The real problem with The Weinstein Co. isn't the economy or debt restructuring issues, although that does not help. The Weinsteins are running out of time, because since they launched TWC in 2005 with plans for investor Goldman Sachs & Co. to raise $500 million in equity and $500 million in debt, they've been following an out-of-date business model. When Harvey says "we invented it," he's right. But that doesn't mean that the old Miramax model still works.
At their maximum scale and scope at Disney, the Weinsteins' Miramax topped out at more than 500 employees. Under their successor, Daniel Battsek, the Miramax staff has shrunk down to 80. The Weinsteins were producing $100-million Martin Scorsese period epics like The Aviator and Gangs of New York. Battsek aims at a $20-million budget cap (which he exceeds at his peril, as with Stephen Frears' Cheri, starring Michelle Pfeiffer, which opens stateside on June 26 after pulling middling reviews overseas). The Weinsteins laid off 24 employees last year, or about 11 % of their staff, reports the NYT. The company recently hired Miller Buckfire & Co. to restructure debt that is worth less in this rocky economic climate. Here's the Weinstein Co. statement:
"As a matter of practice, we have always worked with financial institutions to explore our options with respect to equity and possible investments and something we will continue to do. This was an ordinary course we took at Miramax, The Weinstein Company and every business venture we have had in our 30 year career."
The Weinsteins looked to the past when they bet on Quentin Tarantino, Robert Rodriguez and Rob Marshall, creators of key successes such as Pulp Fiction, Spy Kids and Chicago, to bring them renewed momentum. Grindhouse was a disappointment, and meanwhile the brothers weren't trawling for less expensive new talent. Star directors with hits under their belts expect to spend money to make money. While Marshall's star-studded musical extravaganza Nine could save the day, $80-90 million is a high number (TWC partnered with Ryan Cavanaugh's Relativity, and has sold most key territories overseas). Sure, the movie looks great. But it's got to be a global blockbuster.
As for Tarantino's Inglourious Basterds, which won an acting prize at Cannes, the $70-million movie could be an art-house breakout stateside and do solid international boxoffice, but it's never going to be a huge commercial play. Tarantino is back in the editing room. While Weinstein Co. partner Universal wouldn't mind a shorter movie, they're waiting to see how his new cut plays. The Cannes running time of 148 minutes (that's the official Weinstein Co. number, one minute more than Tarantino told me) is irrelevant, as the movie isn't final anyway. I'd argue for making Inglourious Basterds work as well as it can, whatever the length. In this case, making it shorter won't necessarily make it better. Time Out agrees.
As other specialty companies run on austerity budgets to stay ahead of the economic curve, the Weinsteins seem to be in a bigger-is-better time warp.