Miramax, Disney Said to Be Near Split

Walt Disney Co. and its subsidiary Miramax Films have moved significantly closer in recent days to severing their fractious relationship, sources familiar with the negotiations said Thursday.

Several of those sources said a meeting of key players Wednesday night at Disney’s Burbank headquarters seemed to represent a turning point in the talks, with emotions lowered and expectations heightened that a resolution was near.

“We’re very close,” said one source with knowledge of the talks, which have spanned more than a year. “We resolved a bunch of issues.”

Another meeting was scheduled for Thursday night.

Neither Disney nor Miramax would comment. But the sources cautioned that negotiations could drag on, given the high stakes and strong personalities involved. Two months ago, a seemingly close deal collapsed.

Exactly how many issues now remain outstanding seems to depend on what side of the table you’re on.

Some sources close to Miramax suggested Thursday that the road to an agreement was relatively clear of obstacles.

“It’s just a matter of [lawyers] drafting a document,” said one.

Sources close to Disney, meanwhile, characterized the negotiations as far from over. As one executive put it: “Are we making progress? Yes. Is there a lot more to go? Yes.”

The split would end a successful partnership that began in 1993 when Disney bought the scrappy New York-based independent company from the Weinstein brothers for about $70 million. The relationship deteriorated in recent years as the two sides clashed over Miramax’s creative and financial autonomy. Disney and the Weinsteins also have battled over the brothers’ compensation and methods for measuring profit.

Despite differences on when a deal may be struck, sources on both sides said agreement had been reached on several crucial issues. Perhaps most significant, Disney has agreed in principle to pay Miramax co-chiefs Harvey and Bob Weinstein more than $100 million in compensation.

Because the brothers’ employment contracts with Disney don’t expire until September, the payout would cover their bonuses for 2004 and 2005, along with their share of future profits in Miramax films launched under the Weinsteins’ stewardship.

The precise amount the brothers ultimately would pocket hinges on how much they agree to pay Disney for the rights to projects they want to take with them. The brothers plan to set up a new production company, although industry experts say they could face difficulty raising the kind of significant financial backing they’re seeking.

Under terms of their proposed settlement, Disney would keep the publishing unit Miramax Books, although the Weinsteins would retain rights to some of the projects.

Disney also would continue to own Miramax’s film library of more than 500 titles, which includes such Oscar-winning hits as “Shakespeare in Love,” “Pulp Fiction” and “Chicago.”

Although the Weinsteins had long fought to keep their company’s name, Disney has refused. When the brothers founded Miramax in 1979, they named it after their parents, Miriam and Max.

Disney may agree to let the Weinsteins keep the name of Miramax’s less identifiable label, Dimension Films, which has produced such hit film series as “Scary Movie,” and “Spy Kids.”

One remaining sticking point between the parties is how they would share the rights to future sequels based on Miramax/Dimension movies that were released during the Weinsteins’ tenure. The two sides also are discussing possibly co-financing future projects.

The breakup of Disney and Miramax is, in a sense, the result of rising friction between Harvey Weinstein and Disney Chief Executive Michael Eisner. Among other things, Eisner bristled at Weinstein’s risky investments in big-budget movies such as “Cold Mountain,” which failed to become a blockbuster.

Last summer, tensions reached a peak when Eisner barred Miramax from investing in and releasing Michael Moore’s anti-President Bush documentary “Fahrenheit 9/11.” Weinstein publicly accused Eisner of cowardice. The brothers purchased the film rights from Disney and released the highly profitable documentary through Lions Gate Films.

The Weinstein’s are hoping to get a good send off in the upcoming Oscar race, with such contenders as “The Aviator” and “Finding Neverland.”