Breaking Up Is Hard to Do
The rise and fall of the studio that changed Hollywood -- As the Weinstein brothers part ways with Disney, leaving Miramax behind, both sides face an uncertain future by Mark Harris
Nobody died. Nobody went broke. Nothing went out of business. Harvey and Bob Weinstein will continue to make movies, and a business called Miramax will continue to exist. But as the news that Disney would end its 12-year relationship with the Weinsteins finally became a matter of signing contracts and finalizing financial arrangements after months of whispers and rumors, it was hard to shake the feeling that the movie industry was bearing witness to a passing of sorts. The Weinsteins will live to fight another day. And so, presumably, will Miramax. But it was the combination of the two that, over the last two decades, changed the course of American moviemaking and moviegoing by bringing the independent-film business into the Hollywood-studio mainstream.
The track record of the company that the Weinsteins founded 26 years ago, and from which they're now being forcibly parted, is astonishing — $4.5 billion in grosses, 249 Oscar nominations, and the reinvention of the idea of a movie company as an entity whose very name meant something to moviegoers. Of course, exactly what Miramax signifies to people within the industry has varied wildly over the years, depending on which side of the Weinsteins' often volcanic tempers and galactic ambitions one found oneself on. The Weinsteins' detractors — and there are many — see the rise and fall of Miramax as a fable about the perils of getting too big for one's britches, not to mention karmic payback for all the movies Harvey reedited or shelved, all the buyers he muscled out of a festival auction, and all the rivals he trampled in an Oscar campaign. Disney CEO Michael Eisner's detractors — and there are plenty — see this as one more demonstration of his inability to maintain relations with outside talent. (Exhibit A: Miramax. Exhibit B: Pixar.) Those who disparage the studio-owned indie labels as ''dependents'' and believe that grabbing for corporate dollars means you lose your artistic integrity will doubtless take this as a lesson in the virtues of staying small.
And those who are inclined to see corporate shifts as grim fairy tales can finally write a great one: the story of a king named Michael who was chronically uncomfortable with anyone below him getting too powerful, and a prince named Harvey who was chronically uncomfortable with anyone above him saying no. ''You can take it in many different ways,'' says Bob Berney, an admiring rival of the Weinsteins who runs Newmarket Films. ''They wanted to make money, their ego is huge. . .but their legacy is really showmanship and passion for the whole business. They created a new audience, and kept it going. That sort of force of personality is something that, whether you like it or not, you kind of miss.''
Last week, as the year's biggest showbiz split (sorry, Brad and Jen) finally started to wrap up, everyone was left with the same questions: What becomes of the Weinsteins without Miramax? What becomes of Miramax without the Weinsteins? And since it's always the kids who suffer in an ugly breakup, what happens to all those movies?
''There's a lot of risk and reward in the history of the company,'' says Harvey Weinstein. And never were the risks steeper, or rewards greater, than in 1993, when Disney bought Miramax for the now-astonishingly-bargain-basement price of about $80 million. The potential for a corporate culture clash was evident. Disney had stockholders to please and an assiduously family-friendly image to cultivate; Miramax courted controversy with an appetite that expanded with every headline, protest, and NC-17 rating. Nonetheless, the deal made sense. With an ever more noteworthy track record of turning underdogs from My Left Foot to ______, lies, and videotape to The Crying Game to The Piano into gold, Miramax gave Disney a handful of assets it had been lacking: adult prestige, bicoastal media cool, and a renewable supply of Academy Award nominations. As for what Disney gave Miramax, that was simple: money — and lots of it — in the form of a hefty bonus structure for the Weinsteins above their seven-figure base salaries, and a budget that eventually rose to $700 million annually.
For the first few years of the partnership, the sailing was relatively smooth. Disney could tolerate the occasional Walt-is-turning-over-in-his-cryogenic-tube jokes that would accompany, say, the release of Miramax's inflammatory gay-Catholic drama Priest(1995) in exchange for the revenues, raves, and seats at the Shrine Auditorium that came with movies like Pulp Fiction. In early 1997, the partnership may have reached its pinnacle: Wes Craven's Scream gave Bob Weinstein's Dimension division its first blockbuster franchise (''It was Dimension's defining moment,'' says Bob Weinstein, ''the movie that put us on the map''), and The English Patient gave Harvey the one trinket he'd always wanted — a Best Picture Oscar. ''We gambled the company on that movie,'' recalls Harvey Weinstein, who had never before spent so much on a film (even Pulp Fiction cost only $9 million). ''It was a pivotal moment—Joe Roth [then Disney's movie chief] and Disney gave us the ability to spend $27 or $28 million and make a bigger movie. At the time it was pretty shocking in the so-called 'indie headquarters.'''
