Harvey Weinstein relishes his status as the underdog mogul, championing maverick indies from “Pulp Fiction” to “The Artist.” But the larger-than-life impresario faces a daunting challenge that’s antithetical to the way he operates. In response to the increasingly tough financial strains on the independent film business, Weinstein is shrinking his outsized ambitions, and slashing the bloated overhead at the company he runs with his brother Bob. He will cut back on the very thing that earned him cred in the creative community: the movies.
In a surprising move that comes as a big blow to the indie film business, TWC will distribute fewer movies and increase focus on its TV operations, Variety has learned.
The studio will cut the number of films it releases from 18 a year to between eight and 10, according to a knowledgeable source. Instead of loading up on new titles at film festivals like Sundance or Toronto, the company is going to make fewer bets. It will snap up more projects at the script stage, as it did with the Michael Keaton film “The Founder,” to allow for hands-on development, rather than acquiring finished pictures.
|The Weinstein Co. is feeling the heat after several flops and the difficult market for small films.
Rafa Alvarez for Variety
Moving forward, TWC plans to bulk up its television business, aiming the unit to fuel roughly half of the company’s earnings. Presently, 30% of TWC’s revenue comes from TV shows it produces, such as Netflix’s “Marco Polo” and VH1’s “Mob Wives.”
The company is seeking partners for its TV business, following the collapse last May of a $950 million deal to sell the division to British broadcaster ITV. Insiders say that three or four parties are circling, and that a stake could be sold by early next year.
As a result of the difficult economic market for small films — and such flops as “Burnt” and “No Escape” — TWC has slashed payroll. Last week, it laid off 50 people from the 225-person company. Board member and advertising giant WPP pushed aggressively for the cuts, according to sources.
|Ups and Downs|
|TWC is already having a better year than last, even before “The Hateful Eight” release.|
|$283m||2015 B.O. through Nov. 22 for 12 films|
|$222m||2014 total B.O. for 19 films|
|$492||2013 total B.O. for 21 films|
“Our board has been on us to cut our overhead,” Weinstein told Variety. “And it’s a smart thing, but it hurts. Bob and I resisted the cuts for a few years because we still think of ourselves as a mom-and-pop organization. Maybe we need to grow up, but if this is the price of doing it, I hate growing up.”
Going forward, the multiplatform arm Radius-TWC will have its operations folded into the main studio with fewer employees. Radius founders Tom Quinn and Jason Janego left the company last summer to launch their own label, part of an executive exodus that includes marketing chief Stephen Bruno and TV head Meryl Poster.
Despite months of bad press, executives denied reports that the entire Weinstein company is being shopped around, with billionaire Ron Burkle as a potential buyer.
“Ron Burkle is an amazing business partner of ours, but there are no plans to sell him the Weinstein Co. at the present time,” said David Glasser, TWC chief operating officer.
Glasser vowed TWC would survive despite rumors of its financial doom. He also disputed ongoing speculation that the company is suffering cashflow concerns, and is not making money.
|“It becomes (a question): how to protect a company of this size so it can survive the cyclical nature of the business and be profitable?”
|COO David Glasser|
“We are an independent company — we’re not part of big conglomerate,” said Glasser. “We don’t have a TV station to fall back on. So it becomes: how to protect a company of this size so it can survive the cyclical nature of the business, and be profitable?”
Glasser, who in July said he would leave TWC, instead struck a new deal in September, and decided to stay. He was insistent with the Weinsteins about the need to tighten the company’s belt.
The board has been examining alternate scenarios for the company’s future. One option being weighed is to combine the television business with the company’s film library and on-demand operations and spin them off, possibly as a publicly traded entity. Also under discussion: merging the film studio with another media company. Some of these ideas are being debated by three new board members who have recently been brought on: hedge fund billionaire Paul Tudor Jones, investor Dirk Ziff and Cablevision CEO James Dolan.
Those who know Harvey Weinstein question if he can downsize. One source described an environment where he still uses private jets and round-the-clock town cars. But another insider said Weinstein cut his travel spending three years ago, at the board’s request, and pays personally for private plane trips.
Looking ahead at this year’s slate, the company has high hopes for “Carol,” which opened well in its first weekend of limited release.
|Weinstein Co.’s hits & Misses|
|The year started off with Oscar gold, but a few big bets fell flat. Last weekend, “Carol” opened well in four theaters.|
|The Imitation Game
B.O.: $91 million
Benedict Cumberbatch pic kept Harvey’s Oscar nom streak alive this year.
|The Woman in Gold
B.O.: $33 million
Helen Mirren’s appeal to older auds made this one of 2015’s biggest indies.
B.O. $13 million (in release)
The Bradley Cooper chef comedy bombed after a wide opening.
B.O. $16 million
Harvey plopped down $7 million for this musical directed by John Carney
Insiders say TWC needs Quentin Tarantino’s $62 million Western “Hateful Eight” to be a massive holiday hit. Harvey Weinstein denied reports that he was fuming at the director’s controversial statements last month that equated police shootings with murder. In response, law enforcement groups said they would boycott the film.
“Bob and I are getting along better than ever with Quentin,” Weinstein said. “I think he’s been misunderstood and misinterpreted. I respect his right to speak out for what he believes in, while at the same time respecting the sacrifices made every day by the overwhelming majority of our police officers. The two are not mutually exclusive.”