Harvey and Bob Weinstein’s deal to reclaim Miramax Films falls apart
Harvey and Bob Weinstein’s bid to reclaim Miramax Films, the pioneering independent studio they founded in 1979, has been thwarted at the last minute.
In a major blow to the brothers, whose own movie studio Weinstein Co. is facing financial problems, their negotiations with Miramax owner Walt Disney Co. broke down Friday, the same day that the Burbank media giant hoped final deal points would be worked out and long-running talks would come to a conclusion, according to three people familiar with the situation.
After a month of exclusive negotiations, Disney was said to have lost patience with the Weinsteins because they were unable to agree to a set of final deal points. Also unresolved, according to one person close to the talks, was how Miramax would be integrated with the Weinstein Co.
Friday afternoon, after The Times reported that talks had fallen apart, Harvey Weinstein and his chief financial backer, supermarket magnate Ron Burkle, released a statement insisting that the deal was not dead: “The Weinstein Brothers, The Weinstein Co. and Ron Burkle are all working towards a deal to purchase and operate Miramax. The parties continue to work diligently towards an agreement.”
However, Disney still appeared uninterested in reviving talks for the moment.
Burkle and the Weinsteins had most recently bid $625 million for Miramax together with other investors. Burkle told The Times on Friday that raising money wasn’t an issue and that he could fully finance the acquisition.
Disney’s options now include revisiting a bid by investor brothers Alec and Tom Gores, who had made an offer of more than $550 million and are waiting on the sidelines.
Since Disney first shut down operations at Miramax and put it up for sale in January, the Weinsteins have been highly motivated to acquire the assets. They sold the company to Disney in 1993 for $80 million and the studio continued its spectacular run in the then-hot independent film business with such Oscar-winning hits as “Shakespeare in Love,” “The English Patient” and “Chicago.”
By 2005, the relationship between the Weinsteins and then-Disney Chief Executive Michael Eisner had soured and the pair were forced out of the company they had started. The New York-based brothers then launched a new venture, the Weinstein Co., with $1.2 billion in capital. But they have had a string of flops such as the musical “Nine” and ran into serious financial problems that prompted them to slash their staff and postpone a number of planned releases.
Taking over Miramax’s 611-film library and producing new films under its banner would have given the Weinsteins a fresh start and provided a shot in the arm to the independent movie sector, which has recently been in a period of retrenchment.
However, it has been a lingering question as to how receptive the Weinstein Co.'s financial backers — which include Goldman, Sachs & Co. and advertising giant WPP — would be to the brothers’ focusing on a new venture and how the two companies would function under the same management. Last month, Weinstein Co. board member Richard Koenigsberg issued a statement on behalf of the board supporting the potential deal.
Disney had hoped to get as much as $700 million for Miramax, but several initially interested parties, such as Lions Gate Entertainment and Summit Entertainment, balked at that price. The value of film libraries has been on the decline because DVD sales have fallen rapidly as consumers have increasingly shifted to rental services such as Netflix and Redbox.
Disney had three bidders willing to come closest to its asking price, including the Gores and an offshore company organized by troubled financier David Bergstein and his partner, construction magnate Ron Tutor.
Harvey Weinstein on Friday was still at the Cannes Film Festival in France, where he had previously been expected to announce the deal’s conclusion. A Weinstein Co. spokeswoman declined to comment.