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Miramax Chief Channeling Energies Into Cable

Media: Undaunted by the failure of his magazine, Harvey Weinstein is craving another challenge.


Despite shedding 75 employees, dropping $27 million on a failed magazine venture and losing 40 pounds on a crash diet, Miramax Films co-Chairman Harvey Weinstein still has a ferocious appetite to get bigger.

On the heels of the worst financial and personal setback of his professional career--the collapse of Talk magazine--Weinstein already is craving another challenging and costly endeavor: launching a cable television channel.

"In the next two years, there will be a full-court effort on our part to the Miramax Channel," Weinstein said. "It's a No. 1 priority."

Considered one of the most competitive, controversial and, by his own admission, "brusque and arrogant" impresarios on the independent movie scene, Weinstein, 50, has been bent on building a media empire on the back of the maverick art-house movie company he and his younger brother, Bob Weinstein, founded 22 years ago in New York.

For years, Harvey Weinstein--who is as cozy with the Clintons as he is with the Kidmans and Jaggers of the world--has hungered to be more than a movie tycoon. In recent years he has made personal and company investments in Broadway shows and in chic restaurants in New York, Los Angeles and Martha's Vineyard, Mass., where he has a vacation home.

The menu of choices in the media business is as enticing to the voracious Weinstein as junk food.

"If I can give up M&Ms and lose 40 pounds, then building a business and going in all these directions is no sweat."

Even though the Queens, N.Y.-born brothers sold their company to Walt Disney Co. in 1993, they've enjoyed the freedom to run their own show. Miramax's record at the box office has given the Weinsteins the leverage to expand beyond cinema with Disney's blessing.

Forays into such offshoot businesses as magazine publishing and television production have been busts. One promising enterprise is Talk Miramax Books, which has produced seven bestsellers since its launch three years ago.

"A failure here and there is OK," said Disney Chairman Michael Eisner, referring to the washout of Talk magazine, Miramax's ill-fated joint venture with Hearst Magazines. "If you don't allow creative people like Harvey to spread his wings, you lose the essence of who they are."

The cable channel is Weinstein's latest attempt to exploit Miramax's 500-title library and brand name, which is synonymous with offbeat movies that include last year's edgy "In the Bedroom" and stylish French import "Amelie" and previous breakout art-house hits such as "Pulp Fiction," "The Crying Game" and "sex, lies and videotape."

The company's 8-year-old mainstream movie label, Dimension Films, has lifted Miramax's status from strictly art house to major studio with commercial hits such as "Spy Kids," "The Others" and the "Scary Movie" and "Scream" series.

As Weinstein envisions it, the Miramax Channel would be more than just another independent movie channel joining the ranks of Sundance Channel, a venture of Robert Redford, Viacom Inc.'s Showtime Networks and Universal Studios, and the Independent Film Channel and Bravo, both owned by Rainbow Media Holdings and controlled by Cablevision Systems Corp.

Cable Channel Would Be a Valuable Asset

"It would be different because it would be lifestyle plus movies," Weinstein said. The channel would target Miramax devotees--a niche audience of affluent 21- to 49-year-olds who are as interested in fashion, travel, news and politics as the latest independent movie hit.

Conceptually, Eisner said, he too is a huge proponent of the idea. "Miramax is the only brand in the movie business other than Disney," he said. "And, I think the Miramax brand can be even more significant than it is today."

Lisbeth Barron, a Bear Stearns partner in charge of the entertainment investment banking group, said that if the Miramax Channel is successful it will be a highly valuable asset.

"Cable networks typically have margins of about 40%," Barron said. "For the past two decades ... the most sought-after assets are music publishing companies and cable networks," she said, citing such cable sales as Fox Family Channel, which was bought by Disney for $5.2 billion, and BET, for which Viacom paid $2.7 billion.

This is not the first time Weinstein has considered launching his own channel. Eisner proposed the idea about five years ago, but it was nixed after Disney's strategic planners concluded that a shortage of space on cable systems would make it too difficult and costly to get the new channel carried.

Media analysts say that the challenges of launching a cable channel today are equally as onerous and expensive.

Access to Basic Cable Comes at High Price

"Getting on basic cable is nearly impossible unless you have hundreds of millions of dollars," said Derek Baine, senior analyst with Kagan World Media.

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