Disney and Miramax fill each other's needs, and feed the bottom line

It’s been 11 years since the Walt Disney Co. acquired upstart indie shingle Miramax Films. That marriage — once billed as a culture clash — has far exceeded expectations.

To be sure, like any marriage, there have been rough patches. But the alliance has been healthy economically and creatively. As 2005 approaches, Miramax toppers Harvey and Bob Weinstein will begin renegotiating their contract with the Mouse House, and both companies readily acknowledge what each brings to the table.

“Harvey and Bob Weinstein are a force of nature,” says Disney studio chief Dick Cook. “They are two of the most savvy and dynamic leaders in the business, and they continue to demonstrate an impeccable taste in material.

“Last year it was ‘Frida,’ ‘Chicago,’ and ‘Gangs of New York;’ this year films like ‘Cold Mountain’ and ‘Kill Bill’ are poised to continue Miramax’s success. They’ve raised the bar of intelligent, often challenging cinema, and that’s good for all of us.”

Adds Walt Disney Co. chairman Michael Eisner: “Harvey and Bob Weinstein’s unconventional approach to filmmaking and uncanny ability to attract top talent have combined to produce great films under the Miramax and Dimension banners that further enrich Disney’s valuable film library.”

From the onset, both companies saw in the other something they lacked: Disney carried too much overhead to profit from releasing lower-budget films; Miramax, a low-budget specialist, wanted the security of deep pockets behind it.

In 1993, Disney acquired Miramax for $60 million (later escalated to $80 million) in a complex deal that included cash and stock. Since then, Disney has watched Miramax profits rise every year. According to published reports, Miramax is worth an estimated $3 billion. A source close to Miramax says profits for 2002 will be the highest in the company’s history, citing the more than $300 million in box office receipts for “Chicago.”

Miramax’s Dimension, a genre label spearheaded by Bob, has generated more than $518 million worldwide for the “Scream” franchise alone.

It all started as a marriage of convenience: Prior to joining with Disney, Miramax had sub-licensed video rights in North America and, on occasion, television packages. The Disney alliance gave the young shingle a guaranteed distributor for these lucrative ancillary rights. From the Disney perspective, its vid division gained access to Miramax’s lucrative library, giving it the kind of product diversity that it lacked in its Disney, Touchstone and Hollywood Pictures output.

The setup was similar on the international end. Once aligned with the Mouse machine, Miramax could distribute directly through Buena Vista Intl. instead of searching for and paying out fees to foreign subdistribs.

Miramax clearly also benefits from its relationship with Disney’s corporate family when it comes to promoting new Miramax films on the Disney-owned ABC talk shows. Nearly all of the central cast of Quentin Tarantino’s “Kill Bill, Vol. 1,” for example, appeared on ABC’s “Good Morning America” prior to the film’s release on Oct. 10.

Whatever rumors have swirled around the reportedly contentious relationship between Bob and Harvey Weisntein, and corporate overlord Michael Eisner, on the surface they’re one big happy family.

“Michael Eisner continues to make stellar contributions to the movie industry,” say the Weinsteins in a joint statement. “His leadership and passion for film have truly inspired those around him, which can be seen in his teaming of Dick Cook and Nina Jacobson who have done a fantastic job with Disney’s productions, especially this year’s string of hits.”

Miramax of course has not only added cash, but also cachet to the Disney profile. Mouse House relies on the Weinsteins’ impeccable taste for projects that attract top talent to movies that resonate with Oscar voters: films with a romantic sweep, style and grandiosity reminiscent of the movies Hollywood’s 1930s and ’40s; and, in the case of filmmakers like Tarantino, the kind of hipster edge not often found inhouse at Disney.

Miramax’s run at the Oscars is virtually unprecedented among modern studios. The company has had at least one best picture nom every year while with Disney. Earlier this year, Miramax movies were nominated for 40 Oscars including 13 for “Chicago,” 10 for “Gangs of New York” and nine for “The Hours” (a Paramount co-production).

One recent sign that the Mouse fully appreciates Miramax’s Oscar touch: the company issued a memo to investors praising the company’s overall 44 Oscar noms and singling out Miramax for scoring the lion’s share.

In total, Miramax has been nominated for 214 Academy Awards and has was won 52 — including best picture kudos for “The English Patient,” “Shakespeare in Love” and “Chicago.”

This year’s clutch of likely Miramax Oscar contenders includes two films based on highly praised works of fiction: “Cold Mountain,” from Charles Frazier’s book, and “The Human Stain,” based on a Phillip Roth novel. Another film with an outside chance to bring home some Oscar gold is 2003 Sundance audience award honoree “The Station Agent.”

One reason the marriage works so well is that Disney has always given the Weinsteins the autonomy to select movies and make them their way. The original deal, however, stipulated against NC-17 films, and Miramax has stuck adamantly to that dictum.

In the early days with Disney, the Miramax slate veered toward foreign-lingo gems such as “Farewell, My Concubine,” “Il Postino,” foreign-language Oscar winner “Kolya” and quirky classics like Tarantino’s “Pulp Fiction” and “My Left Foot.”

But Miramax’s interest in an increasingly wide range of films has led the studio to pursue some higher-budgeted movies including “Gangs” and the forthcoming “Cold Mountain,” starring Jude Law, Renee Zellweger and Nicole Kidman; and “Master and Commander,” starring Russell Crowe, a co-production with Fox and Universal. This drive toward tentpoles is one likely issue that will be discussed when Disney renegotiates its contract with Miramax.

Disney allows Miramax a $700 million annual production and marketing budget. Original terms of the deal stipulated that Miramax be given free reign on pictures costing up to $30 million, but that agreement isn’t ironclad. For example, “Kill Bill” was one clear exception: it cost Miramax an estimated $55 million — money spent before the studio elected to split the project into two separate movies. In other instances when the company has pre-sold territories or otherwise alleviated risk through co-financing, budgets have also gone much higher than the $30 cap. The Weinsteins also have been free to make their larger films in conjunction with other studios and finance sources.

“Cold Mountain,” for example, cost an estimated $82 million; it was to be made in conjunction with MGM until the Lion backed out. When Disney declined to step in for a financial stake in the film, Miramax elected to finance the film solo, with no hard feelings between the partners. However, Miramax is sharing the hefty “Master and Commander” pricetag with Fox and Universal, and the pricey Martin Scorsese-helmed “The Aviator” with Warner Bros. and Initial Entertainment Group.

“Yes, they’re interested in making these larger tentpole films,” says a source close to Miramax, “but the important thing for Disney and for Miramax is that they haven’t lost sight of the smaller- and midbudgeted films that have consistently made them a successful company, both artistically and financially.”

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