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If One Weinstein Stays, Disney Hopes It’s Bob

Times Staff Writers

No Hollywood figure is generating more intrigue these days than Harvey Weinstein, who has turned his musings about his future into daily grist for industry gossips and news hounds.

In a public spat, the Miramax Films co-founder recently became so fed up with parent Walt Disney Co. that he said he was ready to break free from a partnership that produced such Oscar-winning hits as “Chicago” and “Shakespeare in Love.” The boiling point came in May, when it was disclosed that Disney Chief Executive Michael Eisner had blocked Miramax from releasing Michael Moore’s anti-Bush documentary “Fahrenheit 9/11" because of its political bent.

For the record:

12:00 a.m. July 23, 2004 For The Record
Los Angeles Times Friday July 23, 2004 Home Edition Main News Part A Page 2 National Desk 0 inches; 33 words Type of Material: Correction
Bob Weinstein -- In some Sunday editions, a photo caption that ran with an article in Section A said Bob Weinstein had produced “Scary Movie,” a horror film. “Scary Movie” is a comedy.

But behind the battle lines it is the other Weinstein -- Harvey’s younger brother Bob -- who may be the biggest dog in this fight. Disney does not want him straying.

Unlike some of the costly and risky movies now favored by Harvey, Bob has produced a string of lower budget moneymakers at Miramax’s Dimension Films unit, including the “Spy Kids,” “Scary Movie” and “Scream” franchises.

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Then there’s the added boost Bob brings to Eisner, who has been criticized for alienating key creative partners.

If Eisner were able to keep him in the Disney family, the CEO might avoid a public relations fiasco similar to what happened after his company failed to reach a deal with longtime collaborator Pixar Animation Studios. Although the financial effect of losing the men behind Miramax’s successes pales in comparison, analysts said their departure would still be embarrassing because of the Oscar prestige they had brought to Disney.

“Miramax is highly visible, even though it’s a small division,” said Merrill Lynch analyst Jessica Reif Cohen. “It’s not something they can sweep under the carpet.”

Disney executives declined comment, as did Harvey Weinstein. Through a Miramax spokesman, Bob Weinstein said: “As always, Harvey and I are working closely together in trying to reach an amicable resolution with Disney.”

Given the tensions and rhetoric, which recently reached an all-time high, most observers think a resolution could come within weeks. In the meantime, Harvey has tried to calm his troops. During a meeting with his senior executives Friday, he downplayed rumors that he was heading for the Miramax exit. He said he intended to stay at least until his and Bob’s contracts expired in September 2005.

There is, of course, a chance that nothing will change and that both brothers will continue to work at Miramax under Disney’s direction. All parties agree the situation is fluid.

A source close to the Weinsteins said recent discussions with Disney had become less strained. “The temperature from ‘Fahrenheit’ has cooled down,” the source said. “The talks have become more amicable than in the past.”

The Weinsteins have feuded with Disney for more than a year over the amount of production and marketing money the Burbank conglomerate gives Miramax each year. They also have clashed over the brothers’ compensation.

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The two sides have even been unable to agree on how much Miramax has contributed to Disney’s bottom line.

Eisner recently said Miramax was profitable for two of the last five years, a contention disputed by the Weinsteins. Last year, according to a source familiar with the studios’ finances, Disney recorded an $87-million profit at Miramax. The Weinsteins pegged it at $211 million. From Disney’s perspective, Miramax’s real value is in its library, valued at an estimated $2 billion by Wall Street media analysts.

On top of the financial disputes is the personal animus that has developed between Harvey and Eisner, propelling the conflict beyond the normal give-and-take between a parent company and its subsidiary.

As a result of all this, Harvey has been exploring ways to leave the company he and his brother -- both college dropouts from New York -- founded 25 years ago and that they named after their parents, Miriam and Max. In 1993, Disney paid about $75 million to buy the scrappy independent movie outfit, the most influential purveyor of art-house films.

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The many arrangements now under discussion have one thing in common: Harvey wants the kind of autonomy that can come only from escaping Disney’s direct financial and creative control. This would mean setting up an independently financed production company that potentially would pay Disney a fee to distribute its movies.

