Imagine Harvey Weinstein having to explain his business decisions to Wall Street on a quarterly basis.
“I just don’t see it,” said media analyst Hal Vogel. “It would be fraught with friction considering he’s not known to be the friendliest of people when it comes to investors poking into his business.”
The Weinstein Co. is a well-established indie operation known for its acquisition, production and marketing chops, awards season campaigning and “the Harvey factor,” the gut instincts and naked aggression displayed by the company’s co-chairman when making crucial decisions on his projects.
On Wednesday the New York Times first reported that the Weinstein Co. was considering spinning off its television division into a public entity, the most recent news of a long-touted prospect. But analysts and bankers alike told Variety that possibility is incredibly slim with or without its namesake co-chairman at the head.
“They may be using that as a foil to increase valuation for a private partner,” Vogel added.
It’s not at all accidental that news of Harvey Weinstein looking to shop around for investment banking firms comes on the eve of the Sun Valley Allen & Co. conference, where it appears he may be floating a trial balloon.
A banker with knowledge of the situation, who declined to speak on the record, said if the company were to go public he would not be surprised if it was listed in Asia, which provides higher multiples than U.S. markets.
But, said the banker, it’s challenging enough to take an entire company public, let alone just a portion, since the operations are intertwined.
In addition to attracting a potential investor, a more feasible reason for proposing the idea of going public is that the very suggestion of doing so could also lay the groundwork to spin the TV division into a separate but still privately held company. If that were the case, Weinstein could secure the funds to expand the television division, investing in networks and projects while sharing the risk.
David Glasser, COO of the 8-year-old Weinstein Co., told Variety Wednesday that the company has 22 reality shows, seven scripted series either on the air or in production along with a handful of projects in development. On Thursday, a company spokesman said the list includes the on-air shows “Project Runway,” “Project Runway All Stars,” “Mob Wives,” “Rodeo Girls,” “Million Dollar Shoppers” and the upcoming programs “Threads” (Lifetime),” “Marco Polo” (Netflix); “Ten Commandments”(WGN), “Scream” (MTV) and “War and Peace” (BBC).
In its TV business, the company functions largely as producers for hire. The number of shows the company actually owns will dictate its worth. Also, many of TWC’s projects have to yet to be aired or scheduled.
Weinstein Co. began investing heavily in TV in late 2013 to diversify beyond its core movie business. The majority of TWC’s TV assets are in smaller cable reality shows, however, which don’t have much syndication value.
During its early years, the company faltered in its expansion plans, acquiring a majority stake in Genius, a publicly-traded home video distribution company that ultimately failed, as well as a controlling stake in the social network ASmallWorld. Weinstein no longer has ownership of either company.
When Miramax, founded by Harvey and Bob Weinstein in 1979, was purchased for $60 million by Disney in 1993, the brothers were never subjected to the quarterly earnings reports and analysts calls that come with being a public company. Miramax was operated as an autonomous subsidiary under the New York-based siblings, who left in 2005 after a nasty divorce with Disney and subsequently founded TWC.