Disney Sells Miramax for $660 Million
Theagreed late Thursday to sell Miramax Films to an investor group for about $660 million, but the art film unit will not be out of Disney’s hair for another year.
In selling Miramax to a group that includes the construction executive Ronald N. Tutor, Disney agreed to distribute films from the studio and its library for as long as a year, said people who had been briefed on the deal and spoke on condition of anonymity to keep from disrupting it.
The distribution agreement promises to shore up the Tutor group as it completes financing arrangements — which include equity and bank debt — for a purchase that is priced considerably higher than other bidders were willing to pay.
Potential buyers as highly motivated as Bob and— the brothers who founded Miramax three decades ago and sold it to Disney in 1993 — for months had argued that Miramax and its 700-film library, which includes “Chicago” and “No Country for Old Men,” was worth less than $600 million in the face of steadily falling home video revenue.
Neither Mr. Tutor nor Thomas J. Barrack Jr., the chief executive of Colony Capital, which joined Mr. Tutor in the purchase, responded to queries on Friday.
But one person who was briefed on the transaction said the group was relying on $50 million in cash that would come with Miramax and receivables valued at slightly less than half the purchase price. The price is about four times the company’s annual cash flow.
Disney said the transaction, which must comply with federal antitrust regulations, was expected to close between Sept. 10 and Dec. 31.
“Our current strategy for Walt Disney Studios is to focus on the development of great motion pictures under the Disney, Pixar and Marvel brands,” Disney’s chief executive,, said in a statement.
Mr. Tutor, who is the chief executive of the Tutor, Mr. Barrack and their backers bought Miramax through a company called Filmyard Holdings.
A spokeswoman for Colony declined on Friday to say whether the buyers intended to restart Miramax as an operating studio — a daunting, expensive task when small film companies like Overture Films, Apparition and Senator Entertainment have struggled or folded.
Ron Burkle, an investor and supermarket executive, had been allied with the Weinsteins in their bid, which once led in a process that has gone on for months. Many potential buyers have kicked the tires, then walked away. The Burkle-Weinstein group had offered about $565 million.
As much as $150 million of the Miramax unit’s value, according to one person who was briefed on the transaction but asked for anonymity because the talks were private, remains tied to film franchises, including the “Spy Kids,” in which the Weinstein brothers have rights.
It was unclear how Mr. Tutor’s group planned to deal with the Weinstein presence, given the brothers’ chagrin at not having prevailed in the bidding. A spokeswoman for the Weinsteins did not respond to queries as to whether they planned to act to protect their stake in Miramax as the Tutor deal closes.
Miramax virtually created the art house boom in the 1990s by turning offbeat, inexpensive movies into mainstream hits. In recent years, as the economics of independent films shifted Miramax declined until Disney virtually shuttered it last fall.