Be careful what you wish for, Harvey.
For months, Miramax Film Corp. honcho Harvey Weinstein has been telling his industry friends that he can't wait to get out from under Walt Disney Co. He has complained that for all of Disney's resources, the company led by Chief Executive Michael Eisner is too rigid and restrictive to be a good creative partner.
But as talks about extending Miramax's relationship with its corporate parent have foundered, the prospect of life after Disney may not be as bright as Weinstein and his brother Bob once hoped. Even if they can find private investors to bankroll a new venture, many say, it seems unlikely that life outside the Magic Kingdom will be better than life inside.
"It's difficult to envision the Weinsteins finding the resources or capital that would give them the same financial flexibility that they've had," said media analyst Jeffrey Logsdon. Though the brothers will surely lure some investors, Logsdon said a recent press report suggesting that they could easily raise $1 billion to create their own production company "defies financial logic."
To assess what the future might hold, the Weinsteins have engaged in talks with such investment banking houses as Goldman Sachs and Lehman Bros. as well as private equity firm Blackstone Group. Although prohibited from entering into any formal agreements before resolving Miramax's deal with Disney, Harvey Weinstein has been promoting the idea of an independent start-up with the kind of bravado he uses to wage his Oscar campaigns.
But some analysts and deal makers say that despite the brothers' track record of award-winning hits, including "Chicago" and "Shakespeare in Love," the hype is getting ahead of the reality.
In recent weeks, Disney put the Weinsteins on notice that their current employment contracts would not be renewed under the existing financial terms when they expired next September. That leaves open the possibility that a new deal could be struck. But sources close to both parties say the chances are slim.
More likely, they say, is a settlement agreement that would end the Weinsteins' 11-year partnership with Disney for good.
The Disney board, which has rejected the Weinsteins' requests to present their case, is expected to address the company's relationship with Miramax at a meeting this month.
A source close to the board said Disney directors "have grown increasingly unhappy with [the Weinsteins'] financial performance and behavior."
