Weinsteins Circle Back to Buy Miramax From Disney

Exclusive: Two hedge funds want to team up with the brothers for a final curtain call on the indie drama

In what may be the final dramatic twist for Miramax, the Weinstein brothers are circling their old studio with an eye to buying it back from the Walt Disney Company.

Two hedge funds have approached brothers Harvey and Bob Weinstein about teaming up to buy the studio, according to an individual with knowledge of the plan.

 

Such a deal would make some sense. The studio has gone into decline since the Weinsteins parted ways with Disney in 2005, and the parent company has shown little enthusiasm or acumen for capturing the magic that brought indelible films like “The English Patient,” “Pulp Fiction” and “Shakespeare in Love” to American culture.

The Weinstein brothers founded Miramax in 1979 and sold it to Disney in 1993. They parted ways in 2005 and have since formed the Weinstein Company, an independent studio that has struggled financially but garnered 13 Oscar nominations on Tuesday for movies including “Inglourious Basterds” and “Nine.”

The names of the hedge funds were not available.

For the brothers, a purchase would feel like some kind of final justice for a company that they named after their parents. But others are showing interest, too.

WaxWord reported this week that Summit Entertainment, Relativity Media, Studio Canal and billionaire Nelson Peltz were all among those showing interest in the studio with a library of 700 fims, but found the $700 million asking price too high.

“Here’s the issue everyone’s having: What do you do with the rights?” said one person interested in the deal. “Other than Harvey Weinstein, who knows how to do ‘Inglourious Basterds’?”

Under the expected terms of the deal, Disney would continue to run the library for a year after any purchase, but would then turn it over to the new owner for monetization. The new owner would have to strike a new set of output deals. 

A Disney executive said they had no knowledge of the Weinstein brothers’ interest, but that in principle, despite the brutal divorce, saw no obstacle to them buying the studio.

One insider close to the deal said that the library produces about $300 million in annual revenue. But others who have looked at Disney’s financial information insisted that it was closer to $100 million.

One former Miramax executive said that a $300 million annual revenue figure seemed impossible.

“In the old days it was doing $85 million in a good year,” said the former executive.    

The hedge funds have individually reached out to the Weinsteins, who still retain rights over many key properties that are owned by Miramax at Disney. The Weinsteins are making “Spy Kids 4,” for example, as well as a new “Scream” project, whose rights they will share with Disney. The Weinstein Company is also working on a stage version of "Neverland."

But the value of the Miramax brand is under scrutiny by all those interested in a potential purchase.

One individual approached about a sale said that Disney had last year made it known that Miramax was for sale for about $1.2 billion but found no buyers at that price.

The Weinstein Company has just come through a financial restructuring that put the company on more solid ground, although its future is far from guaranteed.

Previously: Disney Tries to Sell Miramax — But What’s the Library Worth?