After a spate of dealmaking, Weinstein startup lays groundwork to go public
The Weinstein Co. is a year old, and the biggest news about the hyperactive brothers so far hasn’t been about what they’ve done, but what they haven’t.
They haven’t spent $100 million on a pic, they haven’t bid in a pricey Internet auction, they haven’t crisscrossed the globe in corporate jets and they haven’t gotten into arguments with shareholders.
After loudly splitting from Disney and their Miramax label a year ago and raising more than a billion dollars in financing, they’ve been relatively quiet. To their major investors, quiet is good.
“It’s quiet in that we have good relationships across the board,” Harvey Weinstein says. “Nobody’s throwing stones at anybody.”
But Harvey and Bob Weinstein have some important accomplishments under their belt in year one.
While their slate in 2006 has not been stellar, the movies have grossed $268 million, enough to rank above all other indies and studio specialty labels in domestic market share. Competitors are quick to point out that some of the pics were distributed by MGM or co-owned by the Mouse House.
They’ve also fulfilled their pledge to become what they call “a boutique multimedia company,” with ventures into the video business, the Internet and a newly signed deal to bring its book imprint to Hachette’s Little, Brown and Warner Books labels. The deal replaces the Weinsteins’ previous connection with Disney’s Hyperion label.
And those connected to the company confirm they plan to go public, perhaps as early as next year.
Tarak Ben Ammar, one of the company’s investors and board members, says he sees “a very successful IPO” two years off. “If we went public today, we already have a great track record,” he says.
Perhaps more than any other film company, Miramax had such a specific personality, shaped by the brothers’ eclectic tastes and brash personas, that their new look has thrown the industry for a loop.
Although the Weinsteins have found success with films like “Scary Movie 4” and “Hoodwinked,” and say that 13 of their 14 releases have turned a profit, their startup has yet to have the impact Miramax did.
Some in town wonder if they are spreading themselves too thin and losing sight of their core business of releasing movies.
“Year one was about building infrastructure and laying the groundwork to build an international distribution system,” Harvey Weinstein says. In 2007, he says, when they release a slate of pics that includes “Hannibal Rising” and “The Nanny Diaries,” “you will see what the company will look like moviewise.”
After officially severing ties with the Walt Disney Co., the Weinsteins set out to become a fully integrated media company. The move to split from their corporate owner followed a protracted period of acrimony with then-CEO Michael Eisner.
With their own company, they’ve avoided those public squabbles.
Says another Weinstein Co. board member: “They have done all of the things that they were supposed to do. They didn’t make $150-million movies. They’ve been careful about keeping costs under control.”
What they have done is make smaller buys that get them into far-flung corners of the media business. They recently took a stake in culture cable net Ovation. Instead of linking with a major homevid distributor, they have developed their own distribution arm by acquiring a majority stake in Genius Products. The Genius pact didn’t require a major cash outlay, but rather the promise that TWC’s library would significantly bulk up the label and turn it into an indie player.
A new homevid label, Dragon Dynasty, just shipped its first title, “Killzone.” Weinstein sees the label as a “Criterion Collection for the martial arts world, with Quentin Tarantino as its curator.”
With a stake in online community aSmallWorld, they plan to promote pics the way Fox is doing with MySpace. The Hachette deal will see the Weinsteins putting out 15 titles annually through the publisher’s labels.
Investors maintain such deals have been low-risk ways to extend the TWC brand, as none has exceeded the $5 million mark.
“They’ll make a lot of noise about aSmallWorld or Ovation,” says one person close to the company, “but the investments in these companies are tiny. They’ve just been focused on making movies.”
Among the projects the company is pursuing are ones from such Miramax vets as Tarantino, Rob Marshall and Anthony Minghella.
On the film side, a key strategy has been to create partnerships with foreign players.
The company has just signed a pact for UIP to roll out as many as eight pics per year in the U.K., with the remaining films being handled by distributor Momentum. That will join an output deal with MGM to distribute some films domestically. This fall, the Weinstein Co. plans to start an Asian film fund, adding to a Latin American film fund and a partnership with former BET CEO Robert Johnson on an urban pic label.
The year they’ve been in business also has made them more sanguine about Disney.
“A lot of vitriol came from being locked in a battle with someone who didn’t want you there,” Harvey Weinstein says of Eisner. “There was definitely a personal conflict. Bob Iger cleaned all that up and everyone’s gotten a second lease on life.”