Dino De Laurentiis, the movie producer who fell from grace with Wall Street, announced Friday that he is discussing with management his possible resignation from his $850,000-a-year post as chairman and chief executive of financially troubled De Laurentiis Entertainment Group.
The 68-year-old producer said the discussions include his return to independent movie production, possibly in association with DEG. He also said in the prepared statement that he has "suggested that the company consider changing its name to better reflect its status as a mainstream public entertainment entity."
De Laurentiis was not available for comment Friday. However, James A. Parsons, DEG's executive vice president and chief financial officer, said the producer "has not resigned. We considered the discussions a material event, and because we are a public company we felt it was our obligation to put out the statement," Parsons said. He would not comment further.
The announcement of De Laurentiis' possible resignation was not unexpected in the film or financial communities. In the 17 months since it went public, DEG has been plagued by a string of box-office disappointments, a loss of confidence in the investment community and a rash of defections from its executive ranks, including De Laurentiis' daughter Raffaella, who resigned as president of production in July.
The company reported losses of $15.5 million for the first quarter of 1987. Its stock has plummeted to $2.50 a share, off 25 cents Friday, after trading as high as $17.75 in mid-1986. Having already raised and spent $240 million from various banks and stock offerings, the company is currently scrambling to come up with another $120 million in badly needed capital.
"We're still negotiating with a number of entities for additional financing, but it's premature to say we have a deal," said one DEG executive who asked not to be identified.
Despite De Laurentiis' assertion that it was his "sole decision" to initiate the discussions, speculation in Hollywood is that he's being forced out, either by DEG's current bankers or at the insistence of prospective new investors.
"There's just no confidence in him," said one movie executive who recently left the company. "The feeling is that the man just can't do it anymore. They need leadership, there's nobody at the helm and the company has been careening all over the place."
However, one Wall Street analyst said De Laurentiis was leaving voluntarily because he realized that "it was the only thing that makes any sense for the company. They need money to pay bills and finish pictures and market pictures that are already completed and awaiting release. That money is going to be very hard to come by in the current market, and I think they realized the only way they would be able to raise it was if he stepped down."
In addition, the analyst said, De Laurentiis himself wants to get away from the pressure and negative publicity of heading a troubled company. "He's so hurt by the fact that his pictures have not done well in this country. I think he's probably devastated that he hasn't been able to make a go of it here."
"I'm sorry to see that happen to anyone, but it's no surprise," said one Hollywood producer who recently had a movie released by DEG. "He didn't run the company well, pure and simple. He's another executive who didn't do his job--he made bad movies."
It wasn't always that way. The son of a Naples pasta manufacturer, De Laurentiis earned a reputation in his native country as the Italian Cecil B. DeMille by producing big-budget extravaganzas such as "The Bible," "Ulysses" and "Barbarella," as well as critically acclaimed films with Federico Fellini including "La Strada" and "Nights of Cabria."
When he first came to the United States in the early 1970s, De Laurentiis had string of successes including "Serpico" and "Death Wish" in 1974, "Three Days of the Condor" in 1975 and "King Kong" in 1976.
Since then, however, the ink has been mostly red. None of the 16 movies released by DEG since it went public in May, 1986, has turned a profit at the American box office. Although two DEG films--"Crimes of the Heart" and "Blue Velvet"--were critically acclaimed and earned a number of Academy Award nominations in 1986, the De Laurentiis name has become synonymous in recent years with big-budget box-office bombs like "Dune," "Tai Pan" and "King Kong Lives."
DEG executives said Friday that no decision has been made on whether to change the name of the company. One former executive noted the irony that the company was built and millions of dollars were raised solely on the strength of the De Laurentiis name. Now it appears that the name may have become a liability.
"But Dino's always going to survive," the former executive said. "The same people who invested in his company and all his movies over the years will probably be willing to invest in his new films as an independent producer."