Weinsteins hand over titles in debt restructuring deal
Describing it as a “fresh start,” Bob and Harvey Weinstein’s struggling company has finalized a major debt restructuring that forgoes ownership of more than 200 library titles in exchange for wiping away at least $450 million in debt.The Weinstein brothers, determined to keep the Weinstein Co. afloat, struck the deal with Goldman Sachs Group and Assured Guaranty. In addition to taking ownership of the library titles, Goldman will also receive revenues from certain upcoming films distributed by TWC. Pact capped a busy week for a handful of key Hollywood companies fighting for their future. Among the moving parts, word broke that production and financing company Spyglass Entertainment is vying to run MGM, whose creditors are trying to find a way to cut their losses, and that Lionsgate also is back in the running for a possibly merger with the Lion. A roadblock for Lions-gate is Carl Icahn, who now owns 32% of its stock. He was critical of an MGM merger in the past, although insiders say he’d now be amenable to an MGM/Lions-gate merger for the right price. Several bidders also continue to circle Overture Films, including Alec and Tom Gores, according to those familiar with the negotiations. Overture is part of the Liberty Corp.-owned Starz Media, which also includes homevid subsid Anchor Bay. Disney-owned Miramax, which is currently a library and not a distribution operation, also remains for sale. Whether the debt restructuring clears the decks for the Weinstein brothers to make another play for Miramax is unclear. One issue before had been TWC investors. On Wednesday, a Wisconsin court approved a settlement that released Ambac Financial Group, which is also undergoing restructuring, from insuring TWC’s debt in exchange for paying debtholders $115 million in cash and notes, which goes to Goldman Sachs. (Goldman made the initial investment in TWC.) That reduced TWC’s debt load from $450 million to $335 million, eliminating interest payments of about $30 million a year. Debt was further reduced in giving Goldman ownership of the movie titles and about $233 million in receivables on those movies. TWC will be paid to manage the movies and can buy them back starting in 2016. Titles included in the library part of the deal are “Halloween II,” “Vicky Cristina Barcelona,” “Mrs. Henderson Presents,” “Derailed,” “1408” and “The Road.” Goldman will get a “small slice” of a few upcoming films such as “Piranha 3-D,” according to TWC distribution topper David Glasser. “This is going to be a nice fresh start for us and enable Bob and Harvey to focus on what they do best — making films,” Glasser told Daily Variety. He said the deal’s formal announcement should come in a few days. There were reports that Goldman will provide TWC with a $100 million production fund. Terms call for TWC to continue to distribute the library titles but with the revenues from the designated films going to TWC’s debtholders. The films transferred to Goldman Sachs and Assured are expected to bring in $233 million over the next 4 1/2 years. The TWC deal with Goldman and Assured comes a month after TWC and investor Ron Burkle were unable to complete a deal with Disney to acquire the Miramax library of 600-plus titles. The sides had been in serious talks for six weeks on a complex $625 million deal, but numerous obstacles prevented the pact’s completion. Harvey and Bob Weinstein brothers launched Weinstein Co. in 2005 after parting ways with Disney, which bought Miramax in 1993. TWC scored last year with Quentin Tarantino’s “Inglourious Basterds,” which has earned $120 million domestically and $193 million overseas (TWC shares distribution duties on the title with Universal). But its musical “Nine” took in only $54 million worldwide. The next TWC titles, docu “The Tillman Story” and “Piranha 3-D,” will open in August. Fourth quarter releases are set to include “Blue Valentine,” “The King’s Speech” and John Wells’ downsizing drama “Company Men.” TWC recently wrapped on Jennifer Garner comedy “Butter”; it’s been prepping “Scream 4″ with Wes Craven directing and Courteney Cox, David Arquette and Neve Campbell returning.
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