Miramax Buyers Said to Plan Other Library Purchases, Won't Make New Films
Miramax intends to seek more film assets once investors led by Colony Capital LLC and construction executive Ronald Tutor complete their purchase of the Walt Disney Co. unit, a person with knowledge of the plans said.
Future deals will likely also focus on libraries of older films, said the person, who wasn’t authorized to speak publicly. Colony Capital, led by Chairman Tom Barrack, joined Tutor and other investors yesterday in a $660 million accord to buy Miramax, whose main asset is more than 700 movies that have already been released.
The investors see an opening to bid on film libraries, which have been discounted by other potential buyers as a result of shrinking DVD sales, the person said. No specific assets have been identified. Colony Capital, Barrack’s Los Angeles-based private-equity group, and Tutor declined to comment, said Kristin Celauro, an outside spokeswoman for the buyers.
Colony Capital and Tutor plan to hire an executive to exploit the Miramax library when the deal closes by the end of the year, the person said. No new production is planned. Instead, the new owners intend to seek distribution arrangements for the half of the library that isn’t covered by TV agreements.
Miramax, maker of maker of Academy Award winners such as “Chicago” and “Shakespeare in Love,” was one of several film assets on the block. Los Angeles-based Relativity Media LLC agreed to take over the marketing and distribution operations of Liberty Media Corp.’s Overture unit last week. Metro-Goldwyn- Mayer Inc., the studio that owns a library with more than 4,000 titles, is seeking buyers after falling behind on $3.7 billion of debt.
Miramax has distribution in the U.S. through agreements between Englewood, Colorado-based Liberty’s Starz pay TV service and Burbank, California-based Disney. The buyers are paying about four times the library’s cash flow, the person said.
Many of those agreements expire within three years, giving Tutor and Colony Capital the ability to sign new TV, Internet and other digital agreements, the person said.
Tutor brought Colony Capital into the deal to help finance the purchase. Barrack decided later to personally invest, according to an executive with knowledge of the arrangement. The group is still seeking debt financing before the deal closes.
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