LOS ANGELES (Hollywood Reporter) – There might be a reason why bids for Miramax Films are coming in under parent company Disney’s $700 million asking price, and it’s not just recession-weary cost-consciousness at play.
Rather, the library is a maze of disparate titles and murky rights. Yes, there are 14 prestige titles that competed for best picture Oscars, three of which nabbed the statuette, but there also is a lot of straight-to-video fare, quirky art pictures with little remake potential and other films whose ownership is unclear or hopelessly split.
Even the size of the library has been misstated over and over again. Various reports have placed it at 700 movies, but there are actually only 611 (as well as 220 hours of TV episodes), and only slightly more than half of those movies got a domestic theatrical release.
There also are five unseen movies in the mix: Julie Taymor’s adaptation of Shakespeare’s “The Tempest”; the Jennifer Aniston romantic comedy “The Switch” (formerly “The Baster”); the horror thriller “Don’t Be Afraid of the Dark”; the thriller “The Debt”; and the romantic comedy “Last Night,” starring “Avatar” leading man Sam Worthington.
In its history, Miramax released 359 movies in the domestic theatrical market, and among those only 10 grossed more than $100 million. The biggest success was “Chicago,” released in 2002, which grossed $170 million.
Many of the other releases are less desirable, such as “Drag Strip Girl” and “The Deep End.” There are also Asian kung fu movies and direct-to-DVD titles.
Additionally, Miramax owns only certain rights in specific parts of the world for “The Aviator” and “Reservoir Dogs,” for example. There also are some movies that originally were licensed for a period of years, typically 25, and are within 10 years of lapsing if the terms are not renegotiated.
Deadlines for bids had been set initially for March 31, but Disney has had to postpone that at least twice. The three bidders for the niche label, which Disney bought from founders Bob and Harvey Weinstein in 1993, have different approaches.
The Weinsteins are the management component of a group bidding $600 million, with the equity coming from California billionaire Ron Burkle, who is joined by Fortress Investment Group and Colbeck Capital Management. Out of that bid, about $50 million-$100 million would be paid out during the next few years as a loan from Disney but wouldn’t be contingent on the performance of the movies.
No matter who wins Miramax, the Weinsteins retain rights from their 2005 exit agreement with Disney on more than 25 titles that can only be remade with their participation or approval.
The highest bidder is a group put together by David Bergstein, CEO of Pangea Media Group. Bergstein, who is facing an involuntary bankruptcy filing by creditors who claim he owes them millions of dollars, said Thursday he is acting only as an adviser to the group.
He said the investors include his frequent partner Ronald Tutor, a construction magnate, and two foreign entities he declined to identify. Theirs was an all-cash $650 million bid and would have been raised to $700 million if Disney had been willing to include the upcoming animated movie “Gnomeo and Juliet,” he said.
The third investor group, with a bid of $550 million, is Platinum Equity Partners, run by Tom Gores, and an investment firm run by his brother Alec. They are being advised by their brother Sam, who heads the Paradigm talent agency. The Gores’ bid is for all cash, and their plan apparently is to ramp Miramax up and run it as a stand-alone movie company again.
Disney did not return calls seeking comment. Spokesmen for the Gores and for the Weinsteins declined comment.