By Chris Nashawaty and Anna Holmes
Updated September 06, 1996 at 04:00 AM EDT

Deals It’s enough to make an accountant lose his religion. In what’s being called the largest recording contract in history, R.E.M. signed a five-album deal, valued at a reported $80 million, with Warner Bros. Records on Aug. 24. The band’s previous deal with Warner expired when it finished recording its latest album, New Adventures in Hi-Fi, due in stores Sept. 10. The band, which has sold more than 30 million records since forming in 1980, has been at the center of a fierce bidding war, which included such Warner rivals as DreamWorks, Sony, and Capitol. ”I can’t imagine how people at Warner would have felt if R.E.M. had left,” says label president Steven Baker….

Arsenio Hall will star in an as-yet-untitled mid-season romantic comedy series on ABC. The network has reportedly agreed to buy 13 episodes from DreamWorks, the show’s production company, at a hefty $900,000 an episode.

Births/Expecting Sylvester Stallone, 50, and his fiancee, Jennifer Flavin, 28, are the proud parents of 7-pound 4-ounce Sophia Rose, born Aug. 27, in Miami. It’s the couple’s first child together. Stallone has two children from a previous marriage: Sage, 20, and Seargeoh, 17….

Actor Liam Neeson, 43, and his wife, actress Natasha Richardson, 33, welcomed a son, Daniel Jack Neeson, Aug. 27, in New York. The couple have another son, 14-month-old Michael Richard Antonio….

CBS News anchor Paula Zahn, 40, and her real-estate-developer husband, Richard Cohen, 48, are expecting their third child Jan. 15….

Singer Melissa Etheridge, 35, and her partner, music-video director Julie Cypher, 31, are expecting their first child in January. The couple won’t comment on how Cypher became pregnant, aside from a statement from Etheridge saying ”Both Julie and I have been planning this for a long time and we couldn’t be happier.”…

Odd couple Tony Randall, 76, and his wife, actress Heather Harlan, 26, are expecting their first child in April.

Real Estate The days of being a Material Girl seem to be over for Madonna. Reportedly, the mother-to-be, whose 7,800-square-foot Hollywood mansion has been on the market for months (at a listed price of $6.5 million), just shelled out $2.7 million for a much cozier 3,500-square-foot Mediterranean-style spread in nearby Los Feliz. Good thing she’s not having twins.

Weddings Swedish supermodel Vendela, 29, married Norwegian businessman Olaf Thommessen Aug. 24 in Stockholm. It’s the first marriage for both. Instead of a honeymoon, the couple will purportedly return to L.A., where the Scandinavian beauty is prepping for her role as Mrs. Freeze in the upcoming Batman and Robin.

Ailing Actor Jan-Michael Vincent, 51, was hospitalized at Mission Hospital Regional Medical Center in Mission Viejo, Calif., Aug. 26, with a fractured vertebra in his neck and facial lacerations after a traffic accident. Vincent was driving his 1988 Mazda and following his girlfriend, Nicole Wallace, 28, when he accidentally collided with the back of Wallace’s car and spun into a traffic signal. Doctors said Vincent, who was placed in intensive care, was in serious but stable condition. Wallace was uninjured in the accident.