JERRY WEINTRAUB’S STRUGGLE : Can the Hollywood mogul, philanthropist and close friend of the President salvage his film company?

Jerry Weintraub, movie mogul, is scratching to save his company--and he really doesn’t want to talk about it.

Yes, he acknowledged in a telephone interview, he is hard at work on a specific deal that could bail out his hit-starved Weintraub Entertainment Group.

Yes, former junk-bond king Michael Milken has joined the salvage effort, along with investment bankers Bear, Stearns & Co.; Nomura Securities, and Pierson, Heldring & Pierson N.V.--not to mention Credit Lyonnais Bank Nederland N.V. and Bank of America, already heavy lenders to the independent producer.

But, no, there is no danger of a bankruptcy filing, and no , Weintraub doesn’t plan to give up the reins to his company.

“It is my intention to remain in control . . . There, I’ve said it,” concluded Weintraub, who has become Hollywood’s latest emblem of fleeting success.

Launched in 1987 with a promised $461 million in backing from big companies such as Columbia Pictures and Cineplex Odeon Corp., Weintraub Entertainment aimed to compete with the major studios on their own turf, making and releasing mainstream movies. Two years later, the company is fighting for survival. That’s partly because a major portion of its much-touted funding didn’t materialize, but largely because none of its films--from “The Big Blue” through “The Gods Must Be Crazy II”--hit the jackpot. Some, such as “Listen to Me” and “Troop Beverly Hills,” were outright flops.

In the way of Hollywood, the string of box-office failures has focused unusual attention on Weintraub, a 51-year-old show business insider who used to be best known for his charities and his long-standing ties to figures as wide-ranging as Bob Dylan, Frank Sinatra and George Bush. Weintraub worked with the likes of Dylan and Sinatra during his long career as a concert promoter and later parlayed his celebrity connections and political largess into a wide network of influential friends, one of whom became the President.

Wall Street doesn’t have a serious stake in Weintraub’s company, since its stock--over which he holds about 76% control--doesn’t trade publicly, and his $80 million in bonds are closely held by a small group of investors. But Hollywood deal makers, usually quick to offer their projects when a troubled firm finds new money, are watching closely to see if Weintraub can salvage his fortunes.

“If he has one hit, everything changes. Then it’s ‘Jerry, how are you? Jerry, I need a little money for this charity I’m working on. Jerry, I’ve got a movie I want to show you,’ ” a producer who has worked closely with Weintraub said.

One Weintraub friend said the executive has “gone underground,” concealing his rescue efforts from even close associates. Months ago, he was in the Far East, negotiating with Japanese investors such as Funai Corp., a maker of video equipment, for a potential capital infusion. As those talks apparently failed, he became involved in talks with Stephen Swid, a New York investor who was cash-rich from his quick purchase and resale of the CBS music publishing operation.

Swid might have put up to $75 million into Weintraub’s company--enough to pay some of the bank debt and launch a new slate of films. But the two wound up in a standoff over control, and the talks stalled.

At the same time, Weintraub talked with Warner Bros. about a new deal to distribute future films, reportedly in return for bigger advances than his Columbia contract allowed. By several accounts, Warner was interested, but Columbia refused to let him out of its contracts. Weintraub declined to comment on those accounts.

When longtime friend and financier Milken, who is awaiting trial on 98 charges of violating federal securities laws, joined the salvage effort several weeks ago, Weintraub and his associates seemed confident that a bailout was just around the corner. Gerald Parsky, a company director and attorney, at the time said a restructuring “transaction” was imminent. Three weeks later, Weintraub made an overdue interest payment--a week before he would have been in default on his bond agreements--but the transaction has yet to materialize.

Ironically, the principal value of Weintraub’s company probably lies in its film library--the acquisition of which initially threw his business out of kilter, according to some individuals familiar with the company.

Weintraub bought the 3,000-title movie and TV library on May 1, 1987, from financially strapped Cannon Group Inc. for $85 million plus 625,000 shares of Weintraub Entertainment stock valued at $7 a share.