The following year brought Miramax its biggest box office hit yet, Good Will Hunting, a movie that epitomized Miramax's ability to sell the backstory — in that instance, the friendship between Matt Damon and Ben Affleck — as aggressively as the movie itself. A year after that, Miramax took home its second Best Picture trophy, when Shakespeare in Lovestunned Saving Private Ryan and cemented Harvey Weinstein's reputation as the most brutally effective campaigner in Oscar history. Among the runners-up that year was Life Is Beautiful, which the company turned into the most successful foreign-language film in U.S. history until that time. Meanwhile, Dimension was becoming a serious earner for Disney, launching successful franchises in comedy (Scary Movie) and family adventure (Spy Kids, created by Robert Rodriguez, whom Bob Weinstein calls ''the godfather of Dimension'') alongside the Screamtrilogy.
But the successes masked a series of recurring frustrations that often pitted the Weinsteins' brio and ambition against Eisner's caution and determination to control the reins. Working under a deal that required them to gain Disney's approval for any individual film budget above a cap that eventually rose to $35 million, the Weinsteins chafed; when they took their pitch for The Lord of the Rings to Eisner, the boss said no. (In fairness, Peter Jackson was never happy with the Weinsteins' proposal to make J.R.R. Tolkien's trilogy into two films rather than three; nonetheless, seeing the project go to New Line and gross billions had to sting.) Disney and the Weinsteins also clashed over issues of content: Kevin Smith's raw, button-pushing Dogma went to Lions Gate after Disney discouraged its release through Miramax. And they butted heads over expansion: Eisner nixed Harvey Weinstein's proposal to purchase half of IFC and Bravo and launch a Miramax cable channel for $300 million, only to see the two channels sell later for four times that, and also passed on Weinstein's proposal to buy the Artisan film library, which instead went to Lions Gate. ''The idea that the disagreements with Michael were personal has been exaggerated,'' says Weinstein. ''They were more about my entrepreneurial spirit.''
Ironically, it was at the moment of one of Miramax's greatest public successes — the Oscar triumph in 2003 of the company's highest-grossing film ever, Chicago — that the relationship between the Weinsteins and Disney began to sour in a more serious way. The brothers had endured their first extended period of bad publicity, over everything from a ballooning staff that necessitated layoffs to the failure of Talkmagazine to the escalating budgets of increasingly large-scale movies like Gangs of New York and Cold Mountain (not to mention costly schlock like Duplex and duds like The Shipping News). According to the James B. Stewart book DisneyWar, in the spring of 2003, Disney's board of directors asked for a review of Miramax's financial performance (although the company's profitability over the last five years has been a point of extended dispute between Disney and Miramax, both sides agree that Miramax lost money in fiscal 2001). The Weinsteins responded by hiring Eisner nemesis Bert Fields to represent them, and reportedly spent part of the next year looking for ways to either buy back their company or secure independent financing.
As late as the end of 2003, Eisner, who declined to comment on specifics of the Weinsteins' departure, was saying he expected them to stay at Disney. But last spring, the two sides reached the point of no return. A source close to the Weinsteins says that the brothers' refusal to offer a public statement of support to Eisner during his extended showdown with Disney's board and angry stockholders last year was ''a 'no going back' moment.'' It coincided with the noisiest fractures in the relationship yet: Disney's refusal to release Michael Moore's Fahrenheit 9/11 seemed to underscore the muzzling effect the parent company had on Miramax, and Eisner's choice to make public his contention that Miramax had been profitable for only two of the last five years — a statement with which the Weinsteins bitterly disagree — seemed a calculated attempt to provide solid financial underpinnings for the impending divorce decision. In August, the Weinsteins received notice that their contract, which ends in September 2005, would not be extended. After exploring various options, including one in which Bob Weinstein would have stayed at Disney, the Weinsteins and Disney began hammering out the particulars of a departure deal last November.
