Layoffs, Defections: Is The Weinstein Co. for Sale?
Harvey Weinstein's board ponders the future (with Ron Burkle?) as the studio makes a big bet on Tarantino's 'Hateful Eight.'
This story first appeared in the Nov. 27 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
On Nov. 16, The Weinstein Co. revealed it will slash nearly one-fifth of its staff, mostly from the film division. But are Harvey and Bob Weinstein looking to unload more?
Sources say TWC is considering selling part or all of the company the brothers founded in 2005. Among the intriguing scenarios: Billionaire Ron Burkle is said to have expressed interest in purchasing TWC and merging it with Independent Talent Group, a U.K. agency in which he has a big interest. A Burkle rep declined comment, but a source close to him says, "Ron thinks very highly of Harvey." TWC also declined comment.
TWC, which was close to a deal to sell its TV division to ITV in April for as much as $950 million, has been plagued by executive defections. Marketing president Stephen Bruno exited for Netflix in October 2014, soon after the departures of president of production and acquisitions Dylan Sellers and TV chief Meryl Poster. Now about 50 positions will be cut. In July, COO David Glasser announced abruptly that he was resigning, only to return six weeks later with a three-year contract. Tom Quinn and Jason Janego, heads of TWC's boutique distributor Radius, bolted in August to start their own label with Tim League.
In addition, talent reps have complained that TWC is slow to pay fees and residuals. Behind the scenes, Canadian film financier Jeff Sackman recently exited TWC's board, and Cablevision CEO James Dolan, a close friend of Harvey Weinstein, joined. Although the Weinstein brothers hold a big stake in TWC, they do not own controlling interest. They also do not control the board, which "has not been happy for some time," says a board source.
There are more than 30 investors in TWC, including Goldman Sachs, ad agency group WPP, Tunisian entrepreneur Tarak Ben Ammar and hedge funds like Ziff Brothers. Ben Ammar, also a member of Vivendi's supervisory board, is said to be calling the shots with TWC's board.
During the past two years, the film unit has a mixed record. This summer's boxing drama Southpaw and animated Paddington were hits, but the pricey acquisition Begin Again flopped, as did Bradley Cooper's recent release Burnt. A great deal is riding on Quentin Tarantino's The Hateful Eight (Dec. 25), which sources say cost about $70 million.
Talks with ITV to buy TWC's TV unit stalled in part because of the status of Harvey Weinstein's employment contract. But the brothers recently re-upped their deals for three years, and layoffs are intended to make the company leaner and more efficient. "The board reached an understanding with the brothers, and they are making resources available again," says the board source. "They had been too prolific in film acquisitions and production; TV requires less capital. Significant players are now circling — that's why [these layoffs are] not surprising."