Just when it seemed that John Heyman had succumbed to the lure of Hollywood, the veteran dealmaker has pulled off a financing coup protecting his status as an outsider.

Heyman’s $ 200 million joint venture with Berlin’s Studio Babelsberg, where such classics as “The Blue Angel” and “M” were filmed, could yield some 40 medium-budget films for the Island World distribution pipeline over the next seven years.

The deal gives Heyman a source of product that — in volume, at least — will match the company’s Hollywood output. It also adds a major element to Island World’s reconstruction, which has been going on for much of the past year.

Commitment renewed

Heyman’s commitment to Island World appeared to be on the wane six months ago , as the fledgling mini-major battled ballooning overheads and disappointing returns from its film and TV slate. But the former talent agent and film packager has new plans that embrace feature films, TV production and corporate videos, and educational and interactive programs for new media.

“Eventually, we will be the ultimate manufacturer and department store in the audiovisual business,” Heyman said.

German helmer Volker Schlondorff, Babelsberg’s head of development and production, will sit on the new venture’s board. “We hope to announce our first films this summer,” said Schlondorff, who will help select projects.

Art vs. commerce

Schlondorff, director of 1979’s “Tin Drum,” is not known for highly commercial films; Heyman himself favors the highbrow, entrusting the company’s more commercial projects to his Hollywood honcho, Eric Eisner, an attorney strong in business affairs but with no track record in picking films.

So it’s unclear just what kind of films will be made at the sprawling complex outside Berlin. Schlondorff insisted the pix will be for “worldwide release, including North America.” Heyman said they will “feature major international stars and be written and directed by leading filmmakers.”

Nevertheless, Heyman’s reputation is staked more on his talents as a film financier than as a producer. Heyman has provided more than $ 2 billion of production funds for the major studios over the last 20 years — as well as producing or co-producing about 30 films of his own. Recently, Island World produced “The Sandlot,” distributed by Fox. Heyman was a pioneer in the foreign sales business and was the first to raise production money from investors in Japan.

Focus shifts

Until the Babelsberg deal, production had focused entirely on Hollywood, where production chief Eisner is moving up the budget scale and working on such high-concept, mainstream projects as “Airheads” (witless rock band takes over radio station and becomes target of a SWAT siege), to be co-financed and distributed by Fox; and “Eddie” (frustrated basketball fan impresses new owner and is made coach of local NBA team).

The deal with Babelsberg, Europe’s biggest filmmaking facility, calls for setting up a joint venture, Babelsberg Intl. Film Production, between the studio and Island World.

BIFP would develop and produce a slate of movies to be made in part at the Babelsberg facility and distributed globally by Island World. The films, commercially oriented and shot in English, will be a mix of Babelsberg-developed scripts, Island World projects and pickups.

Heyman is convinced that Babelsberg, undergoing a $ 37.5 million refurbishment, will become the European production center.