Those particulars contain some rather bitter pills for both sides. The Weinsteins have to surrender not only the company they named after their parents, Miriam and Max, but also the name itself. Disney will also keep Miramax Books (though its well-regarded chief, Jonathan Burnham, has announced his departure), and, most importantly, an 800-plus film library that contributes considerably to an estimated overall value of $2 billion. What Disney and Eisner lose, though less quantifiable, is no less substantial; if, as expected, animation giant Pixar leaves the Disney fold, Eisner's reputation as someone unable to play well with other powerful men will be chiseled in granite, and as for Oscar prestige, unless the studio has a surprising campaign up its sleeve for The Pacifier, the glory days may be over. (This year's race, in which Miramax received 20 nominations, Pixar 4, and Disney 2, was not atypical.) In addition, it's unlikely that Disney will be making many movies with Bob-and-Harvey loyalists like Robert Rodriguez, who told EW in January that if the Weinsteins left Disney, he'd ''probably see where they were going and figure out how I'd work with them again,'' or Quentin Tarantino, who last fall publicly compared the Weinsteins' potential disentanglement from Disney to the liberation of France during World War II.
That disentanglement, it turns out, will be gradual. The Weinsteins declined to comment on the breakup negotiations, but company sources say they will remain at Miramax as nonexclusive consultants through September, overseeing the release and marketing of a slate of about 20 movies that includes Rodriguez and Frank Miller's Sin City, Rodriguez's kid-oriented The Adventures of Shark Boy and Lava Girl in 3-D, Matt Damon and Heath Ledger in The Brothers Grimm, the war drama The Great Raid, Jennifer Lopez and Robert Redford in An Unfinished Life, and Proof, which teams Shakespeare in Love's director John Madden and star Gwyneth Paltrow with Anthony Hopkins and Jake Gyllenhaal. Like many of the above films, Proof's release has already been delayed once, but a Miramax spokesman now says it will open before the Weinsteins depart. (Custody of several high-profile projects in development, including adaptations of the best-sellers Artemis Fowl and The Nanny Diaries, is still up in the air.)
What the brothers will get when they leave is a payout that a source close to the negotiations puts at about $120 million, encompassing their bonuses for 2004 and 2005, a share of the expected profits from the movies that Miramax will release between now and September, and a fund that the Weinsteins will, in essence, swiftly give back to Disney as payment for being able to take several projects with them. These include the already filmed Jennifer Aniston/Clive Owen thriller Derailed; a new Stephen Frears drama starring Judi Dench and Bob Hoskins; a pair of independently made acquisitions from this January's Sundance Film Festival, The Matador and Wolf Creek; Breaking and Entering, a modestly budgeted Anthony Minghella film starring Jude Law; and a number of projects — including one from Tarantino, one from Kevin Smith, and Mila 18, an adaptation of a Leon Uris novel that Harvey Weinstein has long wanted to direct himself — that are currently in development. It's also a good bet that the Weinsteins will reteam with Michael Moore on Sicko, a documentary about the U.S. health-care system. Those films make up a potential roster that looks strikingly similar to the Miramax of old, before it entered the era of studio cofinancing and $100 million budgets. ''They learned their lesson on Cold Mountain,'' says one producer who has worked with the brothers, ''which is why they keep mentioning Quentin, Rodriguez, and Smith as the ones they're taking — all of those guys know how to make inexpensive pictures.''
Disney will reserve the right to partner financially with Miramax on films that were acquired or developed during the Weinsteins' time at the studio. That could include the movie that EW has learned may be the first that the brothers put on the fast track under the Dimension label (a name they'll get to keep): Scary Movie 4, the next installment in a franchise that has already earned $338 million domestically and could provide just what a new Weinstein venture will badly need — a fast infusion of profit.
Disney's plans for a post-Weinsteins version of Miramax are still in formation. But the company line seems to be that Disney is committed to a division more like the Miramax it bought in 1993 — lean and tight, with a much smaller release slate and staff, lower per-movie costs, and an annual budget totaling only about half of the $700 million Miramax used to spend. ''It's our hope that we will find a group of people who will be able to excel in making small, high-quality films,'' says Michael Eisner. ''I'm sure it'll be different from the way Harvey and Bob did it, but I assume it'll be equally successful, especially with the oversight of [Disney Studios chairman] ________ Cook.''
