Miramax Acquires Rights to Two ‘Pokemon’ Sequels

Miramax Films, which specializes in edgy art-house movies, has acquired the theatrical, home-video and television distribution rights to the next two “Pokemon” movie sequels in North America and all international territories outside Asia.

The movie firm, owned by Walt Disney Co., also has first crack at distributing future animated “Pokemon” films.

Distribution rights to the first three “Pokemon” movies were licensed to Warner Bros., which controls the rights to two “Pokemon” TV series airing on the Kids WB! network. Warner also was in the bidding for the fourth and fifth movie installments.

Miramax Co-Chairman Harvey Weinstein said he closed the Pokemon deal late Tuesday but declined to disclose financial details. A source close to the negotiations said Miramax paid a low upfront guarantee of $1 million and promised the rights holders an attractive 75% on back-end profits.

Miramax negotiated the deal with Pokemon USA Inc., the brand management licensing subsidiary of the Japanese consortium that owns the Pokemon franchise in which the three largest investors are Nintendo Co., Creatures Inc. and Game Freak Inc. All of the low-cost Pokemon cartoons are produced in Japan.

Miramax has landed the Pokemon franchise at an odd time, two years after the frenzy over the warring cartoon monsters peaked.

Still, Weinstein said his company can “reinvigorate the franchise” using Miramax’s marketing savvy. “We’ll come up with a bolder, smarter marketing concept,” he said. Miramax plans to release “Pokemon 4” in October.

Although the first three Pokemon movies were profitable for Warner Bros. because of their low acquisition costs, their popularity has dwindled since the original was released in 1999.

“Pokemon: The First Movie” grossed $85.7 million domestically, according to box-office tracking firm Exhibitor Relations Co. One year later the sequel, “Pokemon: The Movie 2000,” managed only about half as much, $43.7 million. The most recent installment, “Pokemon 3: The Movie,” took in just $17 million a year ago. Internationally, in all territories outside Asia where Warner distributed the films, the numbers also fizzled. The last sequel grossed $12 million.

This week, New York-based 4Kids Entertainment Inc., which represents all merchandising and TV and film distribution rights to Pokemon outside Asia, reported that the company’s fourth-quarter profit plummeted 74% as revenue from the cartoon franchise declined. 4Kids Chairman Al Kahn was quoted as saying that the company’s results “reflect the slowdown of Pokemon-related licensing revenues between 2000 and 2001.”

Another indicator of Pokemon’s decline: For the first time in more than two years, Pokemon last week fell from Internet search engine Lyco’s list of the 50 most frequently searched sites. When Lycos began the list in 1999, Pokemon debuted at No. 1 and stayed there for a year.

Nonetheless, Weinstein has faith that the characters will rise again. “For us,” he said, “this is a big fish and a valuable brand.”

Weinstein has been stockpiling projects to start a new family film label to complement Miramax’s art-house movie business and the more mainstream films of its Dimension Films label, run by younger brother Bob. Dimension’s 2001 release “Spy Kids”--a James Bond-like action hit that grossed $113 million--already has spawned a family movie franchise. The sequel is due this summer. Plans for a third movie are in the works.

This is not the first time the Weinsteins have attempted to launch a family division. In 1993, they unveiled Miramax Family Films with “Into the West.” When the film flopped, Miramax dropped its family label. Harvey Weinstein subsequently said he should stick to what he knows best--adult movies.