THE STORY ABOUT THE CONFLICT involving an Endeavor agent and two studios has become a sort of minor legend around town. It unfolds roughly like this:The agent offered a project to a particular studio and mentioned a price range. The submission was not exclusive, he pointed out, so a prompt response would be appreciated. He then went to a second studio with the same project. The first studio replied, stating it wanted to make an offer within that price range. When the agent dutifully called the second studio to relay that interest, the CEO put him on hold and plugged in the head of the first studio. Suddenly the agent found himself on the speakerphone with two supposedly competing companies, both of them discussing a possible price. Outraged, the agent signed off, telling both he’d take the project elsewhere. The story has gained a certain infamy because it points up an issue no one usually talks about publicly. To wit: Have the studios become too buddy-buddy? Has it gotten to the point where that other “C” word — namely, collusion — is coming into play? Talk to agents and talent off the record and you quickly collect the sort of war stories that raise red flags. Whether true or not, a lot of people in town believe the studios and networks are sharing the sort of information that normally should be considered secret. This relates to actor salaries, script prices, director deals and the like. Ask studio executives about this and you get a blank stare. Proprietary information is not shared, they assert — and this may be true. On the other hand, the Hollywood community has become a lot tighter with each passing year. LOOK AT THE MOVIES IN PRODUCTION and you find a lengthy list of co-ventures between the majors. The mega-companies on the surface seem to be competitors, but they’re in business together all around the world. Witness the fact that Sony, Warners, Paramount and Universal are equity partners in pay TV enterprises like HBO Asia and HBO Ole. Studios often share film and video distribution arrangements in different territories around the world, as do Sony and Disney in Mexico. And Sony and News Corp. are partners in satellite platform SkyPerfect in Japan. Even in the U.S., representatives of four of the majors have been meeting quietly to form a nonprofit company that would finance the accelerated introduction of digital technology in local multiplexes. Within the U.S., the majors play ball with one another on labor problems, censorship, piracy and other issues involving Washington regulators. Meetings take place constantly at all levels. SOME OF THE PARANOIA about potential collusion inevitably stems from the fact that so few players remain at the table. What once passed for a music industry today basically consists of Vivendi-Universal, AOL Time Warner, Sony, Bertelsmann and the EMI Group. A generation ago, the spectrum of theatrical film companies included CBS Films, ABC Films, Embassy and a cluster of well-funded indies; today that list has shrunk to a fragile few. During my years as a studio executive, there were times when rival studios would sniff around to ask, are you really offering X dollars to Redford, or Y dollars to Newman? Customarily, they would elicit only a vague response, if any at all. “It’s my recollection that we simply did not share information at that level,” recalls one major player who headed a studio 15 years ago. “We steered clear of anything resembling collusion.” Talk to top agents today, however, and a different story emerges. “It doesn’t happen with the top rung of stars or with the A material,” says the head of one talent agency. “But when you get to the next layer down, it’s my experience that numbers are shopped around, that everyone seems to find out everything. It’s an absolute bitch to do any creative dealmaking.” While the studios and networks feel the dealmaking process has become “creative” enough, they nonetheless may become a little more scrupulous about their use of the speakerphone.