Company Town : Film Festival Serving as Trade Forum

With the world's biggest celebration of the cinematic art in full swing here, American and European entertainment representatives on Monday also confronted their differences over the art of commerce.

Both sides said progress was made in the transatlantic trade discussions sponsored by the American Film Marketing Assn. But the public spirit of cooperation was undercut by French Minister of Culture Jacques Toubon's calling for the dismantlement in Europe of United International Pictures, the overseas distributor for three Hollywood studios.

Toubon was quoted earlier Monday as saying UIP, owned by Universal Pictures, Paramount Pictures and Metro-Goldwyn-Mayer, should be abolished for violating free-market rules.

The distributor has been operating under a European antitrust waiver it is trying to get renewed. Jack Valenti, president of the Motion Picture Assn. of America, said that any move against UIP would disrupt the current talks.

"It would be distressful and cause real problems," Valenti said at the meeting. "But at this point, we expect a sane and reasonable conclusion."

While Monday's gathering brought together an unusually large contingent of American and European executives, talks have been going on casually since late last year, when the U.S. entertainment industry was excluded from the sweeping General Agreement on Tariffs and Trade by Europeans who accused Hollywood of monopolizing their theaters and airwaves.

The European Union is to take up a range of policy recommendations--including stringent quotas and increased taxes on American products--in Brussels next month, but no formal move is expected before fall. Meanwhile, groups such as the AFMA and the MPAA are battling to preserve their place in the vital European market.

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Colette Flesch of the European Union said the talks have already moved in a conciliatory direction. "There was no saber rattling," she said, adding that the biggest disagreement is over how to make a success of Europe's industry. Flesch also held her group apart from Toubon, noting that it has yet to take a formal position on the future of UIP.

AFMA President Jonas Rosenfeld agreed that the meeting was without rancor. He said that for once, no one had accused the United States of conspiring against European interests. Valenti repeated his post-GATT mantra that a strong Hollywood presence benefits Europe by drawing more people to local theaters.

Quietly observing the press conference was Bernard Miyet, who represented the hard-line French government in the GATT talks and, oddly, has since become a leading shuttle diplomat between Europe and the United States.

"Everyone wants to cool down the pressure now," he said Monday, neglecting to acknowledge Toubon's stand on UIP. That "kind of passion at GATT was useless for everyone."

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At the Carlton Hotel a few days ago, Fine Line Pictures gave an elegant luncheon, with director Roman Polanski and actors Sigourney Weaver and Ben Kingsley, to celebrate the North American acquisition of Polanski's "Death and the Maiden." Reporters and others dined on grilled lamb and potato mousse in a room festooned with provocative production photos by Helmut Newton.

Later that day, Polygram Filmed Entertainment flew in actors Meg Ryan and Kevin Kline to announce their participation in "Paris Match," which won't start production until fall. Polygram had already caused a big stir here with "The Adventures of Priscilla, Queen of the Desert," a story of drag queen showgirls in the Australian outback.

Beachfront posters promoting "Priscilla" say "Drag is the Drug," but any Cannes Film Festival regular knows that positive buzz is the drug here--both for driving sales to film distributors and building audience awareness. By that measure, Fine Line, Polygram and Miramax Films--which alone has four pictures in the official competition--are mainlining.

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"I view it as a really positive development," said Fine Line President Ira Deutchman. "What's the point of having a film festival if the only thing people focus on is the same films they focus on the rest of the year?"

While they have always been the key players at Cannes, small companies are generating even more media heat this year, partly because the major studios have all but cleared the playing field. The smaller companies also have deeper pockets since the industry shake-out that saw Castle Rock Entertainment and New Line Cinema--Fine Line's parent--sold to Ted Turner, Miramax acquired by Walt Disney Co. and Sony's purchase of the former Orion Classics.

Competing for the spotlight tonight are tiny Nest Entertainment, which has rented a castle in the hills above Cannes to promote its animated feature, "The Swan Princess," to 300 of its closest friends, and Castle Rock, giving a major event at the Hotel du Cap (which is so exclusive it's not even in Cannes). Miramax plans a party Friday at the Carlton Beach restaurant in honor of "Pulp Fiction."

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