Small Firm’s Star Is Rising in Hollywood : Entertainment: With projects underway, things are looking up for Harvey Bibicoff and The Producers Entertainment Group.

It’s been a good summer for The Producers Entertainment Group.

The Beverly Hills-based company made the box office hit “What’s Love Got to Do With It” for Disney. It is also behind the much talked about “Attica” upcoming on HBO, and it is producing the sitcom “Dave’s World” for CBS, which advertisers are already betting will be one of the top-rated fall shows.

In a business where prospects rise and fall at the box office or with the Nielsen ratings, TPEG’s are looking up. “Not long ago, nobody would return our calls,” said Chairman Harvey Bibicoff. “Now everybody returns our calls.”

If people weren’t returning them before, it might be because they remember Bibicoff’s previous business ventures. The entrepreneur, who heads a complicated web of intertwining public companies, has a spotty track record.

Bibicoff was one of the founding principals in Discovery Associates, a “blind pool” that bought the Carson-based Leo’s Stereo retail chain in 1986 for about $30 million.

At the time, Bibicoff boldly predicted that Leo’s would become “a billion-dollar company in five years.” Nine months later, after Leo’s racked up losses due to faulty merchandise that had to returned, Bibicoff lost control of Discovery when it defaulted on a loan used to help buy the retail chain. Leo’s was sold back to its original owners and subsequently filed for federal Bankruptcy Court protection.

Bibicoff was also fined $2,000 by the National Assn. of Security Dealers in 1973, NASD officials confirmed. Bibicoff said the fine was for “technical violations.”

More recently, Bibicoff’s holding company, Ventura Entertainment Group, was ensnarled in the SEC’s investigation of Stratton Oakmont Inc. The penny stock broker, which underwrote Ventura’s second stock offering, has been described as a “boiler room” operation by the SEC, which filed a civil complaint last year against the firm alleging stock manipulation.

Stratton Oakmont has denied the charges, and Ventura, in an SEC filing, said the action will not have any effect on the company.

“A lot of people will forgive several bad attempts if you have one or two home runs,” said Crowell Weedon’s Mark Matheson, who has been highly critical of Bibicoff in the past.

In a 1990 suit that was later settled out of court, Bibicoff once charged that Matheson was part of a plot among short players to drive down the stock price of one of his companies, according to reports at the time. The defendants called the allegations ludicrous and false.

Bibicoff believes that incidents that occurred in the past are irrelevant to what he says are the rising fortunes of TPEG, which is 38% owned by his Ventura Entertainment. Bibicoff himself owns 10.9% of Ventura Entertainment and 6.5% of TPEG.

In addition, Ventura owns 43% of TV commercial producer Harmony Holdings Inc., in which Bibicoff also holds a 5.5% stake. He is spinning off the TPEG and Harmony stakes from Ventura.

Bibicoff became TPEG’s chief executive when one of his partners, former Columbia Pictures and New World executive Jonathan Axelrod, took over production of “Dave’s World.”

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That move was not welcomed by New York investor Walter Scheuer, who is TPEG’s largest outside independent stockholder. “I frankly don’t regard the management changes as a plus,” Scheuer said. “I liked that young man Jonathan. I thought he had a lot of good ideas.”

Bibicoff’s other partners are TV movie producer Irwin Meyer and veteran talent managers Barry Krost and Doug Chapin. Bibicoff oversees the business side while the others develop and produce film and TV projects.

Meyer has also had problems. The former co-producer of the Broadway hit “Annie” pleaded guilty to filing false tax returns and in 1982 was sentenced to six months in jail, of which he served four, according to newspaper reports at the time.

Meyer denies wrongdoing, saying his lawyer urged the guilty plea.

According to Bibicoff, TPEG has a fail-safe approach. It develops TV and film projects, helps assemble the writing teams, then hands them to the networks or studios, which pay the production costs in return for the rights.

On “Dave’s World,” for example, a series inspired by the books by syndicated Miami Herald humorist Dave Barry, CBS foots the production cost and owns 85% of the show. TPEG produces the series for a fee of $25,000 per episode and owns 15% of the profits from future syndication.

TPEG also received a $350,000 production fee for “What’s Love Got to Do With It,” plus 40% of the so-called net profits, which Bibicoff says kick in when the movie passes the $40-million mark at the box office. So far it has taken in about $37 million.

Independent producers typically must borrow money or find a studio to finance their projects. “We avoid risk by not putting up any of our own money,” Bibicoff explained.

In fact, TPEG doesn’t have any money to put up even it wanted to. Its business plan may insulate TPEG from any major bombs, but it also shuts the company off from a big payday if it scores a hit--one of the few rewards in the high-risk entertainment business.

That doesn’t bother Bibicoff. “So we get a smaller share in four projects rather than a bigger share in just one project. . . . Even a little is a lot for a company this size.”

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Of course, the chances of having one successful movie or TV show are highly remote, let alone a second, third or fourth. In TV it is unusual for even the major studios with their stables of top producers and writers to have more than one hit every few years.

“Dave’s World” would have to stay on CBS’ schedule for at least four years before it qualified for syndication, and even then its value could not be predicted. But the series is at least off to a good start for its Sept. 20 premiere.

CBS executives are betting “Dave’s World” will be one of the big hits of the new fall season. The network has given the series the coveted Monday slot between “Evening Shade” and “Murphy Brown.”

“This was the first project they brought to me,” said Andy Hill, executive vice president of CBS Entertainment. “It’s like having an unknown guy come out of the stands and pitching a shutout game.”

Even by the boutique standards of independent production, TPEG is still a small enterprise.

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For its 1992 fiscal year, the company had net income of $252,000 on revenue of $4 million. In the most recent nine months, TPEG posted an $881,000 loss on nearly $3 million in revenue. Bibicoff says TPEG will report a loss for fiscal 1993, but will be profitable again in fiscal ’94.

The losses are due partly to increased operating expenses from TPEG’s merger with Krost/Chapin Management, whose clients include actress JoBeth Williams and TV director James Widdoes.

Nonetheless, the shaky financial performance of TPEG has not prevented a second public offering, which raised an additional $4.8 million earlier this year.

Analysts say Bibicoff’s uncanny ability to raise capital, despite past problems, is due to his contacts in the financial community.

The lawyer-trained Bibicoff has been a financial consultant since the early 1970s, when he and Meyer had their own investment firm, First Consolidated Corp. Among their early deals: the merger of Creative Management and General Artists, which formed the powerhouse agency ICM.

Ventura Entertainment was formed by Bibicoff and Meyer in 1988 to produce low-budget TV movies. From 1989 to 1991, the company reported cumulative losses of $9.7 million. Revenue nearly doubled to $22.9 million in 1992, and Ventura reported a modest profit of $430,000. About 33% of Ventura’s revenue came from subsidiary Harmony Holdings.

But in the nine months ended March 31, Ventura’s revenue plunged to $220,273 and the company had a $1.7-million loss. Ventura said that was because its stakes in Harmony and TPEG both fell below 50%, and the investments were now carried on an equity basis.

Another operating company Ventura recently acquired that arranges product placements and sports sponsorships should bring Ventura $13 million in revenue this year, Bibicoff said.

As for Ventura, “our business plan failed,” he said. “I could have walked away. But I didn’t. I pulled it back from bankruptcy with my own hands.”