Disney, Weinsteins Close To Separation Agreement -Sources
LOS ANGELES (AP)--An agreement to end the 12-year partnership between independent film producers Bob and Harvey Weinstein and the Walt Disney Co. ( DIS) could come as early as this week, sources familiar with the talks said.
Meetings are scheduled to discuss the final terms of a deal that would see Disney keep the Miramax name and library of more than 800 films and allow the Weinsteins to put together financing for a new production company.
Under the terms being discussed, Disney would make substantial payments to the Weinsteins for bonuses they are entitled to under the terms of their contract, plus compensation for interests the brothers have in current film projects, confirmed one source who talked on condition of anonymity.
Details of the talks have been reported over the past several weeks by sources familiar with negotiations who have requested anonymity. Spokespeople at Miramax and Disney declined comment Monday.
Disney has discussed in the past its desire to return Miramax to its specialty film roots, producing or acquiring inexpensive movies with large upside potential. While Miramax has given Disney past profits, a library worth billions and a lot of Oscar glory, Disney has complained about the costly ambitions of the Weinsteins.
The two sides have squabbled about the studio's profitability, with Miramax saying the studio regularly returns profits to its parents, despite gambles on large-budget films such as 2002's "Gangs of New York."
Disney says Miramax has lost money in three of the past five years. Part of the loss came from Disney's multimillion-dollar overhead charge against Miramax's revenue.
Financial analysts generally shrug at the impact the Weinsteins' leaving will have on Disney.
Disney has said it intends to scale back Miramax's overall budget to the $300 million range - down from the $700 million range the studio has received in recent years.
"We surmise the revenue contribution is not insignificant, but the profit contribution is minimal due to the Weinsteins' penchant for very expensive films and paying expensive A-list salaries," said David Miller, an analyst at Sanders Morris Harris. "Disney would be better off without the Weinsteins because of that very reason."
The disintegration of the relationship is more a clash of egos between the brothers, who have run the company with considerable autonomy from their base in New York, and Disney chief executive Michael Eisner, who has bristled at the Weinsteins' independence.
In cutting its ties with the Weinsteins, there is also the prestige factor. Miramax has delivered Disney's only Oscars for live action movies, including six Academy Awards Sunday night for "Finding Neverland" and Martin Scorsese's film " The Aviator."
The Weinsteins' contract expires in 2009, but an option in the contract allows Disney to renegotiate the relationship this year. It was those negotiations that led to the current talks to sever ties between the brothers and Disney.
It is still unclear whether the Weinsteins would remain at Disney until their option expires in September and which film projects the two companies could continue to work together on.
The Weinsteins are lining up financing to form their own company, according to one source. They won't be entitled to use the Miramax name, a combination of the names of their parents, Miriam and Max.
Dow Jones Newswires 02-28-052009ET
Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Rese
LOS ANGELES (AP)--An agreement to end the 12-year partnership between independent film producers Bob and Harvey Weinstein and the Walt Disney Co. ( DIS) could come as early as this week, sources familiar with the talks said.
Meetings are scheduled to discuss the final terms of a deal that would see Disney keep the Miramax name and library of more than 800 films and allow the Weinsteins to put together financing for a new production company.
Under the terms being discussed, Disney would make substantial payments to the Weinsteins for bonuses they are entitled to under the terms of their contract, plus compensation for interests the brothers have in current film projects, confirmed one source who talked on condition of anonymity.
Details of the talks have been reported over the past several weeks by sources familiar with negotiations who have requested anonymity. Spokespeople at Miramax and Disney declined comment Monday.
Disney has discussed in the past its desire to return Miramax to its specialty film roots, producing or acquiring inexpensive movies with large upside potential. While Miramax has given Disney past profits, a library worth billions and a lot of Oscar glory, Disney has complained about the costly ambitions of the Weinsteins.
The two sides have squabbled about the studio's profitability, with Miramax saying the studio regularly returns profits to its parents, despite gambles on large-budget films such as 2002's "Gangs of New York."
Disney says Miramax has lost money in three of the past five years. Part of the loss came from Disney's multimillion-dollar overhead charge against Miramax's revenue.
Financial analysts generally shrug at the impact the Weinsteins' leaving will have on Disney.
Disney has said it intends to scale back Miramax's overall budget to the $300 million range - down from the $700 million range the studio has received in recent years.
"We surmise the revenue contribution is not insignificant, but the profit contribution is minimal due to the Weinsteins' penchant for very expensive films and paying expensive A-list salaries," said David Miller, an analyst at Sanders Morris Harris. "Disney would be better off without the Weinsteins because of that very reason."
The disintegration of the relationship is more a clash of egos between the brothers, who have run the company with considerable autonomy from their base in New York, and Disney chief executive Michael Eisner, who has bristled at the Weinsteins' independence.
In cutting its ties with the Weinsteins, there is also the prestige factor. Miramax has delivered Disney's only Oscars for live action movies, including six Academy Awards Sunday night for "Finding Neverland" and Martin Scorsese's film " The Aviator."
The Weinsteins' contract expires in 2009, but an option in the contract allows Disney to renegotiate the relationship this year. It was those negotiations that led to the current talks to sever ties between the brothers and Disney.
It is still unclear whether the Weinsteins would remain at Disney until their option expires in September and which film projects the two companies could continue to work together on.
The Weinsteins are lining up financing to form their own company, according to one source. They won't be entitled to use the Miramax name, a combination of the names of their parents, Miriam and Max.
Dow Jones Newswires 02-28-052009ET
Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Rese