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August 30, 1987|WILLIAM K. KNOEDELSEDER Jr. | Times Staff Writer

Since he moved to the United States in 1972, Italian-born independent movie producer Dino De Laurentiis has managed to pull off a miracle that raises eyebrows even in miracle-prone Hollywood. He has produced one big-budget box-office bomb after another, yet has always managed to raise money to make more.

The list is a long and expensive one: "Orca" (1977), "Hurricane" (1979), "Flash Gordon" (1980), "Ragtime" (1981), "The Bounty" (1984), "Dune" (1984), "Red Sonja" (1985) and "Tai-pan" (1986), among others. All of those failed to return enough to their distributors to cover the cost of production.

In his native country, De Laurentiis--son of a Naples pasta maker--earned a reputation as the Cecil B. DeMille of Italy by producing high-budget costume dramas such as "The Bible," "Ulysses" and "Barbarella," as well as critically acclaimed films with Federico Fellini including "La Strada" and "Nights of Cabiria."

To be sure, there have been occasional critical or commercial successes in the United States, too: "Serpico" (1974), "Death Wish" (1974), "Three Days of the Condor" (1975) and "King Kong" (1976). But the latter movie--with a reported $75 million in film rentals against production costs of $23 million--ranks as the only bona fide blockbuster in De Laurentiis' 40-year, 500-movie career. A $55-million disaster (including prints and advertising) such as "Dune" more than cancels out the profits from the moderately successful "Conan the Barbarian" and its sequel, "Conan the Destroyer."

The record stands as a testament to the 68-year-old producer's reputation as an indefatigable and persuasive promoter, even if he has not been able consistently to produce movies that appeal to American audiences. The long-standing imbalance between hits and flops never seemed to impede his ability to do business in Hollywood--until recently, that is.

Beginning in 1985, De Laurentiis launched an ambitious plan to establish his Beverly Hills-based company, De Laurentiis Entertainment Group, as a major player in Hollywood. He bought a movie distribution company, Embassy Pictures, and a film library. Then he added a 32-acre movie studio in Wilmington, N.C. Next, he went public, raising a total of $240 million from various banks and stock offerings. Finally, he pronounced it all a boffo success.

"In a remarkably short time, DEG has become a major force in the motion picture industry, competitive with the other major studios," he said in a letter to DEG shareholders printed in the company's 1986 annual report. Unfortunately, like many De Laurentiis movie productions, DEG's performance has not lived up to its publicity. In the 15 months since it went public, the company has lost a cumulative $16.5 million--losses brought on by a string of box office disappointments. DEG's stock price has plummeted to $5 a share after trading as high as $17.75. It closed Friday at $5.125.

DEG has disclosed that, unless it improves its balance sheet by November, the company's banks could take possession of its film library, which includes such classics as "The Graduate," "The Lion in Winter" and "Carnal Knowledge."

With the help of two investment banking firms--Paine Webber and Bear Stearns--DEG is scrambling to raise additional capital. This time, however, the money might be harder to find, since both Hollywood and Wall Street seem to have soured on DEG and its chairman.

"They are suffering from a tremendous cash crunch--you don't hire two investment bankers because you're in great shape," one financial analyst said. "They need something to regain the confidence of the financial community, not even a big hit, just (movies) out there to start doing business again--nothing more than that."

Others are less charitable. "De Laurentiis took the public's money to make hit pictures and they all failed," said one prominent Hollywood producer who declined to identified. "He's proven that he doesn't know how to make a hit movie."

"You have to consider that DEG's problems are occurring at a time when box office returns are booming," said Howard Turetsky, an analyst for the New York investment firm of Brean Murray Foster. "This might turn out to be a record year. If (DEG) can't make it now, when will they?"

Another analyst said: "Ever since he went public, the numbers have been awful--case closed."

Neither De Laurentiis nor any of the company's top executives agreed to be interviewed for this article. A DEG spokesman cited ongoing discussions with potential investors as the reason for the company's reticence to talk about the situation.

Among the entertainment companies widely believed to be interested in acquiring at least a share of DEG are independent film maker Guber-Peters Co., 20th Century Fox, Paramount Pictures and Home Box Office. None has commented publicly, but intense negotiations are known to be going on.

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