding its slate, MGM on the road to recovery, Viacom gearing up to run Paramount, cable mogul Ted Turner expanding his Hollywood operations and Savoy Pictures just coming into its own.

In the case of Milchan and Vajna, they’re also known more as entrepreneurs than the kind of professional managers who put investors’ minds at ease. But analysts say that may be offset by their impressive track records and the fact that both are aligned with major studios.

Milchan’s Regency Enterprises is based at Warner Bros. and functions under a complex array of financing deals. Its latest investor is Australian media mogul Kerry Packer, who recently purchased a “significant” interest in Regency.

Milchan has said he wants to increase production from five to 15 pictures a year by 1995--which may be the best explanation for his interest in an offering.

Vajna, by comparison, is just getting Cinergi rolling. “Tombstone,” which took in an impressive $52.8 million at the domestic box office, will be followed by “The Color of Night,” a psychological thriller starring Bruce Willis, and “Renaissance Man,” a comedy directed by Penny Marshall and starring Danny DeVito.

Disney has North American and Latin American distribution rights to Vajna’s films through 1995, but Vajna controls the remainder of the world, financing much of his work through the same type of pre-sale agreements he helped devise at Carolco.

Analysts say other entertainment company offerings will surely follow if Milchan’s and Vajna’s succeed. Several companies already have feelers out.

“There’s a scarcity value in these companies,” said one analyst. “Plus, you have a whole new group of successful independent filmmakers out there.”

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A Frans-less festival: Frans Afman, a colorful figure on the film festival circuit, was said to be a no-show at the just-concluded American Film Market in Santa Monica. Organizers could not explain his absence and said it was the first time in memory he has not attended.

The affable Dutchman became known as the “banker to the stars” in the 1980s, when he oversaw hundreds of millions of dollars in loans to independent production companies as the entertainment czar for French bank Credit Lyonnais. Many of those companies later collapsed, and Afman left Credit Lyonnais in 1991. He subsequently became a consultant to International Creative Management, but that relationship ended last year.

At the Cannes Film Festival last May, Afman said he had centralized his operations in Amsterdam and was actively lining up off-balance-sheet financing for films and TV shows. But industry sources say they’ve heard little of him since then.

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Little Big Horn revisited: European audiovisual commissioner Joao de Deus Pinheiro must have felt like Custer when he ventured into the American Film Market, just one week after calling for the dismantling of United International Pictures, one of Hollywood’s biggest overseas distributors.

Pinheiro, who was quoted as saying that he opposed an antitrust waiver extension for UIP, struck a more conciliatory tone in a series of meetings and appearances tied to AFM. But some worry that the commissioner will go back on the offensive when he returns to Europe, where anti-Hollywood sentiment remains strong among many filmmakers and exhibitors.

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Stand-tall time: That’s how some Paramount executives are referring to Monday morning, when Viacom Chairman Sumner Redstone and Chief Executive Frank Biondi will visit Paramount Pictures for the first time since winning the takeover battle for its parent company. The Redstone-Biondi wake-up call comes at 9 a.m.