I heard several different versions from several guys, but it all boils down to three basic plots:
It was 1977, and 17 year old Scott has just finished Blansky's Beauties, while 15 year old Jimmy had just finished with The Bad News Bears in Breaking Training.
Scott's father, a canny stage dad who knew his way around strategic casting couches, arranged an introduction to the dapper Mexican-born Ricardo Montalban, age 56, then filming the first episodes of the Saturday-night old-person's favorite Fantasy Island (1977-84).
Montalban had seen Jimmy in The Bad News Bears, and asked that he be included to "sweeten" the deal.
They met at a hotel in Hollywood. My source went into detail about the sexual activity, but I won't repeat it here, since Scott and Jimmy were both underage.
It was 1980, and Scott, age 20, was playing Fonzie's cousin Chachi on Happy Days, while Jimmy, age 18, was a bigger star, playing Billy Tate on Soap.
59-year old Montalban, who was filming Fantasy Island at ABC's Burbank studio, was a fan of Soap, and sometimes came to watch rehearsals. He and Jimmy, who was gay but closeted, soon began a romantic relationship.
When Scott heard about Montalban's proficiency in bed and enormous 10" penis, he begged Jimmy to let him watch. Montalban agreed.
They met at Scott's house in Studio City. After playing pool and drinking some wine coolers, they went into the bedroom, where Scott watched as Montalban and Jimmy kissed and fondled each other, then got undressed.
As Jimmy was going down on Montalban, he motioned for Scott to join them. Scott eagerly got undressed. His 6" was already aroused.
Then he ordered Scott to bring himself to orgasm while they watched.
The hookup was never repeated, and Jimmy and Montalban broke up a short time later.
It was 1984, and Scott, age 24, was starring in Charles in Charge, while Jimmy, age 22, was scrounging around for tv guest spots after the cancellation of Soap.
Jimmy often went to the cruising area in Griffith Park, and one day he saw the 63-year old Montalban there. They had met several times, but neither knew the other was gay.
They went back to Montalban's house on Oriole Street in the Hollywood Hills and hooked up.
Jimmy was an anal bottom, but this was during the AIDS crisis, so he confined himself to going down on Montalban's enormous penis, kissing, and interfemoral.
Montalban suggested BDSM activity in addition to vanilla sex. Jimmy agreed, as long as his cousin Scott, who was well known as a BDSM bottom, came along.
They met at Montalban's house, which had a fully equipped BDSM dungeon.
Montalban forced them to strip and fondle each other. Then he chained them together for light whipping and clothespins on their nipples and bellies.
Then Jimmy had to go down on Montalban while Scott remained fully aroused without touching himself. If Scott lost his arousal, he would get spanked.
He got spanked.
Jimmy didn't like the BDSM scene, so it was never repeated. He and Montalban broke up shortly thereafter.
Theoretically, all three: Scott has been the subject of many gay rumors, and Jimmy, who now lives in New York City and has never married, is probably gay. Ricardo Montalban was a devout Catholic, married to his wife Georgina for over 60 years, with four children and no gay rumors that I can find. But that doesn't mean he wasn't interested in occasional same-sex activity.
#1: I find it very unlikely that the suave, sophisticated Montalban saw The Bad News Bears in Breaking Training. And although I've heard about the casting-couch-pimping father before, Montalban seems an unlikely candidate: he had been in many minor movies and tv shows, but was not particularly famous, and was in no position to advance Scott's career.
#3: Scott has been the subject of BDSM rumors, and the details of Montalban's residence and penis size are accurate. But Montalban was living with his wife and his youngest son Vic at the time. It is unlikely that he had a BDSM dungeon in his basement.
#2: Sounds most realistic. By 1980, Montalban knew Scott and Jimmy from their guest spot on a May 13, 1979 episode of Fantasy Island (Jimmy guest starred by himself on an October 31, 1981 episode). A studio meeting makes more sense than a cruising area. If any of them is true (and they may all be pure fabrications), this one is.
See also: The Top 10 Rumors about Scott Baio; Scott Baio and the Hard Master.