Weinsteins Face Life After Disney
After years of flying in private jets on Disney's dime, of wielding Disney's clout and of dipping into Disney's very deep pockets, Harvey and Bob Weinstein now have what they say they wanted: freedom from the constraints imposed by a global media conglomerate.
But unless they impose some restrictions on their spending, not to mention yelling, many say the tempestuous brothers may have trouble duplicating the kind of success they enjoyed at Disney.
The Weinsteins, whose contract with parent Walt Disney Co. expires in September, have six months to firm up plans for what they described Tuesday as a "fully integrated media company." They appear to have their work cut out for them. Among the things the duo lacks are a marquee name (Miramax Film Corp. stays with Disney), a staff (top Miramax people have been jumping ship for weeks) and a film library to fuel cash flow.
"Clearly, they've had enormous financial flexibility under the Disney umbrella, which is not likely to continue no matter how they design their independent company," said Jeffrey Logsdon, an analyst with Harris Nesbitt.
Under the terms of a long-awaited settlement announced Tuesday, the Weinsteins will continue to have a relationship with Disney on individual projects -- at Disney's discretion. In fact, the Weinsteins' new company will start with six movies that Disney has agreed to co-finance, including "Scary Movie 4." The Weinsteins are hoping that ties to Disney will help them snag investors for 10 or so other projects, including "Derailed," starring Jennifer Aniston and Clive Owen, and director Anthony Minghella's "Breaking and Entering." So they're not starting from scratch.
But to achieve their higher ambitions of creating a self-standing company that also reaches into television, publishing and the Internet, it will take considerable funding.
No longer can the Weinsteins rely on the $700-million allowance that Disney doled out each year for them to acquire, distribute and market films. When Disney bought Miramax in 1993, the Burbank company used its considerable clout and relationships with video wholesalers around the country to open up new markets for Miramax's quirky and often controversial art house movies, particularly in the Midwest. This also helped establish the Miramax brand outside New York and Los Angeles.
The brothers also will no longer be able to exploit Disney's international reach to distribute and market DVDs, Hollywood's fastest-growing revenue source.
