With talks about the fate of the Weinstein Co. entering their final days, Colony Capital head Tom Barrack says the legal liabilities from the dozens of women accusing co-founder Harvey Weinstein of sexual assault and harassment are creating a “Rubik’s Cube” of complexity around the company’s prospects and value.
Colony earlier this month offered TWC a lifeline, extending an initial investment to fund operations while also saying it was reviewing options to acquire part or all of the company. On Tuesday, Barrack sat for a 4-minute interview with Bloomberg TV in Riyadh, Saudi Arabia, while attending a business conference nicknamed “Davos in the Desert.” He said a decision would be made “soon” about TWC. Reports have indicated talks will conclude by next week.
Barrack used an emergency-room metaphor to describe the state of the company. “You have a patient that’s dying on the table,” he said. “You have to revive them and get them to breathe first. If they can do that, then maybe you can get them to walk. And if they walk, maybe you can get them in a race.”
Distressed assets are nothing new to Barrack, who famously once came to the aid of Michael Jackson’s Neverland Ranch, saving it from foreclosure. He also led the $660 million acquisition of Miramax from Disney in 2010. While that situation was far different from the current circumstances, it presented some similarly appealing economics given the economic climate and the desire of Disney to shed its cash-draining specialty film unit, having parted ways with the Weinsteins years earlier. Barrack sees similar upside to TWC, but said a lot depends on how the legal liabilities are handled. He declined to speculate on a valuation for the company or its assets.
“If the Weinstein element could be removed, if the toxicity of the liabilities that surround the content of the company could continue on in a normal way, there’s some value,” he said. Hinting that Bob Weinstein’s Dimension Films unit could become a foundation for a post-scandal version of TWC, he said “ring-fencing the Weinsteins” was a priority, though he did not elaborate on what that would mean.
Unlike Miramax, which had a deep and Oscar-rich library of 750 films spanning three decades, TWC’s output has been far more uneven. Since opening its doors in 2005, the company has released 132 films. Just five cracked $100 million domestically. The company also backs Project Runway, the reality hit which debuted in 2004 at the end of the Weinstein’s run at Miramax. None of its other TV ventures have borne much fruit, and recent days have seen a host of withdrawals and cancellations of projects as filmmakers, talent and partners all retreat from having any association with the company.