The dumpster fire that is the Harvey Weinstein scandal will continue to burn awhile longer, as victims and outraged industry members weigh in with statements of outrage over the sickening allegations of sexual harassment and rape. Yet, already the industry has turned to the discussion of the dire future prospects of The Weinstein Company, even after it gets a new name and Harvey Weinstein is scrubbed from the credits of films and TV projects.
Late last week, the town seemed willing to hang in with the production company if Weinstein was fired, giving co-chairman Bob Weinstein and COO David Glasser the chance to keep the company moving forward on its TV and movie projects, and keep the 190 staffers from heading to the exits. This was after the first New York Times article. But there has been one devastating blow after the other in the days following that have eroded much of that good will for a post-Weinstein rebound. The first serious wound came with Ronan Farrow’s The New Yorker article, with descriptions of rapes that were more than sickening; they were terrifying. Two days after the board of directors issued a statement that its members had no idea of the allegations of abuse by Weinstein, TNY today quoted board member Lance Maerov admitting he had heard of multiple settlements. Even though he added he believed they were for consensual affairs and the desire to eliminate legal liability (and some believe his admission got mangled in translation, because at least two of the matters were investigated by TWC’s HR department, several major agents today said they had lost faith in the company’s mixed messaging).
Agents did not want to be on record, but reactions ranged from not wanting to risk the wrath of clients in the event of more fallout by putting them into TWC projects, and others said that if there was evidence of Weinstein benefiting directly or indirectly in projects, the agencies wanted no part of it. They felt even a re-branded company will carry a tarnish, and hoped that projects would be sold off. This wasn’t unanimous; at least one said that if Bob Weinstein and Glasser could change the messaging, and make it clear that Harvey Weinstein’s indiscretions were not in fact covered up, forgiveness could come over time.
But with a splintered board of directors and financiers that were already upset that a TV sale to ITV got derailed in the wake of that NYPD investigation that focused on Harvey Weinstein but didn’t yield charges, with another live sale prospectus possibly harmed by these latest allegations, does TWC have that time? We have heard that some financiers are already poring over the list of plum projects they might pry loose. And agents are looking for outs for their clients on projects that are percolating.
That includes In The Heights book writer Quiara Alegria Hudes and composer Lin-Manuel Miranda. Hudes today Tweeted a desire to see the musical extricated from TWC, and Miranda re-tweeted it. Truth be told, that long gestating project will revert back to its authors in a few months, but they are hardly the only talent in town turning in a vote of no confidence in the wake of the staggering events of the last week.
All of this will make it very difficult for the Weinstein Co.’s depleted board of directors, and Bob Weinstein and Glasser to re-brand the company and keep it afloat. Weinstein’s fall from grace is comparable to the nose dive that Tiger Woods took when his wife allegedly chased him with a golf club and a litany of mistresses were soon revealed. One would have to harken back to Fatty Arbuckle to find as sudden and precipitous a fall in Hollywood as what is happening to Weinstein, and numerous agents and executives at studios believe it will be next to impossible to detoxify the remnants of a company that hasn’t even weathered the litigation that is expected to follow Weinstein’s exit from the company he formed with his brother and used as his platform for decades.
Among the unanswered questions rearing up: what will happen to TWC releases including The Current War and The Upside? In Cannes last spring, TWC announced Fahrenheit 11/9, Michael Moore’s sequel to the all-time highest grossing documentary, Fahrenheit 9/11. The new film, about the election of Donald Trump, was expected to open next month. A theatrical release was possible, but at a buyers screening at Cannes, HBO and Amazon were among the outlets mulling a combination of a limited theatrical and an event broadcast window. Just as important is Quentin Tarantino’s movie on the Charles Manson murders. Tarantino has made his movies with Harvey and Bob Weinstein through his career. With the brothers in a bitter feud, who does he side with, or does he bypass the feud and make the movie elsewhere? TWC has long been a bi-coastal company, mainly because Harvey Weinstein chose to live in New York. The Weinsteins became anchor tenants when Bob De Niro and Jane Rosenthal opened the Tribeca Film Center. How much longer will the company keep that space?
Numerous sources both inside and outside the company paint a dire picture of a business in extreme limbo, as Bob Weinstein and Glasser struggled doggedly to keep things together and prevent a flood of pink slips. While litigation is certain to dictate the specifics of the company’s future, the immediate tasks of operating a company–developing scripts, booking theaters, creating marketing materials–are increasingly fraught.
The financial and production communities are following the fast-moving developments with a mix of shock, dismay and bafflement. Clarity is definitely in short supply. “Waiting to see what the future is going to look like over there,” said one producer who is in business with TWC. “We don’t know yet who knew what when and I assume that’s going to impact everything.”
