×

LONDON — Sony Pictures Entertainment is in talks to take a 40% stake in DNA Films, the lottery-backed production franchise run by Andrew Macdonald and Duncan Kenworthy.

Potential deal is one of several being explored by DNA to transform its production biz, with two years of its six-year lottery franchise left to run.

DNA has held discussions with just about every possible player in the U.K. film business. Sources at the company said the Sony pact is “one of a few” under equal consideration.

DNA has £16 million ($23 million) left from a $43 million pool of lottery coin awarded in 1998 to co-finance the production of about 16 British movies over six years.

Company has a worldwide distribution deal with Universal Pictures. But DNA’s relationship with U has cooled following the disappointing reception to its first four films — “Strictly Sinatra,” “Beautiful Creatures,” “The Final Curtain” and “The Parole Officer.”

Since then, DNA has made the Danny Boyle pic “28 Days Later” with Fox, and Damien O’Donnell’s “Heartlands” with Miramax. The U deal has effectively lapsed.

The future of the franchise is also complicated by the fact that Kenworthy, best known as the producer of “Four Weddings and a Funeral” and “Notting Hill,” will be devoting much of the next year to producing the next Richard Curtis movie, “Love Actually,” for Working Title. Although DNA will receive a credit on the pic, it does not have a financial stake in it.

Macdonald, who has been leading talks with Sony and other possible partners, has been looking to beef up DNA’s exec roster to compensate for Kenworthy’s absence. An attempt to lure away Miramax U.K. production chief Allon Reich failed.

The Film Council recently asked all three franchises — the others are Pathe Pictures and the Film Consortium — to present business plans showing how they will survive when their lotto coin runs out. The Film Council may restrict the franchises’ access to the remainder of the coin if they cannot map out a convincing future for themselves.

Sony has long been exploring options to enter the U.K. production sector. It previously discussed a three-way deal with Fragile Films and Grosvenor Park.

It has a first-look deal with Guy Ritchie and Matthew Vaughan’s Ska Films and fully financed both “Snatch” and the upcoming “Swept Away.” It is also bankrolling a planned movie by U.K. pop combo S Club.