The Weinstein Company is in talks with Colony Capital to sell all or much of the besieged studio to the private equity firm after the movie company's brand has been blotted by accusations that former co-chairman Harvey Weinstein sexually harassed women over decades.
"We are pleased to invest in the Weinstein Company and to help it move forward," Colony founder and executive chairman Thomas J. Barrack Jr. said Monday.
Barrack is an intimate of President Trump's who helped save the Trump real estate empire in the 1990s and was the top fundraiser for Trump's presidential campaign. He told The Washington Post in a story published last week that he is still close to Trump but is disappointed in some of his rhetoric, saying, "He's better than this."
Founded in 1991, Colony Capital is the private equity arm of Colony NorthStar and has extensive experience in the television and film industry since its acquisition of Miramax from Walt Disney Co. in 2010.
"We believe the company has substantial value and growth potential, and we look forward to working with the company's critical strategic distribution and production partners to help preserve and create value for all stakeholders, including its employees," Barrack, 70, said in a statement. He declined an interview request.
Weinstein, 65, who has been one of the most powerful figures in Hollywood for decades, was fired by his former company last week as reports of allegations of sexual harassment proliferated. Several film stars, including Gwyneth Paltrow and Angelina Jolie, accused Weinstein of sexually harassing them.
Weinstein founded his eponymous film company with his brother Bob in 2005. Before that, the Weinsteins founded Miramax, a premier independent film studio.
It is difficult to put a dollar amount on the value of the Weinstein Co. because it is privately held. The 150-employee company has had success in both television and film. The studio makes movies such as the lowbrow "Piranha 3-D" and "Scary Movie 4," but is best known for its higher-quality films such as "The Iron Lady," starring Meryl Streep, "The Reader," and popular moneymakers such as Oscar-winner "The King's Speech" and "Silver Linings Playbook." The company also produces the television show "Project Runway," which is in its 16th season and is hosted by supermodel Heidi Klum.
"I am sure Colony is getting it at an amazing price," said Eric Schiffer, chairman of Los Angeles-based Reputation Management Consultants. "Right now there is a radioactive element to anything Weinstein. A lot of players on the financial side won't touch it."
In making his investment in the Weinstein Co. - in anticipation of a possible purchase of all or part of its assets - Barrack is following an investment strategy that he has used for years. He specializes in finding distressed properties, investing in them and reselling them at a large profit.
He also has experience in the film business. After Weinstein's company sold Miramax to Disney in 1993, Barrack and some partners purchased Miramax in 2010. Barrack became chairman and helped engineer one of the first deals that licensed content to Netflix and other streaming services. That, in turn, enabled Barrack's company to sell its Miramax stake to Qatari investors for what he said was a fourfold profit.
Barrack's company has also worked "extensively" with the Weinstein Co. under a joint venture that began in 2013 in which they produced content from Miramax's collection of films. At the time, Barrack on CNBC praised the storytelling "genius" of brothers Harvey and Bob Weinstein.
Weinstein's troubles have continued to grow, including accusations that he raped women. Weinstein said through a spokesman that any sex he has had with women was consensual.
New York City police said in a statement that they are following up on reports "indicating that there may be additional victims of sex offenses by Harvey Weinstein in New York City" and are "conducting a review to determine if any official complaints have been received."
Five board members of the Weinstein Co. have resigned. Goldman Sachs said last week that it was exploring options for its stake in the entertainment company, which is a relatively modest amount at less than US$1 million (NZ$1.4m), according to reports.
The studio has postponed the release until next year of its forthcoming film "The Current War," a period film about the rivalry between scientists/entrepreneurs Thomas Edison and George Westinghouse.
Bob Weinstein distanced himself from his brother in a recent interview with the Hollywood Reporter, saying he has been "in a waking nightmare" since the allegations surfaced. "My brother has caused unconscionable suffering," he said.
The Academy of Motion Picture Arts and Sciences at an emergency session over the weekend voted to expel Weinstein from its organization over the sexual harassment and rape accusations.
"We will help return the company to its rightful iconic position in the independent film and television industry," Barrack said in a statement.