Goldman Sachs selling stake in 200 TWC titles
“The Road,” “Vicky Christina Barcelona” and as many as 200 other films may be headed back to the Weinstein Co.Goldman Sachs is selling its stake in a portfolio of the TWC films, including the 2009 “Halloween II” and “Scary Movie 4,” which the global investment bank took control of in 2010 as part of a massive financial restructuring of the Weinstein Co. Now, with Goldman’s debt off its books, new backers and Quentin Tarantino’s highly anticipated “Django Unchained” upcoming, the Weinstein Co. is prepping its bid to buy back the library. Reacquisition would allow TWC to start profiting from those movies again, and a larger library would mean a stronger borrowing base for future transactions, as well as an opportunity for future licensing agreements combined with TWC’s current library of more than 150 titles. The company has been servicing the library and its various licensing agreements, while Goldman has kept the money the films generated as repayment for a 2005 loan. Not all of the films received a theatrical release, but TWC inked ancillary deals to generate revenue. Under the terms of the 2010 agreement, the movies could return to the Weinsteins once Goldman recouped its money; the bank helped launch TWC by raising $1.2 billion. TWC has had the right of first refusal to buy back those movies before that point, however, should Goldman want to sell. And while Goldman isn’t in a rush to unload the asset, the bank has been quietly gauging interest in the movies for the past few months, exchanging complicated non-disclosure agreements with potential investors for a glimpse at the portfolio that includes pics “Vicky Cristina Barcelona,” “Mrs. Henderson Presents,” “Derailed,” “1408″ and “The Road.” But since TWC has the right to manage the library for the next five years, other buyers would have difficulty exploiting the assets without partnering with the distrib. TWC has been busy prepping its own bid, which it expects to submit within the next few weeks. Library has already generated more than $100 million since transferring to Goldman, according to multiple sources familiar with the portfolio, and one source estimates that the bank would be seeking $100 million-$150 million for the asset. Goldman helped Bob and Harvey Weinstein raise $1.2 billion to launch the Weinstein Co. in 2005, including $500 million in securitized debt. The move followed the brothers’ contentious separation from Disney, and both were eager to expand TWC beyond film. But the Weinsteins followed TWC’s launch with a series of misfires. At $90 million worldwide, “Scary Movie 4″ marked the company’s highest-grossing release until the boffo “Inglourious Basterds” in 2009. TWC became more active in acquiring films than making them. “I think I took my eye off the ball,” Harvey Weinstein told Vanity Fair in an interview last year. Instead, the company seemed more interested in spending its new capital outside the film biz, scooping up stakes in elite social networking site A Small World and the Halston fashion house. TWC’s attempt to remake itself into a cross-platform empire floundered, and by the time the recession hit in 2008, the company had used up most of its credit facility and was on the hook for tens of millions of dollars in interest annually. TWC has since sold both assets. So Goldman and major lender Assured Guaranty, an insurance company, struck a deal with TWC. The former two companies would take control of the films, which helped erase millions of dollars in debt from TWC’s books. Library revenue was expected to generate $233 million in 4½ years, according to reports at the time. When those revenues and other repayments totalled $335 million for Goldman, according to those reports, film rights could transfer back to TWC. Since then, the Weinstein Co. has refocused its filmmaking energy. TWC had two of its biggest successes with prestige fare “The Artist” and “The King’s Speech,” which saw domestic grosses of $45 million and $139 million, respectively. The two films won the best picture Oscar in 2010 and 2011, harking back to the Weinsteins’ Oscar-winning Miramax heyday. Tarantino’s “Basterds,” whose revenues were not part of the Goldman/Assured deal, grossed $120.5 million domestically. And while TWC’s post-restructuring lineup included a couple of underperformers, the company released well-received “My Week With Marilyn” and “Iron Lady.” “Lady,” an acquisition, earned $30 million domestically. This December, TWC will unspool Tarantino’s “Django Unchained,” an auteur-driven commercial pic starring Leonardo DiCaprio and Jamie Foxx. Also on the calendar are Paul Thomas Anderson’s “The Master,” David O. Russell’s “Silver Linings Playbook” and Tom Hardy-toplined “Lawless.” TWC also formed multiplatform release label Radius-TWC earlier this year. Investors are paying attention. In June, TWC secured $75 million through lender UBS, while Union Bank raised $150 million for the company at the beginning of this year. That coin enabled TWC to pay Goldman $40 million, the last remaining hunk of debt on the company’s balance sheet, leaving the portfolio of films as the last major tie between the two companies.
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