Ron Tutor: The Lawsuits, Losses and Private Struggles of the Man Behind Miramax
A marble-appointed 737, a 258-foot yacht, a $32 million mansion and a $3 billion-a-year construction business. The charmed (and controversy-plagued) tycoon has succeeded everywhere but Hollywood, where his $700 million Miramax gamble has the town whispering: Was it worth it?
For much of the 1990s and 2000s, Miramax rode a wave of success and reinvented the independent film business. Led by the cantankerous Weinstein brothers — who sold their company to Disney in 1993 for $60 million but remained at the helm until 2005 — Miramax regularly turned out Oscar winners. The company, founded by the Weinsteins in 1979 and named after their parents, Miriam and Max, was created to distribute films the major studios didn’t consider commercially viable. Along the way, Miramax wound up becoming home to plenty of commercial smashes.
This impressive history made the 2010 purchase of the company by Tutor and partners a true surprise, in part because they outbid the Weinsteins and another high-profile duo, billionaire investor brothers Tom and Alec Gores. Both groups offered about $600 million for the company. The deal — struck in July 2010 and completed in December 2010 — raised eyebrows because of Tutor’s relative inexperience and his legal troubles.
“The film business to me is purely business,” he told THR when asked why he was interested in Hollywood, “even though I’ve always loved the movies and film.”
Tutor may love movies, but he hasn’t made or acquired any at Miramax. Instead, the focus has been on inking distribution deals. Under Lang, a former News Corp. executive who helped put together the video streaming website Hulu, Miramax closed deals that will generate $325 million in revenue during the next several years, including a Netflix streaming arrangement said to be worth more than $100 million. Such deals were of paramount importance because they provided Miramax with the necessary revenue stream to attract banks that would refinance the company. “I could see why people felt that they overpaid [for Miramax],” says Hallren. “But it appears that with what they’ve done, that might not be the case.”
Besides Barrack’s Colony Capital private-equity firm and Lowe, the other major investor in Miramax is Qatar Holding Llc., the investment vehicle of the Qatari royal family. But the size of the various owners’ investments is not clear. In all, they contributed about $200 million to the entity, with the remaining funds coming from a group of banks led by Barclays Plc. Qatar Holding has the biggest stake in the venture, though Tutor is the largest individual investor. Lowe’s stake is said to be small, and well-placed sources consider his involvement an attempt to add celebrity sheen to the group and burnish his business credentials as he plots a foray into politics. Lowe declined comment. Published reports and sources indicate that Tutor put up his own aforementioned $50 million for the transaction, though the refinance by Miramax in late 2011 with Barclays Capital and Jefferies Group allowed Tutor and others to recoup a large portion of their investments. The $550 million bond offering originally was slated to result in a dividend of about $142 million for investors, though they were expected to be paid less than planned, according to a December Bloomberg report.
When Tutor and partners acquired Miramax, there was hope from the independent film community that the firm would get back into the business of producing and distributing movies. At the start, there were signals that Miramax would do this. The Santa Monica-based company, which maintains a staff of about 50, hired former Focus Features executive Dylan Wilcox to handle acquisitions. It brought on producers Zanne Devine (Easy A) and Adam Fields (Donnie Darko) as consultants. Agents at major talent agencies say that Wilcox and others attend film festivals and take in screenings but don’t make offers on acquisition titles.
There is evidence, however, that Miramax is interested in expanding its library through acquisitions. In late 2011, it tried to purchase Summit Entertainment, which ultimately was bought by Lionsgate for $412.5 million in January. With a library of about 50 films, the Twilight studio would have provided Miramax with an infusion of new product.
“There needs to be some kind of renewal of the library in order to keep it viable and fresh. I don’t think at the time they acquired [Miramax] they knew how they were going to do it,” says a film-finance source who believes that under Lang, Miramax had no intention — at least in the immediate future — of making new movies. That decision was stunning, says this person, because at the time of the sale, the company had about 300 movie projects in development and rights to about 90 books. The new regime did cut a deal in December 2010 with The Weinstein Co. that gave Tutor and partners an option to co-finance eight sequels to Miramax films, including Rounders and Bad Santa. “Ron was very open and very fair about trying to do something with us,” says Glasser. “Even on the eight titles, they reached into the till and were good partners with the idea to do these eight together and make some business. We had nothing but a great experience.” However, sources say Miramax does not plan to exercise those options.
The departure of Lang signals that the direction of the company could be changing. Several sources say Lang was never part of management’s long-term plans for Miramax; instead, he was brought on board to shepherd quick digital deals that would ensure the refinance. He did not return phone calls seeking comment.
With the digital business in order, management could turn to film acquisitions and production — or even a sale of the company. While Hollywood tries to make sense of Tutor and his partners’ plans for Miramax, he and his colleagues have a decision to make that will go a long way toward illuminating the company’s new path. Whether the next CEO hired has production credentials will signal the firm’s intended course. In the interim, Miramax’s CFO, Steve Schoch, now serves as CEO, though sources say much of the decision-making power rests with Nanula, chairman of Miramax’s board and a principal at Barrack’s Santa Monica-based Colony Capital. The company remains guarded — it would not confirm the members of its board of directors, and Nanula and Barrack declined comment — but according to sources, Tutor is not involved in day-to-day operations. Still, Tutor told THR that in overseeing Miramax, he talks regularly with Barrack and Lowe, and the trio has a “businesslike yet friendship-based relationship.”