Ex-Carolco Chief Goes to Paramount

Mario F. Kassar, the maverick producer of mega-budget movies who resigned as chairman of Carolco Pictures in November when the ailing company filed for bankruptcy, has landed at Paramount Pictures with a three-year deal to produce movies, the studio announced Wednesday.

The deal was described by sources as a conventional “first-look” arrangement in which Paramount has first shot at films Kassar brings to the studio. If Paramount rejects any projects, they said, Kassar can take them to another studio or use a discretionary fund that Paramount will supply him to develop the films further before resubmitting them.

At Carolco, Kassar produced many of Hollywood’s biggest-budget pictures, some of which still rank among the top grossers ever, including “Terminator 2: Judgment Day,” “Basic Instinct” and the “Rambo” series.

But the company was also hit hard by some expensive bombs, including “Chaplin” and the current “Cutthroat Island,” the last film for Carolco and one that opened poorly at the box office over the holidays. Carolco’s excessive spending, combined with losses on some films and a high debt load, were the main reasons the Los Angeles company sought refuge under Chapter 11 of the U.S. Bankruptcy Code.

Sources said the main competition for Kassar’s services was Twentieth Century Fox, which already has a tentative agreement to buy most of Carolco’s assets for $50 million. Sources said that Fox, however, wanted a more exclusive arrangement with Kassar than Paramount required. In a brief interview, Kassar confirmed that one of the main reasons he chose Paramount was that its deal would allow him greater flexibility.

Studio sources said financing arrangements may vary from picture to picture. Paramount may finance all of a given picture, use outside investors or sell foreign rights to the Kassar films in ad vance. Paramount has been increasingly sought to share the steep financial risks inherent in making movies.

At Carolco, Kassar was one of the industry’s pioneers in selling overseas rights to raise funds to make films. Paramount Pictures Chairman Sherry Lansing said one of the things Kassar brings to the studio is the “creative financial arrangements to the films he makes.”

Kassar plans to be based on Paramount’s lot, with the studio covering his overhead. Sources estimated that Paramount has promised to provide at least $4 million annually to finance Kassar’s operation, including about $2 million to cover his salary. The arrangement is a unique one for Kassar, who has never worked under the tighter reins of a studio system.

Kassar continues as a consultant to Carolco under contract and is required to help promote the foreign theatrical release of “Cutthroat Island.” According to documents filed with the Securities and Exchange Commission, Kassar is schedule to receive a $250,000 payment next month from Carolco. He received a payment of $588,947 when he left.

Kassar founded Carolco in 1976 with then-partner Andrew Vajna, now head of Cinergi Pictures. Carolco is winding down its operations while under the protection of Bankruptcy Court, where a judge must eventually approve the sale of its assets.

Investors in Carolco bonds have challenged Fox’s offer and have filed papers seeking additional details. Other rumored bidders, notably France’s Canal Plus, are said to be interested in possibly outbidding Fox, but none has stepped forward with a formal offer.