The Starz Media deal is the first acquisition for Weinstein Co. since its… (Laurie Sparham, Associated…)
Weinstein Co. is getting into the home entertainment business — again.
Bob and Harvey Weinstein's New York-based independent film studio has agreed to acquire 25% of Starz Media, the home entertainment division of mogul John Malone's Liberty Media Corp., for an undisclosed sum. The arrangement includes a five-year distribution deal under which Starz's Anchor Bay Entertainment will release new Weinstein Co. films on DVD and Starz Digital Media will handle online downloads and streaming.
The agreement with the Weinsteins resolves the question of what Liberty would do with its home entertainment assets after Malone last year unsuccessfully tried to sell them along with his independent movie studio Overture Films, which was closed last summer.
Financial terms of the new partnership were not disclosed, but a person familiar with the matter said Weinstein Co. paid cash for the minority stake. It is the first acquisition for the independent film studio run by brothers Bob and Harvey Weinstein since they restructured the company's finances in June to wipe out $450 million in debt and slimmed down its operations.
In 2006, Weinstein Co. acquired a 70% stake in home-entertainment company Genius Products Inc., a deal that went sour as the DVD market shrank. In 2009, Genius was bought by a group of investors who saved it from bankruptcy. Harvey Weinstein has admitted that Genius was a bad investment and that he was ill-prepared to help run a home-entertainment company.
Under the new deal, Anchor Bay President Bill Clark will remain in his post and Weinstein Co. executives will serve in only an advisory role.
"This is different because we're more mature now and we're not creating this from the ground level," Weinstein said. "With Genius, Bob and I made a lot of mistakes. But with the structure already in place, we won't do that again."
Although it talked with various Hollywood studios about signing a DVD distribution deal, Weinstein Co. ultimately signed a deal with the smaller Anchor Bay, where it would be the only major supplier, making its content a higher priority. The studio's previous home-entertainment deal with Sony Pictures expired in September.
Chris Albrecht, chief executive of Starz, said he hoped the partnership with the Weinsteins would help put his company's home entertainment unit on a successful path in a difficult market.
"We look at Harvey and Bob as a magnet for other top-quality filmmakers and production companies," he said. "There may be a contraction in the DVD business as a whole, but we see great possibilities for Anchor Bay."
Weinstein said his studio may partner with Anchor Bay to acquire the rights to films.
The deal does not include television rights for Weinstein Co. movies on Liberty's Starz channel. The studio has a pay-TV distribution agreement with Showtime that runs through 2014.
The first Weinstein movie to be released on DVD and for digital download by Anchor Bay will be its potential Oscar contender, "The King's Speech," which is in theaters and expected to come out in home video in the spring.
The Weinsteins' existing library of 108 films will continue to be distributed on DVD and digitally by Vivendi Entertainment and Sony.