AFTER LAYING OFF A FEW lower-end execs and managers, Industry Entertainment is departing its production deal at New Line Cinema at the end of March and is in talks with another studio to produce pics with budgets of $40 million or more, though the company still plans to do smaller projects as well.

Plagued by rumors that it was abandoning its production unit, Industry, producer of “Quills,” “The Yards” and “Requiem for a Dream,” is also in talks with an international financier to back its slate.

Insiders say Industry has signed a deal, but Industry co-chair Nick Wechsler doesn’t want to spook it, saying it is only in negotiations.

Larry Weber, chairman of Interpublic Group, assures Daily Variety that its equity interest in Industry is intact. He adds, however, that the company is free to look for additional financing.

Industry is responsible for such pics this year as “Antitrust” from MGM, “Invisible Circus” from Fine Line and “15 Minutes” from New Line. It also has 60 projects in development under Wechsler.

DOMESTIC SQUABBLE IN ‘HOUSE': Lions Gate Films has more or less dumped last year’s Sundance acquisition “Two Family House,” opening the pic in October and then quickly pulling out because it didn’t draw enough initial cash at the B.O.

The New York-based producers were miffed, especially after they ponied up the cost of full-page ads in the New York Times and the L.A. Times.

Now, producers Alan Klingenstein and Bernie DeLeo are fronting another effort sans Lions Gate, which just relocated to L.A. from Gotham.

Pic was a success with critics, so they’re mounting an Oscar campaign, sending videotapes and scripts to 360 members of Oscar’s writing branch.

Lions Gate exec Tom Ortenberg was excited about “House” when the company bought it at Sundance, but has since soured on it.

“We loved the movie and spent a lot of money on it,” he said. “Unfortunately, it did not connect with audiences.”

Klingenstein and DeLeo see it differently.

Pic was just nominated for an Independent Spirit Award for scribe-helmer Raymond DeFelitta.

DEATH OF DOT-COMS AT SUNDANCE: As Artisan Entertainment emails its dot-com drama “Startup.com” — about high-flying Internet companies that crash and burn — into competition in the Sundance Film Festival, the actual dot-com onslaught at last year’s fest has been reduced to a trickle this year.

At Sundance, some of the Netcos that took space as sponsors and threw wild parties last year have crashed and burned, too. (There were, however, still 300 entries for this year’s inaugural online film festival.)

They’ve been displaced by Diesel Jeans, Zenith and Coca-Cola.

“It’s a real shift,” said Sundance spokesman R.J. Millard. “There are fewer dollars being spent on their presence at the festival. It’s also a far cry from what happened in Cannes last year.”

True enough. Cannes was dot-com-centric last year, with keychains, hats and promotional material at every turn.

In any event, Sundance may actually be more palatable this year without the dot-com insanity.

PARAMOUNT CLASS?: For the first time, Paramount Pictures will have the opening night film at Sundance with Christine Lahti’s “My First Mister,” distribbed by Par Classics.

The question is: What is the company going to do about it?

Par Classics co-prexies Ruth Vitale and David Dinerstein are entering the last year in their four-year deal with the studio’s specialized arm.

The pair has had a phenomenal run over the last nine months, bathing in the hit juice of such pics as “Sunshine,” “You Can Count on Me,” “The Virgin Suicides” and even “Girl on the Bridge,” as well as the buzz on upcoming pic “The Gift.”

Sources say the pair is likely to reup, but at what cost?

The division is overseen by a committee, led by Viacom Entertainment Group chairman Jonathan Dolgen. Dolgen similarly oversaw the Sony Classics team and watched it develop into the indie powerhouse that it is.

Now, Dinerstein and Vitale have created a powerhouse of their own. And given the tiny overhead that it takes to maintain the minimal staff, Par should be embracing them.

TALK ON THE ‘STREET': A&E is hitting legal home runs with Sidney Lumet’s new series “100 Centre Street,” if you care about what the legal community has to say.

The law-and-order drama was lauded by several criminal court judges who turned out for its Gotham premiere Wednesday night.

Criminal Court justice John Walsh, who some say was the model for Alan Arkin’s series character, says the skein was dead-on in its depiction of Arkin as a justice tormented by a decision to release a kid back to the streets only to have him murder a cop.

“The way he held his head in his hands was dead on the money,” Walsh said.

He added that the rest of the series was about 80% realistic.

Walsh, along with fellow justices Theresa Walker and Neil Ross, all questioned the notion that a cop could be arrested and show up in court in full uniform with his badge, as one character did after he was arrested for violating a restraining order.

“He’d never get to keep his badge,” Ross said.

NYPD bomb technician Paul S. Yurkiw added that the series wasn’t as well done as his favorite, “Law and Order,” but that it was probably more realistic.

They all agreed that the media, as depicted in the series, was indeed a nightmare.

“You guys never make it easy,” said one.

We never try.

WRITING AIN’T EASY: One note on the sudden vogueish interest in films about writers.

Both “Quills” and “Before Night Falls” chronicle outsiders who scribble on anything from matchbooks to prison walls using finely hued dipping ink, stubbed pencils, blood or feces. And they create masterpieces.

While poetically depicting a writer’s determination to get his message across no matter what it takes, the scenes in these films belie the fact that most good writing is dependent on rewriting. We didn’t see the Marquis de Sade cracking open another vein to do a rewrite on the cell floor. Nor do we see Reinaldo Arenas taking another stab at his novel in prison on toilet paper. Both films are stellar in their own way, but contrary to what Hollywood would have us believe, writing just ain’t that simple.

(If you have information or just gripes, please contact Dan Cox at dcox@cahners.com.)

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