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Weinsteins: More Misses Than Hits
If you asked almost anybody in the movie industry to wager on how Harvey Weinstein and his brother, Bob, would fare after they left Disney in 2005 and started their own company, the smart money would have bet on this: the Weinstein brothers, who helped bring the world “Good Will Hunting,” “Pulp Fiction,” “The English Patient” and “Shakespeare in Love,” would still make splashy movies and be a big factor at the Oscars, but they would spend like pirates and their backers at Goldman Sachs would regret allowing them to get their hands on a billion dollars.
The smart money is wrong, mostly. Costs at the Weinstein Company seem under control. Despite rumors that the company’s backers are unhappy, Mark Cuban, a high-profile investor who expressed some mild reservations this year, said in an e-mail message, “I think they are firing on all cylinders now.” Harvey, they believe, is back in the movie business with both feet.
But regardless of how sanguine the board seems, the fact remains that now that the Weinsteins have what they want — independence — they can’t seem to achieve what they keenly desire — success on their own terms. For the second year in a row, Harvey and Bob have had some significant misses at the box office and probably won’t be major players at the Oscars.
And even though there have been some recent wins at the box office, the board is still insisting that the company is in need of a new chief executive in order to have a successful public stock offering, said one board member and someone contacted by the board about the job. Tarak Ben Ammar, the Franco-Tunisian producer who is on the board, told Fortune magazine in June that the fiscal year had been “disappointing” and mused aloud that “maybe we need to bring in a high level C.E.O.”
But according to another board member, who declined to be identified because of his relationship with the company, no industry veterans have been interested in taking the job. One individual who was approached by the board, and who like most people in the movie business, declined to be identified, mentioned that the company already has two de facto chief executives — Harvey and Bob — both of whom have reputations as brutal taskmasters. “I feared for my quality of life,” this person said.
And the board remains concerned that the lack of other senior executives is hurting the company’s ability to make, acquire and market films. While at Miramax, the brothers had an impressive record of developing talent from within, but that was at a much larger company — Miramax had nearly 500 employees, the Weinstein Company has about 220 — and many of the people who learned the craft from the brothers are now working for their competitors. So for the time being, it’s the Harvey and Bob Show.
That might be enough if the movies were working. Although the Weinsteins got off to a great start with “Hoodwinked,” a surprise animation hit, movie after movie, big and small, has tanked. “The Libertine,” “Breaking and Entering,” “School for Scoundrels,” “Nomad,” “The Hunting Party,” and most notably, “Grindhouse,” a $75 million display of artistic hubris and tone-deaf marketing, have created a huge pothole on the road to what was supposed to be a bright future.
Bob Weinstein’s Dimension division, which has always financed the brothers’ loftier ambitions, has scored some hits recently with the “Scary Movie” franchise (its profits are split with Disney), a remake of “Halloween,” the Stephen King horror film “1408.” Michael Moore’s documentary “Sicko” also connected. But those successes can’t fully offset the lack of performance in the rest of the company.
One thing has not changed — Harvey himself. On the phone from Hong Kong, Harvey, who made himself the corporate face of independent film with his successes at Miramax, sounded angry and weary at the same time.
“From the beginning of time, people have always been concerned about how I was doing and tried to spread ill will,” said Harvey, who has always been the public face of their business. “But we have been on top so long, they can’t knock us down.”
A few years ago, when he and his brother still worked at Miramax, we had a similar conversation for an article in New York magazine. He cast himself as Tuco, the “ugly” from “The Good, the Bad and the Ugly.” When cornered naked in a bathtub by a loquacious gunman, Tuco pulls his own gun out of the soap suds and shoots the guy dead.
“When you talk, you talk. When you shoot, you shoot,’” Harvey said, his hands forming revolvers. “These guys are busy talking like old ladies about, ‘What is Harvey going to do? What is he going to do?’ While they are talking, I am shooting.”
Harvey seems to be back in hot water and he is pretty much surrounded. Does he have a few more rounds to fire or is he just blowing bubbles?