An employee of TWC reached by Deadline would not speak on the record, but described an office environment where already flagging morale has curdled into anger at Weinstein for acting without a thought to the consequences for the many troops charged with executing his vision. The growing consensus is that job security is tenuous at best.
TWC did not return calls for comment. Sallie Hofmeister, Weinstein’s personal spokesperson, has repeatedly issued the same statement in response to the mounting number of sexual allegations. It reads, “Any allegations of non-consensual sex are unequivocally denied by Mr. Weinstein. Mr. Weinstein has further confirmed that there were never any acts of retaliation against any women for refusing his advances. Mr. Weinstein obviously can’t speak to anonymous allegations, but with respect to any women who have made allegations on the record, Mr. Weinstein believes that all of these relationships were consensual. Mr. Weinstein has begun counseling, has listened to the community and is pursuing a better path. Mr. Weinstein is hoping that, if he makes enough progress, he will be given a second chance.”
A second chance seems highly unlikely, at least in any version of the company that has existed over the past 12 years. One high-level media executive likens the situation to “a run on the bank.” The person expounded to Deadline, “Banks aren’t going to continue to lend to them. You have agencies saying they will not allow talent to appear in their movies even if they re-brand. The equity is likely to get wiped out.”
Investors, either from the private-equity world or other media companies, could make offers for individual assets such as the valuable Project Runway TV franchise, but the entire company is too toxic to be acquired, several knowledgeable sources told Deadline. The widely held expectation is that the company’s equity will get largely wiped out, with any proceeds from asset sales going to repay creditors and a legal mess to determine how current projects get unwound.
Nell Minow, an attorney who specializes in corporate governance and shareholder rights (and whose father, Newt Minow, once led the FCC and delivered the famous “vast wasteland” speech), is among many predicting a “fire sale” for the remaining Weinstein assets. Investors had bought into the creative instincts, connections and Oscar-winning knack of Harvey Weinstein, she said. “And when the primary asset of a company is one individual, they now have to prove they are a going concern. That primary asset is now their primary liability.”
Of course, even before the scandal hit full force late last week, the financial state of TWC was not great. Initially capitalized in 2005 with more than $1 billion from a Goldman Sachs-led consortium riding high in the bull market, a series of strategic errors, overreach and then the financial crisis hobbled the company. The company invested in home video brand Genius, which went bankrupt, as well as faded fashion brand Halston and A Small World, a social network aimed at the 1%.
After the post-Disney iteration of Miramax was eventually sold to the Qatar’s beIN Media Group, which outmaneuvered the Weinsteins’ own bid, Goldman Sachs also sold its equity in the library to AMC Networks in 2015. The Weinstein Co. was to have a shot at regaining library rights down the road. Around the same time, there were reports of TWC selling its TV division to ITV, but those talks collapsed. Last year it arranged a $400 million credit facility to keep the pipeline active.
As a private entity, TWC’s finances remain fairly opaque as it does not need to serve shareholders or make disclosures to the SEC, as public companies do. A premium service from Standard & Poor’s, S&P Capital IQ, lists the company’s total annual revenue as of 2016 as $37.9 million. While that figure appears low, it reflects a down year in 2016 at the box office, when $41 million of Hateful Eight‘s domestic cume of $54.1 million was the main bright spot. grosses from Lion and Wind River have helped in 2017, pushing the company to $123 million for the year, but the overall tally is still down from earlier years this decade.
The company’s coming slate, includes Amityville: The Awakening, from Bob Weinstein’s Dimension label, opening in limited release Oct. 28. Just one more title is on the 2017 docket: Polaroid at Thanksgiving. Titles dated in 2018 include Paddington 2, The War With Grandpa; Mary Magdalene and The Upside. Undated but slated for 2019 is a reboot of The Six Billion Dollar Man. The Current War, initially slated for Nov. 24, has come off the release schedule and its status is to be determined.
The development slate on the film side includes Ends of the Earth (from producers Todd Black and Jason Blumenthal); Edgardo Mortara (Julia Chasman); Speck in the Sea (Jason Blum, Rachel Horovitz); Ink and Bone (DIM) (Lee Clay); Knight Rider (Glen Larsen, Jimmy Miller, Dylan Sellers); Untitled Richard Pryor Biopic (Jennifer Lee Pryor, Forest Whitaker, Nina Yang-Bongiovi, Bruce Cohen); Get Happy (Bruce Cohen); and The Boys in the Boat (Larry Gordon).
In TV, the company’s development slate includes Matthew Weiner’s The Romanoffs and an untitled David O. Russell project.
Harvey Weinstein had estimated the company’s valuation at $700 million as of 2016, but it is likely a fraction of that now, according to dozens of people contacted by Deadline this week. Looking ahead at its next few weeks, even the quotidian rituals of the movie business like premieres and tastemaker screenings–especially for award hopefuls like Wind River–seem inconceivable. As with everything else related to TWC, those plans are completely up in the air.