Offers roll in for Miramax Films, but will Disney sell?
Walt Disney Co. has received three bids for the specialty label Miramax Films, said people close to the situation who did not want to be identified because the offers were confidential, and now has to make a decision whether to sell the asset or hold on to it.
If Disney ends up selling Miramax, it would mark the end of the studio’s 17-year ownership of the label, known for championing independent films that often garnered awards on the film festival circuits. But Miramax’s strategy of focusing on smaller films has been increasingly out of sync with Disney’s emphasis on mainstream movies targeting families and young adults, the largest sector of the filmgoing audience.
Supermarket magnate Ron Burkle and his Yucaipa Cos. made a bid in association with Bob and Harvey Weinstein, the founders of Miramax who sold the company to Disney in 1993 but left five years later after falling out with their Burbank-based corporate parent.
FOR THE RECORD:
Bob and Harvey Weinstein left Miramax in 2005, 12 years after they sold the company to Disney.
Also bidding was another set of brothers -- Alec and Tom Gores, who run separate investment firms, the Gores Group and Platinum Equity. Sibling Sam Gores, founder of Paradigm talent agency, has been advising them.
And coming in at the last minute was financier David Bergstein, who through his firm, Pangea Media Group, had been kicking the tires on Miramax for weeks, said a person familiar with the matter. Pangea’s bid was the highest, the person said.
Disney was initially seeking an all-cash deal of between $650 million to $700 million, people close to the matter said. Summit Entertainment and Amir Malin’s investment firm Qualia Capital early on weighed making bids but balked at the asking price.
A representative for Disney did not immediately respond to requests for comment.
If the Burkle-Weinstein bid is successful, the Weinsteins would be primarily managers-for-hire to exploit the 600-title library they helped build, and to produce and distribute new films. Under the Weinsteins, Miramax was responsible for such Oscar- winning movies as “Shakespeare in Love,” “The English Patient” and “Chicago” and earlier offbeat hits such as “Pulp Fiction” and “The Crying Game.”
For the Weinsteins, just being able to say they are back in the saddle at Miramax would be, if nothing else, a psychological victory. Whether they would also bring back their Midas touch remains to be seen. Other than “Inglourious Basterds,” the Weinstein Co. has had few successes to boast about in recent years. The company has gone through a major financial restructuring and has drastically cut back both its staff and movie slate. Several of its movies have either gone straight to DVD or are sitting in limbo awaiting release.
Over the last week, the Goreses and Weinsteins had discussed the possibility of joining up in a bid but ultimately decided to make independent offers.
The Goreses and Weinsteins are interested in keeping Miramax alive as a going concern, according to knowledgeable people.
Early this year, in a cost-saving move, Disney shut down the independent film unit’s New York and Los Angeles offices and pink-slipped dozens of people. Disney Chief Executive Bob Iger made it clear in an earnings call in February that “continuing to invest in Miramax movies wasn’t necessarily a core strategy of ours.” Under Disney’s recently installed movie chief Rich Ross, the studio is primarily focusing on making and releasing family-branded films that can be exploited across all of their entertainment divisions, including consumer products and theme parks.
If the Goreses were to prevail in acquiring Miramax they would need to find a strategic partner involved in movie distribution since the investors have no such infrastructure in place.
Bergstein’s emergence adds even more intrigue. He and his business partner Ron Tutor are currently embroiled in a nasty legal dispute with a number of creditors who are attempting to force five of their companies into Chapter 11 bankruptcy proceedings. The creditors’ filings, made in U.S Bankruptcy Court in Los Angeles last month, accuse Bergstein of financial mismanagement and allege that he has “demonstrated repeatedly that he is unfit and incompetent.”
Last week, a federal bankruptcy judge appointed an interim trustee to oversee Bergstein as he continues to run the five companies.
Time staff writer Joe Flint contributed to this report.