Mandalay in talks with Par

Company would finance 15-20 pics per year

Peter Guber’s Mandalay Entertainment is in serious talks to move its base of operations to Paramount Pictures, according to sources.

The company, which has been based at Sony since 1994, when Guber stepped down as studio chief, reportedly would finance between 15 and 20 productions that Paramount would market and distribute over the next five years.

Mandalay had been in talks to make Warner Bros. its new home, but those negotiations reportedly broke down in the middle of last week.

Mandalay would be an attractive source of product for Paramount, which has an avowed policy of spreading risk through co-financing arrangements. Over the last year, the studio lost two key production partners in Rysher Entertainment and Spelling Films, which each shuttered their feature film activities.

Sweetening the pot is the fact that Guber also is in talks with Vancouver-based Lions Gate Entertainment, which through a combination of equity and bank financing reportedly would bring a sizable cash infusion to the company.

Mandalay currently has output deals with distributors in Australia, Italy, Korea, Spain, the U.K., Germany and Japan, which also receive an equity stake in the company’s product.

It’s not clear how the Paramount and Lions Gate deals would affect those relationships.

In addition to domestic distribution rights, Mandalay’s deal at Sony gave the studio international rights to roughly half of Mandalay’s features. Patrick Wachsberger’s Summit Entertainment handled foreign rights on the remaining pictures.

Mandalay has had a number of moderate successes under its Sony deal, including “Donnie Brasco” and “I Know What You Did Last Summer.” Box office duds included the company’s debut, “The Fan,” and the recently released “Desperate Measures.”

Neither Paramount nor Mandalay execs could be reached for comment.

(Dan Cox, Paul Karon and Benedict Carver contributed to this report.)

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