Company Town : Dream Team May Get New Player: Bill Gates

Microsoft Chairman Bill Gates is in advanced discussions about investing in the fledgling Hollywood studio headed by Jeffrey Katzenberg, Steven Spielberg and David Geffen, knowledgeable sources said Thursday.

The precise nature of Gates’ possible involvement in the venture is unclear. Sources say he would probably serve as both an investor and technology adviser. Interestingly, they say Gates has also let it be known that he harbors directing ambitions.

Gates’ name first surfaced in connection with the studio in October, when Katzenberg, Spielberg and Geffen announced they were joining forces. At the time, they shot down reports that Gates and others were involved. On Thursday, all of the parties declined to comment.

Sources, who have called the previous reports of Gates’ possible involvement premature, say the talks have recently taken on a more serious cast. But they also warn that Gates has been known to back away from promising-looking discussions before.

Gates, 38, has the resources to play at any level in Hollywood. He ranks at the top of the latest Forbes list of the 400 richest individuals, with a reported net worth of $9.35 billion. His wealth is derived from the runaway success of Redmond, Wash.-based Microsoft, the world’s largest computer software company, which he started with classmate Paul G. Allen in 1975.

Gates is said to be intrigued by Hollywood, and he has been linked in the past to discussions with Creative Artists Agency Chairman and industry matchmaker Michael S. Ovitz.

The nature of Gates’ relationship to the studio partners is also unclear.

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Gates, Ovitz, Katzenberg and Geffen know one another, and all were at investment banker Herbert Allen Jr.’s annual Sun Valley retreat last summer. Katzenberg, Spielberg and Geffen are said to be seeking as much as $2 billion in backing for their unnamed studio.

Meanwhile, their company is gradually taking shape.

On Monday they announced a $200-million joint venture with Capital Cities/ABC to develop television programs. And on Wednesday they announced that Helene Hahn, Katzenberg’s longtime head of business affairs when he was Disney studio chairman, will oversee all business and legal affairs for the new studio. The three are also said to be in advanced negotiations to take over space in Playa del Rey.

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Phoenix Pictures, the entertainment company being formed by veteran Hollywood executives Mike Medavoy, Peter Hoffman and Arnold Messer, appears to be close to taking flight.

The Phoenix partners have spent the past several months globe-trotting in search of investor backing.

Hoffman declined to comment on reports that the company expects to set out with $75 million to $100 million in seed money, but he did say things are “very close” to coming together.

Sony Pictures Entertainment, Medavoy’s old employer, is said to be one likely backer as a co-financier and/or distributor of movies produced by Phoenix, but sources said there are separate discussions with other studios. Medavoy headed Sony’s TriStar Pictures unit until January.

The Phoenix partners are also in talks with Onex Corp., a Toronto-based company with $1.4 billion in assets and interests in everything from auto parts to airline catering.

Hoffman, a former Carolco Pictures executive, heads a production, packaging and consulting company called CineVision. Medavoy supervised the production of Oscar-winning films such as “Platoon” and “Dances With Wolves” at Orion Pictures before joining TriStar. Messer was formerly with Columbia/TriStar International.

Medavoy said it’s too soon to discuss the company’s plans. But sources say Phoenix will be involved in areas outside film production, including foreign financing deals.

The partners’ fund-raising crusade has brought them in contact with everyone from Southeast Asian investors to British conglomerates. In the United States, the company was said to be in serious discussions with super-investor Kirk Kerkorian earlier this year.

Phoenix declined to comment on that report. But a spokesman for Kerkorian confirmed that the discussions took place. Alex Yemenidjian of Kerkorian’s Tracinda Corp. said Kerkorian has “a very high regard” for Medavoy but ultimately decided to invest elsewhere.

“To say we got very close and pulled out (would be) a mischaracterization,” Yemenidjian said.

“It sounds like we looked at it and didn’t like it,” he said. “We entered into discussions to consider it. During those discussions other things came up . . . other investment opportunities that prevented us from going into that transaction. We just got busy with other things.”

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Walt Disney Studios got off to an early start in the Academy Awards derby Monday by sending out a glossy brochure that promotes 13 of its films for Oscar consideration.

In deference to the talent, studios usually go to great lengths to avoid the appearance of favoring certain of their films over others. But the number of screenings scheduled for each film offers a good indicator of where Disney stands. “The Lion King,” the critically acclaimed hit, has the most showings, at six. Next is “Quiz Show,” a bigger success with critics than with moviegoers, with five. The quirky “Ed Wood” gets four. And the troubled “I Love Trouble” has only one.

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Inside Hollywood

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Times staff writer Adam S. Bauman contributed to this report.