The Weinstein Company

[Guest]

Embattled film and television studio The Weinstein Company (TWC) entered talks with Tom Barrack’s PE firm Colony Capital to sell most or all of its assets. At minimum, TWC’s getting an influx of emergency cash. 

That’s because the studio has been engulfed in controversy, as dozens of women have come forward accusing its former co-chairman, Harvey Weinstein, of serial sexual abuse. The backlash has prompted four board members to walk away from the dumpster fire, and brought business dealings to a screeching halt. 

Colony Capital has played Superman before

In 2009, the firm bought the Neverland Ranch for $22.5 million from a desperate Michael Jackson, and just recently put the estate, ferris wheel and all, back on the market for $67 million. Colony also rescued Annie Leibowitz, a celebrity photographer who was drowning in $24 million in debt (she failed to pay her loans to an arts financing firm).

Which brings us to TWC. Barrack has a passing familiarity with Harvey and his brother/business partner, Bob. In 2010, Colony was part of a group that acquired Miramax, a studio the Weinstein bros founded and sold to Disney for $660 million before creating TWC.

Another wrinkle to the deal? Tom Barrack is a close friend and adviser to President Trump. Weinstein, on the other hand, was a longtime donor to Democratic candidates like Hillary Clinton. Who says business and politics don’t mix?

Not The Weinstein Company

It’s a studio that was once on top of the industry. The Weinsteins (Harvey, especially) grew TWC into a powerhouse since its founding in 2005, distributing Oscar-worthy movies like Lion and Silver Linings Playbook.

But TWC will need more than a ballroom-dancing Bradley Cooper to save it from declining box office revenues (down to $59.6 million in 2016 from $465 million in 2013). 

Maybe when Tom Barrack takes the director’s chair the cameras can start rolling again. But it’s going to be a heavy load to bring TWC back to respectability.

https://www.morningbrew.com/stories/colony-capital-rescue/

[Money & Finance]

Weinstein just keeps falling from grace. This time, the tarnished name is in the news as The Weinstein Company nears a sale for less than $500 million, roughly half of which is debt. Insult to injury: shareholders risk losing all equity.

Of the 20 bids the film studio has received since December, six have made the short-list, including former Obama cabinet member Maria Contreras-Sweet. Some other contenders: production company Killer Content (supported by Abigail Disney), studio Lionsgate, and investment firm Shamrock Capital (founded by another Disney, Walt's nephew Roy).

After co-chairman Harvey was fired following dozens of high-profile sexual assault and harassment allegations, Weinstein Co. found itself in cinema purgatorio. Its slate of upcoming releases—including drama Current War about Thomas Edison and George Westinghouse—is collecting dust while the studio tries to write a happier ending.

And in Hollywood, timing is everything. While operating expenses and legal bills continue to pile up, Weinstein Co. may soon have no choice but to file for bankruptcy.