The word small is no accident; in the Disney telling, Miramax went off mission sometime in the Gangs of New York era and must now be refashioned along the lines of Fox Searchlight, which caps almost all of its budgets at $15 million and has been flourishing recently. So look for a reputation for fiscal restraint on the résumé of whoever gets the unenviable job of replacing Harvey Weinstein — and expect a lot of skepticism in the industry. ''I don't understand what the [Miramax] name is without the talented people who worked many years to create that brand,'' says Proof producer Jeff Sharp of Hart Sharp Entertainment. ''I don't want to speculate, but unless you have a visionary or someone with the charisma and sheer love of cinema like Harvey, you just get the corporate side of it.''
Judging by the number of filmmakers expressing relief that the Weinsteins will remain involved with their movies, Disney has some serious image-rehab work ahead in the creative community. Matadorwriter-director Richard Shepard says flatly: ''I made Harvey call me to tell me this project wasn't going to get abandoned in any sort of ugly divorce, and he promised me that. I would not want to see it released by someone other than [Harvey]. . .I think we all know that the reason the Miramax engine was so good was because of Harvey, you know?'' And Greg McLean, writer-director of Wolf Creek, says the Weinsteins ''were just so enthusiastic and straight about what movies were good, what movies were ________. . .I had a ball [with them].'' Expressing confidence that Wolf Creekwill be released through the Weinsteins' new venture, he adds, laughing, ''I mean, unless Disney wants to bring out an NC-17 horror movie. I wouldn't if I was them — my shareholders would shoot themselves!''
Disney's shareholders are, for now, likely to keep their pistols holstered. Mention artistic integrity and Oscar nominations to Wall Street, and you'll see a yawn the size of the Grand Canyon; analysts are quick to cite estimates that Miramax provided only about 4 to 6 percent of the operating profits for Disney's filmed-entertainment division (financially, the loss of one Pixar cartoon blockbuster a year would hurt Disney much more). ''We support Disney in their decision not to renew the Weinsteins' contract,'' says media analyst David Miller of Sanders Morris Harris Group. ''Miramax is a label meant to market and acquire independent films. The Weinsteins strayed from that.'' Other analysts point out that Disney is walking away with the big prize — a library worth more than $1 billion. ''That's where the value is,'' says one. ''It's an annuity.''
Meanwhile, Harvey and Bob Weinstein will start over, with a new, yet-to-be-named, yet-to-be-financed company that will release its first movies in the fourth quarter of this year. Some financial analysts have put the cost of launching a new company on the scale of Miramax at anywhere from $500 million to twice that. But ''it's a total misperception to say they need to have hundreds of millions in the bank to open a new shop,'' says Reed Martin, adjunct professor of film marketing at NYU's Stern School of Business. ''Open Water was acquired for $2.1 million and made $30.5 million. Napoleon Dynamite was acquired for $3 million [and made $44.5 million]. If Bob and Harvey have two desks and two phones, they're in business.'' It's not likely, however, that they'll stop there. Though the Weinsteins wouldn't talk about plans for a new company, Harvey has made no secret of his desire to run a multimedia business that includes a broadcasting arm as well as a movie division.
But an ending is an ending, and the remarkable lack of public acrimony these days is as sure a sign as any that a door is closing on an era. ''The thing I want to say about Michael Eisner,'' says Harvey, ''is, I don't think there was ever a bigger fan of our movies. He was always the first to write me a note about a movie saying, I love it. And his wife Jane was always a good luck charm for me. If she picked one of my movies to screen for friends, I'd know it would be nominated for an Oscar. And for Michael to give me the ability to make movies like Hero and City of God was pretty brave.''
''I think it's been an excellent relationship,'' says Eisner. ''Miramax was uniquely entrepreneurial. If you actually know anything about the entertainment business, where companies try to associate themselves with these kinds of creative people, those deals usually last two or three years. This was about five times as long and fifty times as productive and yielded a thousand times more Academy Award nominations. Even characterizing this as a divorce is ridiculous. [Harvey and Bob are] two people who will now go on and be equally successful in another embodiment. They're just as good as they've always been.''
About that, it should be no surprise that the Weinsteins agree. ''People sort of assume there has to be a negative ending,'' says Bob. ''This could be a good thing, because our first act was small, independent Miramax, and the second act was the explosive growth of the company. Stay tuned for the third act. It'll be pretty great too.''
(Additional reporting by Scott Brown, Jeff Jensen, Gregory Kirschling, Joshua Rich, Josh Rottenberg, Missy Schwartz, and Alynda Wheat)
