Disney Snaps Up Miramax for Estimated $60 Million : Films: Independent company gained fame with ‘The Crying Game.’ Weinstein brothers to retain control.
The two brothers behind the quirky hit film “The Crying Game” can now cry all the way to the bank.
Miramax Film Corp., which gained international attention this year with its Oscar-nominated thriller that mixes sexual intrigue with Irish terrorism, is being bought by Walt Disney Co. in a deal that marries Hollywood’s most successful studio with its leading independent distributor.
Although no terms were disclosed in Friday’s announcement, analysts and Hollywood executives estimated that Disney will pay close to $60 million for Miramax and its library of more than 200 films, with some of the payments contingent on Miramax’s performance.
Disney also has agreed to give brothers Harvey and Bob Weinstein, Miramax’s co-chairmen, the kind of autonomy the tightly run company rarely granted until recently.
For Disney, the deal means access to the kind of prestige films it has had trouble producing on its own. But it may also push the boundaries of Disney’s wholesome image because some of Miramax’s biggest hits, such as Madonna’s “Truth or Dare,” have centered on steamy adult sexuality.
On a broader scale, the Miramax acquisition underscores the rising stature of independent film companies and the recognition that critically acclaimed “art house” films can also be major box office successes.
Miramax’s low-budget “The Crying Game” has grossed nearly $60 million, which is unheard of for a small, independent film. In addition, all but one of the films nominated for best picture at this year’s Oscars came from the independents’ ranks.
The Miramax acquisition, made through Disney’s Buena Vista Pictures arm, is unusual for Disney, which in the past has launched film ventures from the ground up. The 15 to 20 films a year Miramax releases will boost and broaden Disney’s box office reach, with speculation that the company may soon be distributing 40 to 50 films a year--about twice the major studio average.
One question raised is whether the Weinsteins will fit into a company that likes to call itself “Team Disney.” In the past, the Weinsteins have clashed with filmmakers and developed a reputation for sometimes running roughshod over small filmmakers and employees. The brothers have been working to repair their reputation.
Walt Disney Studios Chairman Jeffrey Katzenberg predicted that things will go smoothly.
“They have had to live from hand to mouth as any independent has had to,” he said. “As the marketplace has become more and more difficult and the risks become greater and greater financially, giving them the financial resources ensures that they will continue to be the best, most successful independent film company in the world.”
Acquiring Miramax is one of several moves Disney has made recently to add to its product line the kind of art house films that often have trouble finding an audience because major studios shun them. In addition to the Miramax deal, Disney recently agreed to distribute movies made by filmmakers James Ivory and Ismail Merchant, whose work includes the critical hits “A Room With a View” and “Howards End.”
Miramax will remain in New York, operating as a separate company under the management of the Weinstein brothers, who have been given five-year contracts.
Executives from Miramax and Disney emphasized that Miramax will operate as it has in the past, using the same marketing and distribution apparatus but backed by Disney’s huge resources.
“This company is named Miramax. It is a stand-alone, independent and autonomously run company,” Katzenberg said.
Miramax had been rumored to be an acquisition candidate for a couple of years, although Disney and Paramount Studios only recently came into the picture as the most likely buyers. Independent film companies frequently need to seek partners or sell stock to the public because they tend to be chronically short of cash.
But Harvey Weinstein denied that the company needed to find a buyer. “We were in the unique financial position of not having to do anything. This company has been successful in 11 out of the last 12 years,” he said.
Katzenberg said: “This deal was never shopped to us. It wasn’t in any way, shape or form put up for auction. We approached them.”
As a private company, Miramax does not release financial figures. But in March, the Weinsteins told The Times that preliminary figures showed Miramax in 1992--before “The Crying Game” took off--would earn $4.7 million on revenue of about $75 million.
Founded 14 years ago, Miramax was named after the Weinsteins’ parents, Miriam and Max. Known as shrewd marketers, the brothers built the company on the success of such independent films as “sex, lies and videotape,” “The Crying Game” and “Scandal.”
The duo has developed a reputation as two of the more colorful figures in film with a passion for movies and a lack of concern for such basic things as decorum. Indeed, neither brother wore a necktie to the news conference.
From a financial point of view, the Miramax acquisition represents a relatively small risk for Disney, which had about $7.5 billion in revenue the last fiscal year. “Even if they make a mistake, it’s not going to change Disney’s fate or direction,” said Merrill Lynch analyst Harold Vogel.
Disney is expected to keep the Miramax banner separate from the Disney name, much as it has done with its Touchstone Pictures and Hollywood Pictures units that release more adult-themed films.
Jeffrey Logsdon, an analyst with Seidler Amdec in Los Angeles, said that as a result, Disney’s image will not suffer if Miramax releases more explicit films because Disney has already broken the adult-theme barrier.