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After selling Miramax to Disney in 2005 following a long battle, Harvey and Bob Weinstein formed the Weinstein Company with more than $1 billion in equity and credit arranged by Goldman Sachs. Then, in an unusual move, they diversified to smooth out the ups and downs of the business, investing in ASmallWorld.net, a social community for swells; Ovation, a cable channel; Genius, a video distributor; and, in a kind of throwback to the garmentos who created the movie business, they bought Halston, a storied if tattered fashion brand. An exclusive retail distribution arrangement with Blockbuster, the development of a direct-to-video business, and a separate fund for Asian films have further rounded out the company.
Board members, again with the not-for-attribution caveat, say that if Harvey wants to make more acquisitions, those would be financed by raising more money in the first quarter of next year. The core business, as they are quick to remind him, is still the movies.
But that business has changed. The Weinstein Company is still looking to acquire or produce something for small money and have it blow up huge. And for years, Harvey Weinstein was the first and last stop for indie hopefuls hoping to make it big.
Now, there are a dozen or more companies, many staffed by people who broke in with the Weinstein-era Miramax, that are looking for the same thing. Brad Grey, the head of Paramount, was once Harvey’s assistant, while David Linde, co-chair at Universal; Mark Gill, chief executive at The Film Department; Chris McGurk, chief executive of Overture; and Rick Sands, chief operating officer at MGM, along with a host of other marketing and distribution executives, were all schooled in the Weinstein method.
And the Weinstein-less version of Miramax has hardly gone away. Led by Daniel Battsek, the specialty division will be in the middle of this year’s Oscar race with “No Country for Old Men,” and “The Diving Bell and the Butterfly.”
Meanwhile, the Weinstein Company has either returned or sold several films it acquired with a flourish, including “Penelope,” “Vince Vaughn’s Wild West Comedy Show,” and “All the Boys Love Mandy Lane.” Many of its more recent acquisitions have been co-finance deals, which might also indicate they are striving to preserve limited filmmaking resources. (Harvey Weinstein said the brothers have been co-financing deals — along with the rest of the industry — since the day they got into the business.)
And the failure of many of the company’s high-profile efforts has hurt its position in vying for other promising films. Filmmakers who admire Harvey’s love of film and competitiveness nonetheless opt for partners who don’t have a reputation for going ballistic when they don’t get their way. (Last spring, when the director Luc Besson complained about the distribution of his movie “Arthur and the Invisibles,” Harvey called him a “has-been” and publicly offered him $1 million if he could prove the movie was as expensive to make as he claimed.)
Harvey insists he and his partners have already seen good returns. “Right now, we are printing money, and we had a fantastic board meeting two weeks ago,” he said. “I think the press is obsessed with us.”
Mr. Weinstein argues that even the box office losers will eventually perform because risk has been hedged and deals for international rights, DVD proceeds, and pay television one-offs will yield profits. At the Oscars, he expects “The Great Debaters,” a film directed by Denzel Washington and produced by Oprah Winfrey, and “Grace Is Gone,” a war-related film starring John Cusack, to be in the mix. There are huge box office expectations around “The Mist,” another Stephen King project from Dimension.
But if the Weinstein catalog does not contain its share of winners, the value of the entire enterprise will be called into question. It is, in part, a self-created problem, with Harvey’s refusal to sit quietly while he built the company — by overpromising and underdelivering, he created a huge opening for a whisper campaign by his critics. There is a legion of competitors in Hollywood and New York who only tolerated Harvey Weinstein when he was on top and who are eager to do a happy dance on his company’s grave.
They should not put their hands in the air just yet. The Weinstein brothers have roared back to life more times than the average monster in one of Bob’s money-making horror movies. But they remain deeply challenged, with some big losses on big bets, antsy investors and a lack of bench strength in a world of competitors they helped train and build.
That doesn’t mean Harvey is in danger of slipping below the surface — his backers have far too much at stake — but it could end up getting hotter in there still.
