By Anne Thompson | Thompson on Hollywood July 9, 2010 at 9:56AM
So it appears that Disney is dead-set on selling its asset Miramax Films, a library of about 611 titles that generates $350 million a year, to a group led by billionaire Ronald Tutor including James Robinson's Morgan Creek, Thomas Barrack's Colony Capital, Abu Dhabi's Gulf Capital and David Bergstein's Pangea Media. Yes, the legally beleaguered Bergstein is still in the mix, although Disney would like to sweep the disreputable businessman under the rug. The Guilds have been protesting any deal that includes Bergstein, who is still in bankruptcy court. THR reports that he will have no active role in Miramax going forward if the deal goes through--which is not a foregone conclusion:
Tutor brought in Colony only about a week ago, after which the negotiations were led by Colony principal Richard Nanula, a former CFO of Disney. The buyers have entered a period of due diligence, in which they will get a more detailed look at the Miramax books. Closing by a July 28 deadline is contingent on what they find and raising the additional funds. The deal could still fall apart because it remains unclear where that debt portion will come from. There have been reports that banks have resisted participating because of questions about the valuation, especially without the cooperation of Bob and Harvey Weinstein.
Disney is not commenting.
Other investors were scared away by Miramax's steep cost, and Tutor might have a complicated time financing the deal, reports The Wrap, which sketches the preliminary outlines of the unconsummated $650-675 million acquisition. Disney was demanding $700 million. Here's the NYT.
The Weinstein brothers are still trying to get the chance to oversee the library that they helped to build. Sources close to them insist that their "2005 exit agreement with Disney gives them consultation and remake rights to more than two dozen of those key films, and that no one can remake them without their agreement," reports THR. But it is unlikely that just running Miramax again (their backer Ron Burkle would own it) would return the Weinsteins to their former glory. When they opted to leave Disney and strike out on their own, the Weinsteins didn't see how much they needed the resources and output deals of a major studio to pursue their business plan.
The Weinsteins are canny and sharp and have great taste, but they have not adapted to the changing world around them. They keep wanting to do things the way they did them before, to employ the tactics that once worked so well. While some say that Sony Pictures Classics has stuck to their knitting, it's true that Michael Barker and Tom Bernard never let their reach exceed their grasp. But the two co-heads are fundamentally conservative. And they zig and zag with market conditions and stay tuned into trends in worldwide production and audience demand. They wouldn't continue to thrive otherwise. They pursue a volume business that allows for small profits to pay off over time--and they rely on Sony output deals that the Weinsteins sorely miss. Fox Searchlight and Universal's Focus Features have similar options.
Meanwhile, what will the new Miramax be? According to the LAT:
The new Miramax is expected to produce several new movies annually. For the first year, Walt Disney Studios will distribute its movies until a new distribution operation has been formed. Colony principal Richard Nanula, a former chief financial officer at Disney, is expected to oversee the new Miramax on behalf of its new owners. The buyers are expected to hire an experienced movie executive to handle day-to-day operations, including production and distribution. Morgan Creek would probably handle overseas distribution of the Miramax films.
Morgan Creek's role is muddled. Some think that Robinson--who brought in CAA powerhouse Rick Nicita as co-chairman last year--will take a leading role in managing the Miramax library, which makes sense--the other partners in the deal are financeers. But Morgan Creek is a producer, not a distributor. The company has output deals with foreign distributors and Universal for North America. But Deadline reports that Robinson, like Bergstein, will get pushed out of the deal. If that were the case, why would Robinson invest $50 million? Robinson is a far cry from the notorious Bergstein. While Robinson's a colorful figure in Hollywood, he is credited as one of the few outside players to come into the business and make a go of it. He's a canny businessman who pays his bills, makes a few movies of varying quality a year (Major League, Georgia Rule, The Good Shepherd) and operates in the black.
I don't buy the idea of anyone starting up Miramax as a production entity. This is a library asset sale--assuming it goes through.