Tutor and Colony groups get 700 titles, name of company involved in $3 billion-plus in grosses

News Analysis by Jeffrey Jolson-Colburn

Harvey and Brad

Burbank, CA (Hollywood Today) 7/31/10 – It’s not often you can get a revered film studio with dozens of Oscars and billions in past revenue for under a billion or more. Much more.

On Friday, Walt Disney Company sold Miramax Films to an investment group for $660 million, according to the trades.

Miramax was founded by Harvey and Bob Weinstein as an indie/arthouse outlet in 1979. But their eye for good pictures and promotional/marketing savvy (especially Harvey) soon made them distributors and their pictures rise above the clutter at the Cannes, MIFED and AFM markets.

That attracted Disney, who wanted an indie arm in 1993. The Mouse House paid Harvey and Bob only $80 million at the time, but the brothers got something they hoped for just as much – major distribution and a bankroll for their ambitious business plans.

And those hopes and plans were big. It led to bringing in more Oscars than anyone’s mantle could hold, and besides some stinkers, brought in the booty as well. “Chicago” danced its way to $306 million worldwide (and six Oscars) while “Shakespeare in Love” wooed $289M globally (seven Academy Awards in all). Both films won Best Picture statuettes.

The key was low production budgets and large marketing – and accolades. “Sling Blade” was made for about $890,000 and brought in $36 million worldwide and a pair of Oscars, “Swingers” was made for only $200,000 and brought in $5M US, won awards and captured a generation—as did “Clerks,” which brought director actor Kevin Smith into prominence.

The money was good for Miramax in the late 90s and early 2000s. “Gangs of New York” took in nearly $200M worldwide and got 10 Oscar noms. The “Scream,” “Scary Movie,” “Hellraiser” and “Highlander” franchises were like bottomless ATM machines.

Yet it was “Pulp Fiction” in 1994 that turned Miramax into a mini-major and took Bob and Harvey to the next level. The film, on its way to seven Oscar noms and winning the Cannes Film Festival, rejuvenated the careers – or at least gave a new coolness level – to John Travolta, Bruce Willis, Uma Thurman and Samuel L. Jackson (well, he was cool before). A video store clerk named Quentin Tarantino took home an Oscar. The $8M pic went on to gross $213M.

“Good Will Hunting” won Oscars for Robin Williams, Matt Damon and Ben Affleck on its way to a global $226M gross. At this point, there was no super-agent in Hollywood that would not drop everything if Harvey or Bob called. They had the Midas touch.

Other Academy Award-winners that also had box office appeal were “Cold Mountain,” “Master and Commander,” Crying Game,” “No Country for Old Men,” “Cider House Rules,” “The English Patient,”  “The Aviator” and  the list goes on.

These were not Golden Globes or Critic’s Awards. These were the real thing – and that what may have irked Disney a bit. If your subsidiary “arthouse” label brought home armloads of Golden Boys years

The Brothers

in and years out — while you were one of the biggest studios ever and were lucky to get invited to Bob and Harvey’s post-Oscar party (an exaggeration, but they probably had to wait in the queue), would you be jealous? Moreover, would not the young-un labels want bigger allowances?

“Our current strategy for Walt Disney Studios is to focus on the development of great motion pictures under the Disney, Pixar, and Marvel brands,” said President and Chief Executive Officer Robert Iger in a statement.

A similar thing happened with the Mouse House association with Pixar when they had a dispute. Pixar earned over $10 billion in income with film plus video, a portion of which Disney got. When the pie gets that big, people argue.  The labels under Disney were bringing in much of the money and accolades, a recipe for unhappy partners.

.The Weinstein Bros. left in 2005 after years of conflict with increasingly angry Disney management.

Some or much of that was the Harvey factor. He wanted bigger budgets, he was working on relative shoestring costs of up to $30 million, while a major picture can cost $175 million or more. Plus he had grown into a prima donna — some around him say he always was. But now he had a regiment of Oscars behind him and nearly $4 billion in revenues in films he was associated with.

