The bombshell New York Times report published Thursday detailing repeated claims of sexual harassment against Harvey Weinstein has created irreparable damage to the power producer’s personal reputation. But where that leaves his Weinstein Company, the independent studio behind Oscar winners “The King’s Speech” and the “Artist” and hit Lifetime series “Project Runway,” is less clear.
Weinstein is taking an indefinite leave of absence from his company, and his long-term status remains in limbo after a Thursday night emergency board meeting. And with the Weinstein Company gearing up for another awards season, the fallout could hardly come at a worse time, and an extended absence from the outspoken executive could be devastating for a studio that’s already dealing with significant headwinds in the film industry — and is trying to sell all or part of its TV business.
Ross Gerber, the president and CEO of wealth management firm Gerber Kawasaki and a close observer of the media ecosystem, said the fate of the business depends on that of its embattled leader.
“It depends on what happens to Harvey,” he told TheWrap. “The guy is a phenomenal picker of art.”
Gerber acknowledged the Weinstein Company library has some value, but investors determine prices based on future profitability. And without Harvey’s magic touch providing that differentiating factor (Brother Bob has focused more on commercial action films), the value of the whole enterprise could suffer.
“There is no company without both Weinstein brothers,” Gerber said. “Most of Hollywood is garbage.”
TheWrap reached out to The Weinstein Company for comment on this story, but did not hear back.
At least some portion of The Weinstein Company’s TV division has been on the selling block for years. Rewind just 12-24 months, and the idea would have been that Harvey stuck around to run things. After this week’s revelations, however, that seems likely to change — at least in the short term.
A prospectus from investment bank Moelis & Co. obtained by Deadline earlier this year shows a profitable TV business — but one highly dependent on “Project Runway.” According to that prospectus, TWC’s TV division earned a consolidated earnings before interest, taxes, depreciation and amortization (or EBITDA, a common measure of a business’ core profitability) of $31.6 million in 2015 with an estimated $50.6 million in 2016 and $75.2 million projected for 2017.
British TV giant ITV pulled out of a 2015 deal to acquire 100 percent of Weinstein’s TV business that would have valued the division at $950 million. But TWC also has a significant amount of leverage, including a $400 million revolving credit facility that was re-upped last year.
“They’re carrying an awful lot of debt,” one veteran content producer who has worked with The Weinstein Company on numerous projects told TheWrap about TWC’s TV division. “Who on earth would buy it right now?”
The crown jewel of TWC’s TV division has to be “Project Runway,” and almost by default. After all, Netflix’s pricey “Marco Polo” didn’t make it, BBC’s “War and Peace” is over, and History’s “Six” isn’t quite “Vikings.” Plus, “Runway” has already spawned a pair of spinoffs (cha-ching!), with more set to come.
Averaging north of 3 million total viewers per episode, “Project Runway” has been cable’s top competition reality series among women 25-54, which is Lifetime’s key demographic, each of the past three years. The A&E Entertainment-owned cable channel has been No. 1 in the show’s Thursday 9-10:30 p.m. time period that whole time among female TV viewers of that age range and the slightly younger demo, women 18-49.
The company does have some potentially exciting scripted series coming up, including Showtime’s “Guantanamo,” which will mark Oliver Stone’s scripted television-directing debut. Weinstein also has the Kevin Costner-starring “Yellowstone” set for the Paramount Network.
The buzziest of all though is “Mad Men” creator Matthew Weiner’s “The Romanoffs,” which is a Weinstein partnership with Amazon. “The Romanoffs” is a one-hour contemporary anthology series set around the globe featuring separate stories about people who believe themselves to be descendants of the Russian royal family. Weiner is set to direct all episodes.
Elsewhere, “Scream” is still alive at MTV, though that reboot is going through its own retooling for Season 4.
And its film business, where the Weinstein brothers first built their reputations, has struggled the last two years despite critically acclaimed movies like “Lion” and “The Founder.”
The Matthew McConaughey starrer “Gold” grossed just $7.3 million on an estimated $20 million budget. Of the independent distributor’s 25 highest grossing films, only one, “Lion,” was released after 2015.
Aside from TV and movies, TWC also owns a stake Weinstein Books as part of a joint venture with Perseus Book Group, which has since been acquired by French publishing giant Hachette. Earlier this year, the imprint signed a three book deal with “Morning Joe” co-host Mika Brzezinski, who refrained from explicitly criticizing the movie mogul on Friday’s broadcast.
But even as the cloud around Harvey Weinstein continues to grow, Gerber said he won’t be off the job too long. Too much money depends on it.
“My bet is Weinstein will be back,” he said. “He’ll be back abusing women in less than six months.”
Matt Donnelly contributed reporting to this article.