Debt an Issue

The purchase was consistent with conventional Hollywood wisdom that a cash flow from library sales is the best insurance against the brutal, hit-and-miss cycle of movie production. But it was also a massive undertaking for a company that was supposed to be devoting its capital to film making, and it saddled Weintraub Entertainment with about $50 million in loans from Credit Lyonnais and an additional $40 million in debt securities used to retire an interim loan from Bank of America.

With an eye on that debt and the rapidly deteriorating status of other independent film makers in 1987, Bank of America exercised its right not to proceed with an additional $95 million in credit--the backbone of Weintraub’s war chest.

Shortly after acquiring the library, Weintraub pressed Cannon into an arbitration in which Weintraub’s company recovered both its stock and $3.8 million to reflect the lower-than-expected quality of some of the library’s contracts for sales. Yet one source closely familiar with Weintraub’s finances now says the library--which includes 10 Alfred Hitchcock films, as well as “Frances,” “Tender Mercies,” “Murder on the Orient Express” and other contemporary titles--is probably worth between $150 million and $200 million, thanks largely to an explosion in European TV sales.

Spokesmen for Columbia Pictures Entertainment and Cineplex-Odeon, both of which invested heavily in Weintraub Entertainment, have declined to discuss the company’s prospects.

Despite his financing travails, Weintraub has maintained his high profile in the philanthropic and political communities. He has been a mainstay of such charities as Cedars Sinai Hospital and Chabad House, a Westwood drug treatment center. Several months ago, even as his company came under financial pressure, Weintraub endowed five screenwriting scholarships at the University of Southern California, where the son of his right-hand man, Kenneth Kleinberg, is enrolled in the film program.

Weintraub’s political friendships include Democratic congressmen Mel Levine and Howard Berman, Republican Sens. William S. Cohen and Pete Wilson, California Assembly Speaker Willie Brown, Los Angeles Dist. Atty. Ira Reiner and Los Angeles County Sheriff Sherman Block.

Political Sitcom

Levine, a liberal representative from Los Angeles, maintained that Weintraub, though a heavy contributor to candidates on both sides of the party ledger, is scrupulous in his political dealings. “He has never asked me for anything, and I believe he never wanted anything. Jerry’s relationships are based on personal friendship and loyalty,” said Levine.

Occasionally, however, those political relationships have overlapped with his business affairs. Rep. Berman’s wife Janis, for instance, received a fee from Weintraub Entertainment Group in exchange for a concept for a TV comedy about four congressmen who live in the same house.

The congressman’s wife hadn’t previously worked as a professional screenwriter, and the show hasn’t been produced for any network so far. Both Weintraub and Jean Smith, a spokeswoman for Rep. Berman, declined to say how much Janis Berman was paid. Weintraub said CBS expressed interest in the series, but he has “no idea” if it will ever be made.

A mainstay of Nancy Reagan’s anti-drug campaign, Weintraub two years ago produced 13 anti-drug “trailers” that were shown in movie theaters. The first trailer featured Nancy Reagan and Clint Eastwood, and others contained messages from Hollywood stars.

But Weintraub himself has been periodically beset by rumors that he has had a drug problem, despite his strong public stance against illegal drug use.

During an emotional interview at his Palm Springs resort home this spring, Weintraub passionately denied the drug rumors. He said: “I do not have a drug problem. I do not do drugs. I can’t say that I never did drugs, but I’m not saying that I did do drugs. I never did drugs on any kind of a sustained basis or anything like that.”

Bush Friendship

Outside Hollywood, Weintraub’s best calling card is his close relationship with President Bush--a relationship that took root long before either man rose to great prominence. The President underscored that friendship two months ago by assuring a pair of Times reporters that he had personally entertained Weintraub at the White House only an hour and a half before the reporters’ visit.

