Weinstein Co. buys stake in Starz Media

Deal encompasses homevid/digital distrib pact with Anchor Bay

Harvey and Bob Weinstein are wasting no time bemoaning the loss of the Miramax auction last year, with the brothers announcing Tuesday the Weinstein Co. has purchased a 25% stake in John Malone’s Starz Media that includes DVD distributor Anchor Bay Entertainment.

The deal, whose financials were not disclosed, covers Blu-ray, DVD, VOD, pay-per-view and digital distribution for up to 20 TWC and Dimension titles per year for five years. That will include “The King’s Speech,” “Blue Valentine” and “Company Men.” TWC’s previous homevid distrib deal with Sony expired in September. The partnership does not include an output component to show films from The Weinstein Co. on pay cabler Starz, which is a separate entity from Liberty’s Starz Media. TWC’s pay TV deal with Showtime runs through its 2014 theatrical releases.

“The distribution agreement leverages the scale of the strong Anchor Bay home entertainment business and the Starz Digital Media distribution platform. The Weinstein Company new release content is a quality addition to our distribution pipeline of new releases from Anchor Bay Films and Starz Originals,” said Starz CEO Chris Albrecht. “Harvey and Bob Weinstein are terrific business partners and we are very pleased to have them as part of Starz Media.”

The Weinsteins sought to buy an even larger stake in Starz Media but Malone was unwilling to sell them more than 25%, at least for now. Still, the deal gives the Weinsteins a foothold in a company that some have speculated will eventually be put on the block by Malone. It currently trades as a tracking stock of Liberty Media.

“We are thrilled to partner with Starz and appreciate the commitment of Liberty Media in bolstering Anchor Bay, allowing it to become a much bigger player in non-theatrical distribution,” said the Weinsteins in a statement. “We hope this strategic partnership is a first step in not only making Anchor Bay a home for our product, but in potentially housing other companies’ product as well, giving quality independent films the kind of care needed in today’s marketplace.”

“This is an opportunity that excited us, especially given the strong management team and infrastructure at Starz,” added TWC chief operating officer David Glasser. “It’s a smart, forward-looking partnership.”

Liberty Media recently downsized some of its film properties, selling the distribution arm of Overture Films in July to Ryan Kavanaugh’s Relativity Media and in October it unloaded its Film Roman animation house.

The TWC deal comes as Starz is preparing to negotiate a new deal with Netflix to stream movies, raising questions over how much Netflix will be willing to pay given its nearly $1 billion, five-year deal with Paramount, Lionsgate and MGM, the partners behind fledging pay TV venture Epix. Respected media analyst Rich Greenfield of BTIG predicted on Monday Netflix might pay Starz $300 million a year. But if a deal can’t be reached, Greenfield predicted that Netflix would try to buy Starz.

The last few weeks signal a new beginning for The Weinsteins. Burdened by financial troubles, the company was restructured last year with the help of Goldman Sachs and Assured Guaranty, essentially freeing it of debt. Later in the year, the Weinsteins lost out in buying back Miramax Films from the Walt Disney Co., which sold it to a group led by supermarket magnate Ron Burkle.

In October, Ukranian-born industrialist Len Blavatnik announced he was investing in a three year film fund for TWC to make movies with budgets of between $5 million and $20 million. Apparently unbowed by losing Miramax, the Weinsteins announced in December it was forming a joint venture with Miramax to produce sequels to Miramax titles including “Bad Santa,” “Rounders” and “Shakespeare in Love,” with TWC handling domestic theatrical distribution and foreign rights.

Glasser has said previously that the Weinsteins have their “noses back to the grind again.”