Sources said that in a best-case scenario, the brothers would be allowed to buy the Miramax name -- something they hold dear because of its sentimental and marquee value. By most accounts, however, that is a longshot. Disney would not want to create public confusion over ownership of the brand, given that it intended to retain control of the lucrative Miramax film library.

More likely, Harvey, 52, would launch his own production company while Bob, 49, would continue to run Miramax’s Dimension Films, remaining in the Disney fold.

Such a scenario appears to benefit all sides.

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“From Disney’s perspective, it’s a great compromise,” Reif Cohen said. “Having one Weinstein is better than having none.”

For Eisner, the structure removes a thorn in his side. Harvey, who wants to make bigger movies and is attracted to controversial projects, has chafed under Disney’s tight controls. At the same time, Eisner would be able to preserve ties with Bob, whose movies are largely profitable and are more in sync with Disney’s mainstream sensibilities. What’s more, he has not personally clashed with Eisner and has not been creatively constricted, sources close to the brothers say.

Eisner recently praised Bob at Allen & Co.'s annual media conference in Sun Valley, Idaho, calling him a talented executive running one of the more successful businesses in the industry.

In contrast, Eisner has said Harvey is at his best when he is focused on smaller movies, rather than on projects that are too expensive and return too little. Those have included such star-driven films as “Cold Mountain” and “Gangs of New York.”

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Bob’s films at Dimension, meanwhile, have generated some of the highest returns in the industry. The company claims that 45 of its 54 movies have been profitable -- an extraordinary run in such a hit-or-miss business.

“Bob is a supremely successful producer, filmmaker and businessman,” said agent Robert Newman, who represents “Spy Kids” director Robert Rodriguez and years ago worked for the Weinsteins at Miramax.

A Miramax without Harvey would dismantle one of the most successful studio partnerships in history -- and fundamentally alter a unique Hollywood relationship that began 25 years ago.

Always working within shouting distance of each other, the brothers revolutionized the independent movie world. From their cramped Manhattan offices, they turned inexpensive art-house movies into mainstream hits through savvy marketing. Bob was happy to run the less-glamorous business aspects of Miramax, while his brother took the creative lead.

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But in 1994, Bob began calling his own shots with the formation of Dimension. The company hit pay dirt with its release “The Crow,” about a rock guitarist who returns from the dead on Halloween eve.

Bob’s triumphs moved him out from the long shadow of his older brother, whose charismatic and larger-than-life personality differed dramatically from his own. Unlike Harvey, known as a heat-seeking publicity missile, Bob has always shunned the spotlight.

Given his increased importance, any new deal that Disney might strike to keep Bob at Miramax could be expensive and complicated for the Burbank company. Undoubtedly, he would try parlay his clout into more cash.

Unwinding Harvey’s deal could be equally difficult. If Disney decides to end the infighting by releasing him before his contract expires next year, the company would have to pay him a negotiated settlement. By March, Disney must let the brothers know whether their deals will be extended for four years.

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Those who know the brothers say that whatever shape their future working relationship may take, nothing will come between them.

Newman, their longtime friend and business associate, said, “They’re loyalty to each other supersedes anything else in business.”

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(BEGIN TEXT OF INFOBOX)

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A portfolio of hits

Dimension Films, overseen by Bob Weinstein, has been a cash cow for Walt Disney-owned Miramax.

Hit franchises:

“Scream” series: $298 million

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“Scary Movie” series: $338 million

“Spy Kids” series: $311 million

Additional Hits:

“The Others”: $96 million

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“The Crow”: $51 million

Coming attractions

* “Cursed”: A hip take on the classic werewolf story set in Los Angeles. Directed by Wes Craven, written by Kevin Williamson, starring Christina Ricci. (Set for release Oct. 1, 2004.)

* “Sin City”: Based on Frank Miller’s series of graphic novels about one of the grimiest cities in the world. Directed by Robert Rodriquez, starring Bruce Willis and Jessica Alba. (Due for release next year.)

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* “Shark Boy and Lava Girl”: A 3-D fantasy kids movie written and scheduled to be directed by Robert Rodriquez. (Production expected to begin in fall.)

* “The Amityville Horror”: A remake of the 1979 horror film to be co-produced by MGM. (Production expected to begin in fall.)

Source: Exhibitor Relations Co.


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