Weinstein Co. under pressure
Potential buyers are looking at parts of studio roiled by sex scandal
Troubles are escalating for Harvey Weinstein and his former company amid criminal investigations.
Hollywood is already starting to kick the tires of Weinstein Co., barely a week after sexual misconduct allegations surfaced against its ousted co-founder, Harvey Weinstein.
Woes escalated for Weinstein and his former company this week as police in New York and London began criminal investigations into alleged sexual assault by the film producer. Questions are also swirling about whether board members and other executives were aware of harassment claims, raising more doubts about the viability of the New York movie and TV studio.
Studios, production companies, distributors and other investors have been calling bankers to assess whether to bid for pieces of the company, as well as film and TV projects, if the firm is unable to stay afloat, said four entertainment industry executives who asked to remain anonymous to protect business relationships.
The company did not respond to requests for comment Thursday.
Weinstein Co. co-Chairman Bob Weinstein and President and Chief Operating Officer David Glasser have been scrambling to save the business as allegations mount against the “Shakespeare in Love” producer. Executives have made calls to creative partners to keep them from fleeing and have been working to rebrand and carry on under a different name after cutting ties with Harvey Weinstein, who owns about 42% of the business with his brother Bob.
But the board is coming under pressure from its lenders to liquidate Weinstein Co.’s assets, said people familiar with the matter. The firm was already facing financial strains because of a lack of commercial hits and increasing competition in the indie cinema space before Weinstein’s alleged misconduct surfaced.
Amid the widening scandal, Apple has already dropped a planned Elvis series by Weinstein Co., and Amazon.com has said it is reviewing its options on its projects with the embattled firm. And Hachette
Book Group, one of the country’s top publishers, said Thursday that it has “terminated” its deal with Weinstein Books.
“This company’s got no place to go in its current form,” said L.A. investment banker Lloyd Greif, chief executive of Greif & Co. “The value of the businesses is now in pieces, not as a whole, because this is such a stain on the company.”
Though Weinstein Co. as a whole is in peril, potential buyers may be interested in certain film and television projects that could be in limbo if they remain at the studio. The Weinsteins had been trying to unload part of their TV business, known for “Project Runway,” for years.
Also complicating matters is Weinstein Co.’s library of films. In 2010, Goldman Sachs and an insurance company took possession of more than 200 of the studio’s films as part of a debt restructuring. AMC Networks later acquired Goldman’s stake in the library.
Concerns about the company’s future escalated Thursday after the New York Police Department said it is seeking out women who may have been victims of Harvey Weinstein’s alleged behavior. Police in New York are said to be looking into a 2004 incident in which Weinstein allegedly sexually assaulted an actress.
“Based on information referenced in published news reports the NYPD is conducting a review to determine if there are any additional complaints relating to the Harvey Weinstein matter,” said Det. Sophia Mason of the NYPD. “No filed complaints have been identified as of this time.”
The LAPD is not currently investigating any claims against Weinstein.
At the same time, London law enforcement officers are reportedly pursuing their own sexual assault case against Weinstein over an incident that allegedly occurred in the 1980s.
In addition, Weinstein Co. is facing allegations that executives and board members were aware of settlements Harvey Weinstein had made with women since 2015. A person close to the board not authorized to comment said directors were made aware of at least one of the settlements when Weinstein’s contract was up for renewal in 2015. His new contract stipulated that he could be fired for violating a newly instituted code of conduct, the person said. The New York Times first reported the board’s knowledge of sexual harassment claims.
The disclosure comes just two days after the remaining members of the Weinstein Co. board, including Bob Weinstein, denied having any knowledge of misconduct, saying they were “shocked and dismayed” by reports. “These alleged actions are antithetical to human decency,” the directors said in a statement Tuesday. “These allegations come as an utter surprise to the board. Any suggestion that the board had knowledge of this conduct is false.”
The remaining members of the company’s board, Lance Maerov, Richard Koenigsberg and Tarak Ben Ammar, also signed the statement. Four Weinstein Co. board members resigned last week in reaction to the allegations.
The company was already vulnerable to civil lawsuits because firms are considered strictly liable for sexual harassment by managers under New York and California law. But the fresh details about the board’s alleged knowledge are potentially even more damaging, said Los Angeles attorney and former federal prosecutor Manny Medrano.
“That is profoundly problematic for the board and the company if it is in fact true that board members knew of this conduct by Harvey Weinstein,” he said.
Meanwhile, the scandal showed no signs of abating in Hollywood. In a series of tweets, actress Rose McGowan ramped up her attack on Weinstein and others in the entertainment industry including Amazon.com founder Jeff Bezos. McGowan accused Amazon of canceling a script she had in development at the studio after she raised concerns over Weinstein. “I told the head of [Bezos’] studio that HW raped me,” McGowan wrote on Twitter, apparently referring to Harvey Weinstein. “Over & over I said it.”