Walt Disney Co. agreed to sell Miramax to investors including Ronald Tutor and private equity firm Colony Capital LLC for more than $660 million, ending a six-month search to find a buyer for the art-house moviemaker.
The sale to Filmyard Holding LLC, backed by partners including construction executive Tutor and Colony, is expected to be completed by the end of the year, Burbank, California- based Disney said today in a statement. Disney, the world’s largest media company, began winding down Miramax, founded by brothers Harvey and Bob Weinstein, last October.
“The sale fits into a much wider logic with studios reviewing where they can save money by selling some parts of the business or bringing down budgets for film and reviewing and redoing actor deals,” said David Hancock, head of the cinema market at researcher Screen Digest in London.
Miramax, with rights to more than 700 titles including Academy Award winners such as “Chicago” and “Shakespeare in Love,” was one of several film assets on the block. Liberty Media Corp. agreed to sell its Overture unit to Relativity Media LLC last week. Metro-Goldwyn-Mayer Inc. is seeking buyers after falling behind on $3.7 billion of debt.
“Our current strategy for Walt Disney Studios is to focus on the development of great motion pictures under the Disney, Pixar and Marvel brands,” President and Chief Executive Officer Robert Iger said in the statement.
Disney fell 11 cents to $33.60 at 12:24 p.m. in New York Stock Exchange composite trading. The stock had gained 4.5 percent this year before today.
Tutor, chairman and chief executive of Sylmar, California based Tutor Perini Corp., began negotiations for Miramax after Disney ended talks with Los Angeles investor Ron Burkle and the Weinsteins, who were working on a $625 million offer, people with knowledge of the situation said earlier this month.
“The new buyers can’t just mine Miramax’s existing catalog so they must have some plans for future production,” Hancock said. “With DVD sales declining and video-on-demand not contributing as much as was hoped, the value of catalogs have gone down.”
Miramax’s top-grossing film was 2002’s “Chicago,” taking in about $171 million, followed by 2000’s “Scary Movie” with $157 million and “Good Will Hunting” with $138 million, according to figures from U.S. researcher Box Office Mojo.
The Weinsteins sold Miramax, named after their parents Miriam and Max, to Disney in 1993. The two, who left in 2005, control rights to some films and are acquainted with both Tutor and Barrack, according to one of the people. Disney had been seeking $600 million to $700 million for Miramax.