EXCLUSIVE: We hear the deal to put the Miramax name and library under new ownership is done. But the reason there is no announcement is that Harvey Weinstein wants to make a publicity splash at the Cannes Film Festival which kicks off Wednesday. [UPDATE: Harvey’s camp just told us: “We’d love to announce at Cannes. We’re very close but if you go to Loeb & Loeb on the 25th floor, there are 3 boardrooms of people still negotiating.” Deadline stands by its story.]
We’ve learned that the Weinstein Brothers/Ron Burkle/Fortress-Colbeck partnership has finally settled for a price of around $650 million — which, on the surface, seems like more than Burkle wanted to pay, and less than Disney expected to receive. [UPDATE: The Weinsteins will claim the price is “under $625M”, but Disney will privately say it’s “above $650M” and more like $700M.]
You may remember that Deadline (which broke the story that Disney was selling the Miramax library in the first place) predicted that the parent company would haggle a higher price than the $625 million Burkle was offering at the start of his exclusive negotiating window with the studio starting April 17th. That window was supposed to remain open for only 5 days, but extended because of a strategic end game.
In order to get the price down for Burkle and up for Disney, both sides engaged in some last minute bargaining over the timetable for expected receivables and the list of included assets. Team Harvey tried to convince Disney to move some or all of those $200M receivables coming in for the next 36 months to the 2009 calendar year, so it would look as if Burkle were paying less for Miramax than he actually is. (Burkle is putting up 1/2 the sale price, with the NY hedge fund Fortress-Colbeck footing the rest. The Weinsteins put up no money.) Meanwhile, Disney stuck firm to its $700 million price, until enough real assets had been taken out of the proposed transaction on the table so the studio didn’t feel as if it were selling Miramax at a discount.
Both sides met in the middle on both issues. So don’t believe the hype: the real price Miramax fetched was $700 million. Disney got rid of a defunct asset at a decent price. And Burkle wound up paying above and beyond the $500M it’s probably worth. And Harvey and Bob come away with no equity but at least bragging rights to the company named after their parents Miriam and Max, and distribution rights and fees to manage the Miramax library they initially sold to Disney in 1993 for $80 million and then built into 600 titles until the bros were forced to leave it behind in 2005 after a prolonged falling out with Michael Eisner.
One issue that never received any publicity is how Harvey privately used his remaining leverage with Disney to threaten to screw over anyone else who was even thinking of buying Miramax. Under their exit deal in 2005, the Weinstein bros were able to retain a hold over sequel or reboot rights to films like Scream, Spy Kids and some other Dimension titles. Harv, in his inimitable way, was warning Disney and the other buyers that he would do what he could to make developing those projects a nightmare. It was a threat not lost on Disney, which is why the studio is so happy now to be rid of Miramax and finally, Harvey.
But this time, Harvey has met his match in Ron Burkle, who has a history of going to court against anyone involved in his financial investments whom he thinks steps out of line. Just ask Mike Ovitz, Anne Hathaway’s former fiance, and Barnes & Noble, which Burkle last week sued over a poison pill provision that prevents him from acquiring 20% or more of the book retailer in order to have a say in how it’s run.