Steve James and Peter Gilbert, who were behind the docu “Hoop Dreams,” will next focus on the duo credited with pioneering rap music: They’ve signed with Mandalay Entertainment to collaborate on a biopic of Grandmaster Flash and Melle Mel.

James will write and direct and Gilbert will serve as director of photography and produce with Avatar partners Emilio Estevez and Jonathan Brandstein.

Aside from a six-figure against seven-figure deal the “Hoop Dreamers” will get for their services, Mandalay has tied up the life rights of Flash and Melle, and sealed music rights from Sugar Hill Records owners Sylvia, James and Joey Robinson.

The distinctive hip-hop sound is credited to Flash, who was a vocational student repairing a turntable when he accidentally discovered that scratching the needle across a record turned a record player into a musical instrument.

“Flash was the pioneer DJ who invented scratching and the beat box that isolated ‘breaks’ in songs,” Brandstein said. “Mel was the lead rapper in Grandmaster Flash and the Furious Five, and they would tap into street lights to power their turntables to perform in city parks. They were kids who had no money, who used what they had — records and turntables — to create what started as rap and became a culture.”

They scored million-selling records like “The Message” and “White Line,” which changed the face of rap by focusing on gritty ghetto issues like poverty and drugs. Mel still performs while Flash will provide the music for Chris Rock’s new HBO show.

James said he and Gilbert liked the characters, and how their friendship evolved as they became stars: “They didn’t set out to do this with an idea to become rich and famous. It started as an underground musical movement which people thought would never be recorded. … Flash was this nerdy guy from the city who did this because it filled a need for him that he had no idea would appeal to others.”

There’s a clear parallel to the makers of “Hoop Dreams,” who filmed two inner-city high schoolers for years, just hoping for a PBS showing. Now, they’ll rewrite Joe Dougherty’s first draft of the hip-hop history as they continue scripting the Connie Hawkins biopic “Foul” at DreamWorks for Gary David Goldberg to produce. Jonathan Baruch will exec produce, with Mandalay’s Jason Blumenthal, Ori Marmur and Darrell Walker making the deals.

James and Gilbert are managed by Dave Phillips, repped by Endeavor and attorney John Sloss, while attorney Peter Richards repped Avatar.

FROM ‘HULK’ TO ‘ROCKET’: While it’s not as dramatic as the transformation of Bruce Banner into the Incredible Hulk, the Universal adaptation of that Marvel Comics hero is being seriously reconstructed. “Jumanji” director Joe Johnston, who had recently agreed to helm the film once a script was finished by Jonathan Hensleigh, is on the verge of ankling “Hulk” and moving to U’s “Rocket Boys.”

Though a much smaller premise than a large green guy pelted by gamma rays, Johnston liked a script by Lewis Colick (“Ghosts of Mississippi”). It’s a coming-of-age story about small-town kids spurred on by the space race in the ’50s. While their parents expect their offspring to follow them into the coal mines, the kids have their heads in the skies, trying to build their own rocket ship. Johnston was so moved he’s talking about making the pic his next film.

Meanwhile, “Hulk” is still moving forward, with Hensleigh turning in his script shortly. U execs will then sort out the director situation, hoping to get that pic in production soon.

WHY MEL’S ‘LETHAL’ CHANGE OF HEART? After years of publicly declaring he was done with the “Lethal Weapon” franchise, why would Mel Gibson suddenly change his mind as he did last week (Daily Variety, July 3) and agree to reconsider? While it’s partly the big bucks, and partly to help Warner Bros., Dick Donner, Joel Silver and Danny Glover, Dish hears another key was WB’s willingness to part with domestic rights on the Gibson-starrer “Parker” to Paramount to fulfill Gibson’s pic commitment with that studio.

That gesture kickstarted talks on “Lethal Weapon 4,” which will start in January if Brian Helgeland nails the script. WB denies any suggestion of horsetrading, but Gibson was in a jam with Par and suggested the “Parker” deal. Whether or not Paramount accepts that pic, it’s looking like “Lethal 4″ will now get done.

WB maintains there’s no connection, per a spokeswoman: “We’ve had a relationship with Mel since ‘Mad Max’ and giving up half a movie is nothing compared to the long-term value of the relationship.” With that kind of loyalty — plus the prospect of a record-breaking payday — how could Gibson say no?

FREEMAN LANDS TWO:

Screenwriter/producer David S. Freeman set up two projects with Dodi Fayed’s Sony-based Allied Stars. With Robert Kosberg, Freeman created “The Hunt,” a time-travel comedy that he’ll produce with Fayed and Kosberg. He’s also set up “Secret Fire,” a thriller about a government worker who uncovers a covert group working within U.S. Intelligence. Fayed and Freeman are producing. While Freeman scripted “The Hunt,” he’s hunting for a scribe on “Secret Fire.”

Freeman, who along with Lars Davidson and Bo Zenga came up with the pitch “The ‘It’ Girl” that recently sold to Paramount, is repped by William Morris’ Ramses IsHak.

DISHINGS:

Tobey Maguire, who just completed Gary Ross’s “Pleasantville” for New Line, is in line for a lead in MGM’s “The Mod Squad,” while he mulls offers for Fox Searchlight’s “Slums of Beverly Hills,” “Scream 2″ and a pic by John Waters. He’s also up for a cameo in Terry Gilliam’s “Fear and Loathing in Las Vegas.” Maguire will next be seen in Ang Lee’s “The Ice Storm” and Woody Allen’s “Deconstructing Harry.” He’s repped by Gersh’s Leslie Siebert and managed by Eric Kranzler of More-Medavoy.

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