In Hollywood Today’s opinion, he was and is entitled to his ego. Few men in the history of film have pulled off what he did – perhaps Harry Warner, Walt Disney, Louis B. Mayer, Adolph Zukor, Harry Cohn and Darryl F. Zanuck  – the more-or-less founders of The Big Six” majors. We are not saying the Weinsteins belong in this hall of giants, but they all started with nothing, some even immigrants, and survived bankruptcies and buyouts to build worldwide empires.

Yet the Weinsteins certainly belong in the new wing, with Spielberg, Lucas, Jerry Bruckheimer, perhaps one of the Pixar brain trust — and many more not mentioned.

That new wing will include some who are just children today, making little movies on computers that will change the world tomorrow.

It’s hard to determine how much income the Weinsteins and Disney ever saw out of the film and video grosses. It is not like Disney heads Michael Eisner or later Bob Iger just wrote blank checks and made WW distribution happen through Mouse. The brother’s film financing pattern went back to their early days, when parts of film, video, distribution, etc., were sold off to territories and other companies to raise the budget and take a share of profits. Yet it is a safe bet Disney, or even the brothers, did not see as much of the big gross as they would have liked.

It has been estimated by some that Miramax was part of films earning up to $4 billion dollars. Yet Miramax might just have been taking a distributor or producers fee on some pictures – or paying out to the numerous worldwide territories and companies involved – and Disney would have only seen a percentage of that.

The Weinstein Bros. named the company after their parents—Miriam and Max.

Walt Disney Co. late Thursday reached an agreement to sell Miramax Films to an investor group led by construction magnate Ron Tutor and Colony Capital. Actor Rob Lowe is one of the investors in the new group, according to THR.

Deal calls for the group, dubbed Filmyard Holdings, to pay more than $660 million — subject to certain adjustments, per Disney — for the rights to 700 library titles, plus the Miramax name, books, development projects and other assets. Deal is expected to close between Sept. 10 and the end of the year.

Disney will handle distribution of a handful of completed Miramax pics that have yet to be released, an arrangement that may be in place for up to a year after the transaction is completed.

Formal announcement of pact with Filmyard ends five months of drama for Disney as multiple bidders moved in and out of the picture once the Mouse formally began shopping its indie division in early February. Contenders for the asset included Harvey and Bob.

But the Weinsteins’ bid hit a roadblock that stemmed in part from the state of the Weinstein Co. venture that the brothers launched after exiting Miramax in 2005. Other investors kicked the tires on Miramax but the Tutor group has been the primary contender for the past two months.

The Weinstein brothers are known to still have hold some sequel and remake rights to select Miramax titles, and it’s unclear how those agreements might be affected by the transaction.

Earlier this week, word spread that Disney had insisted that the Tutor-Colony group pony up a non-refundable $40 million advance payment, probably as a test of the investors’ ability to come through with the financing for the acquisition. It was unclear late Thursday if that the group had put up that money, but a source said Disney brass were “confident” that Filmyard would be able to close the deal.

“Although we are very proud of Miramax’s many accomplishments, our current strategy for Walt Disney Studios is to focus on the development of great motion pictures under the Disney, Pixar and Marvel brands,” said Robert Iger, Disney president and CEO. “We are delighted that we have found a home for the Miramax brand and Miramax’s very highly regarded motion picture library.”

The Miramax library includes such titles as “Shakespeare in Love,” “No Country for Old Men,” “Chicago,” “Pulp Fiction” and the “Scream” and “Spy Kids” franchises.

“I am delighted and honored to acquire the Miramax library,” Tutor said. “On behalf of my partners Tom Barrack and Colony Capital, we look forward to sharing this high quality content.

Rima Bek contributed to this story.

Mr. Jolson-Colburn has been covering Miramax and the Weinsteins for various newspapers since the 1980s.