The Wall Street Journal is reporting that after days and weeks of rumors, The Weinstein Company is on the verge of being sold for a significantly smaller sum than analysts predicted. The price tag for Harvey Weinstein’s company is expected to be only $500 million, and will include the noteworthy debts that the company is carrying. It is expected that the shareholders may lose all their equity in the sale. It’s not yet clear whether the final sale will confer total control of the studio or whether it’s an attempt to acquire the studio’s rights and film library. Founded in 2005 the Weinstein Company’s library includes Django Unchained, The Artist and Project Runway.
Roughly 20 bids were proposed for the company before the deadline at the end of December. It is believed that the bidding process has now been closed and the number of potential bidders has been whittled down to approximately six bidders.
The Weinstein brand is so toxic that none of the Hollywood major studios are reported to be expressing interest. It looks like there are a however a few interested parties moving the sale forward. Names that have been mentioned as interested in purchasing the beleaguered Weinstein Studio include Lions Gate Entertainment. Ironically a number of female headed investors groups are being cited including Maria Contreras-Sweet and Abigail Disney of the Hollywood heavyweight Disney Family. Shamrock Capital Investments and Vine Alternative Investments are reportedly also in the mix according to insiders.
The company is of course subject to a number of impending lawsuits on the foot of the numerous allegations of sexual assault, harassment and victimization which have been leveled at Harvey Weinstein. The company publicly moved swiftly to fire Harvey when the allegations finally made it into the widespread media. Weinstein was fired within three days of the stories going public however there remains a major question about how long the board had known, the extent to which the company had privately known of the allegations and the extent to which the company had colluded and protected the fallen producer. Weinstein as challenged his firing in arbitration and he denies the allegations of engaging in non-consensual sexual activity and using his position to exploit actresses. Weinstein’s brother is also facing a sexual harassment lawsuit and the company is managing significant ongoing legal expenses.
In response a number of production partners including Amazon and Netflix immediately cut all ties with the toxic company. The company has at stages over the course of this controversy explored the option of filing for bankruptcy. It was already in some financial difficulty before the October New York Times blew the lid on the biggest open secret in Hollywood. A number of films that the company produced had flopped but the financial difficulties came to a crisis in the face of the negative publicity that the company was subjected to after the allegations came out. It has been reported that the company was bailed out in the month of October but then that dried up.
It’s not clear that the fraught company even warrants the $500 million price tag considering it had sold off a large portion of its back catalogue in 2010 as part of a restructuring plan. Since the scandal broke most talent agencies have ceased sending scripts so there’s very little in the pipeline. The fate of the distressed company is inextricably bound up with the fate of the fallen Weinstein brothers. Because of this the offers tendered to the board of directors have been very small.
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