"You have to pay cable operators roughly $5 or $6 a subscriber. And you need 30 million or 40 million subs to attract advertisers and have a viable business model. So, it would cost at least $150 million to $200 million," Baine said. And that doesn't include programming and infrastructure costs, he added.
Eisner, who expressed surprise at learning from a reporter that Weinstein was revisiting plans for the Miramax Channel, said he remains wary of the high cost of entry.
"Access is difficult, therefore it's very expensive," Eisner said. Miramax probably would have to rely on Disney's leverage with cable operators to pull it off, he said.
Disney used its powerful ESPN sports channel to launch SoapNet and Toon Disney and to expand the Disney Channel. A Miramax channel, Eisner said, would have to be a collaboration with ABC's cable holdings.
But, Baine said, the timing of that might be difficult. "Disney is not in a really great competitive position to launch new cable networks at this juncture....Disney used up a lot of goodwill with cable operators by raising its rates on ESPN."
Stressing that he is in the exploratory stages, Weinstein said, "A third-party investment we would consider strongly." One possibility, he said, would be Miramax and Disney forming a joint venture with a cable operator.
The most desirable partner could be Comcast Corp., which will become the nation's top cable provider if its proposed merger with AT&T Broadband is approved by federal regulators. Comcast is partners with Disney in the E! Entertainment Television cable channel. Weinstein's companion at last month's Academy Awards ceremony was Comcast President Brian Roberts.
Weinstein said there's no cable outlet that caters entirely to the hip, intelligent crowd he is seeking to serve.
His ideas for a Miramax Channel include a talk show, a news magazine and possibly a Friday night martial arts movie featuring his company's library of 120 imported Hong Kong flicks starring Jackie Chan, Jet Li and others.
Just as Fox Cable News, owned by News Corp. Chairman Rupert Murdoch, reflects conservative political viewpoints, the Miramax Channel "will be an expression of Harvey's democratic political philosophy and of a more tolerant lifestyle," said Hollywood agent Robert Newman, who has known Weinstein since working as his assistant 20 years ago.
"Harvey will have a clear editorial voice that's underrepresented in the cable universe," said Newman, noting that the venture is a natural extension of Weinstein's broad range of ambitions and interest in politics, journalism and philanthropy as well as theater and literature.
The emergence of his lower-profile brother, Bob, who is fast becoming a movie mogul in his own right from the success of Miramax's Dimension Films division, may be fueling Weinstein's already ego-charged competitiveness.
A recent interview with the two at the Peninsula Hotel in Beverly Hills revealed their fierce but loving sibling rivalry.
"Over the last six years Dimension has accounted for 65% of the profit of the company," which last year totaled $161 million, Bob Weinstein said. "I have a staff of 30 people and am putting five or six movies out a year. And we spend a lot less money" than the company's primary movie division.
It was the costly overhead on the Miramax side of the company, which employs more than 400 and puts out dozens of movies each year, that prompted the Weinsteins to lay off 17% of their work force last month. Only two of those laid off worked at Dimension.
"I also want to tell you something," Harvey Weinstein said, interrupting his brother. "Thirty-five percent of $161 million isn't chopped liver."
Winners and Losers at the Box Office
Miramax's low-cost acquisitions can be very profitable when they hit. "In the Bedroom," for which the company paid $1.5 million, and French import "Amelie," which cost $1 million, each will gross about $40 million domestically. "Bridget Jones's Diary," a co-production with Universal Pictures that cost $22 million, has grossed $280million worldwide.
Last year, Miramax also had a string of losers, the biggest being its $35-million screen adaptation of the Pulitzer Prize-winning "The Shipping News," which sank at the U.S. box office with less than $12million in receipts.
But Weinstein's biggest financial and personal black eye didn't happen at the box office. Talk magazine, the pet project he pitched four years ago to then-Editor Tina Brown of New Yorker magazine, became a high-profile casualty less than three years after its much ballyhooed launch.
When they decided to form the joint venture, Miramax and Hearst agreed to cap the total investment at $62 million. After each party lost $27 million, Hearst decided to pull the plug and cut its losses. Weinstein failed to find another partner.