Both men have homes in the clubby resort town of Kennebunkport, Me. Bush owns a rambling, field-stone complex on Walker’s Point, a family property that he bought from his mother in 1981. The Weintraubs, while living primarily in Malibu and Beverly Hills, often spend summers about three miles away, in a big, yellow frame house called “Blueberry Hill.”

“Blueberry Hill” belongs to Weintraub’s wife, 65-year-old singer Jane Morgan Weintraub (nee Florence Currier), whose family made close connections with the Bushes while summering in Kennebunkport over 50 years ago.

“I’ve known George Bush since he was 12 years old,” explained Robert Currier, the singer’s 76-year-old brother. In the 1930s, Currier built the Kennebunkport Playhouse, which drew support from the Bushes and the Walkers, the family of George Bush’s mother.

In the 1950s, George Bush, by then married, saw Jane Morgan perform at the playhouse and struck up a fast friendship. The singer introduced the rising politician to Jerry Weintraub--who had been her agent--after her marriage in 1964, and did her share to boost Bush’s political career by singing at fund-raisers during his Texas congressional campaigns.

Nancy Bush Ellis, the President’s sister, finds Weintraub a natural fit among Bush’s most intimate advisers. “Oh, they’re close,” she said. “Jerry’s like (Treasury Secretary Nicholas F.) Brady and (Secretary of State James A.) Baker and all of them. A very quiet, comfortable guy. Just the kind of guy my brother likes.”

Others, however, believe that Bush, the consummate preppie, was attracted to Weintraub, the Brooklyn-born son of a traveling salesman, precisely because they are opposites. “Jerry’s got warmth, he’s got humor, he’s got a spark. I think the President sees him as a person he can let his hair down with . . . And I think Jerry gives him a little window on Hollywood,” said former U.S. Sen. John V. Tunney, a friend to both.

Talent Agency Start

Yet, others contend that Weintraub befriended Bush more than 10 years ago--when most Hollywood support went to Democrats and the rest to favorite son Ronald Reagan--in a simple bid for personal power. “Jane explained to me that (Weintraub) wanted to make some kind of indentation in Southern California for backing politicians,” Currier said of his brother-in-law. “He has no values as far as people go. He just likes to bet on something that’s going to win.”

A high school graduate who enlisted in the Air Force as a radio operator, Weintraub broke into show business as an assistant agent with the Music Corp. of America talent agency in New York--and soon developed a sense of destiny to match that of his chief political friend.

According to friends, he has often said he expects to die a billionaire. Apparently believing himself well on the way to the billion-dollar mark, Weintraub in 1987 boasted to a reporter: “I’m a guy who has become one of the most successful men not just in the entertainment business, but in the world. I’m one of the richest people in the world.”

In fact, his personal fortune, though associates put it in the tens of millions of dollars, appears much too small to rank Weintraub among Forbes magazine’s annual listing of the 400 richest people in America; and his business career has been a jumble of successes and failures.

In the 1970s, having long parted with MCA, Weintraub built a powerful dual business around Concerts West, a promotion firm that he co-owned with Tom Hulett, and Management III, a music management firm that handled such stars as Neil Diamond, John Denver and Dolly Parton. But both firms sagged in the 1980s, as the top stars left, many of them, according to associates, citing their inability to hold Weintraub’s attention as he became increasingly enthralled with the movie business.

As an independent film producer, Weintraub won critical acclaim with “Nashville” and “Diner” and scored big with “Oh, God,” a major hit for John Denver, and “The Karate Kid,” which has led to a pair of sequels for Columbia. He was a powerful creative force, according to associates, and an attractive figure to the upper echelon of Hollywood executives. “Jerry is extremely vivacious, entertaining, and pleasant,” said Disney chairman Michael D. Eisner. “(He) is a good friend.”

But Weintraub’s 1986 stint as chairman of United Artists ended after just five months, when he left in a bitter dispute with majority owner Kirk Kerkorian, who claimed that Weintraub was overspending and underproducing at the studio.

Freewheeling Style

Weintraub, who owned approximately 2.5 million UA shares, later said: “I just didn’t realize at the time, in my exuberance, that when a guy owns 70% of the store and you own 11%, it’s his store, it’s not your store . . . Eventually there had to be some problems . . . I don’t work for anybody.”

Months after leaving UA, Weintraub launched his own company with a burst of publicity that focused on his funding and his freewheeling style.

The company’s debut film was “The Big Blue,” a French-made picture about the rivalry between a pair of champion “free-divers,” who compete by holding their breath while diving to great depths. In a burst of enthusiasm, Weintraub made a handshake deal to acquire U.S. distribution rights to the movie immediately outside the theater where he first saw it during a Paris junket with four other Weintraub executives.

But the movie, which starred Rosanna Arquette, took in a disastrous $3 million at the U.S. box office. And “My Stepmother Is An Alien,” a major Christmas film, took in only about $13 million, despite heavy production and marketing costs after Weintraub insisted on releasing it simultaneously with Universal’s “Twins,” which many industry observers had already tagged as the toughest film to beat in the big studios’ Christmas lineup.

So far this year, “Troop Beverly Hills,” “Listen to Me,” “She’s Out of Control,” and the “The Gods Must Be Crazy II” haven’t pulled in significant revenue for Weintraub. Plans to produce a film version of the stage musical “Evita” are still simmering, but Weintraub said he won’t make the movie unless a dispute over its budget is resolved.

To make new movies, Weintraub may need to restaff many key positions in his company. Among those who have left Weintraub Entertainment since last fall are Lynne Wasserman, senior vice president; film unit heads, Guy McElwaine and David Kirkpatrick; Harry Usher, acquisitions chief; Larry Sugar, library sales director, and David Weitzner, marketing director.

Despite the exodus, the company continued to spend freely on salaries and perquisites. As chairman, Weintraub has made $1.5 million a year (some of which he deferred last year), has enjoyed a Rolls Royce supported by a company car allowance and often chartered private jets rather than flying on commercial aircraft. But top executives vigorously attacked “extras” such as executive magazine subscriptions and parking validations for visitors.

Internal Conflicts

Kleinberg, president and chief operating officer, has said the production company probably spent less on executive perquisites than other movie studios.

Meanwhile, the company, which has about 150 employees, has suffered through a series of personal flare-ups.

In 1987, Vida Theresia Walter filed a sexual harassment claim against Weintraub, contending that she was fired after working as a temporary secretary for one week. Walter claimed that she was told by a personnel manager that she had to leave the company because she “wore a wedding ring” and that “Mr. Weintraub is a playboy.” California officials declined to say how the claim was resolved and Walter couldn’t be located.

The personnel manager, Linda Quinn, said Walter’s charge was untrue but that Weintraub subsequently pressured her into leaving in the belief that she had supported Walter. Weintraub denied that he had pressured either woman.

Weintraub raised eyebrows in Hollywood when he fired Lynne Wasserman, the 48-year-old daughter of MCA’s powerful chairman Lew Wasserman, because he suspected her of leaking information to Forbes magazine about the hitch in his bank negotiations.

After a stormy session in his office, Weintraub had Wasserman escorted to her car by a security officer. Both declined to discuss the incident. But an individual familiar with the Forbes report maintained that Wasserman didn’t leak the information, which had already been disclosed in a Securities and Exchange Commission filing.

Despite such encounters, Weintraub still has many supporters. Not least among them is ex-Treasury Secretary William E. Simon, a company investor and director, who became associated with Weintraub Entertainment through Parsky, his former business partner. Simon maintained earlier this year that the company was simply hurt by the kind of bad luck that can hit any studio.

“I don’t think anything is wrong. A couple of movies didn’t sell,” said Simon. “(Movie producer Steven) Spielberg has had problems every once in a while. It doesn’t mean he’s snake-bitten.”