Trump Ally In, Harvey Weinstein Out at TWC
- Disgraced mogul Harvey Weinstein has resigned from the board of The Weinstein Co.
- TWC is not saleable to a public media company now, PR is unbearable
Tuesday, the Board members convened in NYC to ratify Harvey Weinstein’s termination and to vote on a rescue plan pitched by Colony Capital, run by President Trump’s ally Tom Barrack.
Tuesday, the remaining members of the TWC board voted to ratify Harvey Weinstein’s 8 October termination as co-Chairman, and to consider an immediate capital infusion from Tom Barrack’s Colony Capital that opens the door for Colony to buy the film and television production venture.
Harvey Weinstein owns about 20% of TWC, called into the board session.
Mr. Weinstein was sacked following an exposé in the NY-T’s that detailed numerous allegations of sexual harassment on the part of the Hollywood producer.
Brother Bob and COO David Glasser believed the company could weather the scandal, but more serious allegations of sexual misconduct, including rape, were raised in subsequent stories throwing TWC into a state of management and financial chaos.
If TWC is to forge a new future, either in whole or in pieces, one option is for brother Bob Weinstein to exit too, especially in light of an 17 October sexual harassment claim by Amanda Segel, an Executive Producer on Spike TV’s The Mist.
Ms. Segel says The Weinstein Company co-Founder Bob Weinstein sexually harassed her during production of the Spike TV series. Ms. Segel’s allegations reported by Variety and denied by Bob Weinstein’s lawyer Bert Fields, said the alleged harassment began in Summer of Y 2016 and continued on and off for about 3 months until Ms. Segel’s lawyer told TWC executives that she would leave the show if it did not stop.
The end of The Weinsteins and TWC
Tom Barrack’s plan is to break up and either sell off parts or bring in investors to salvage them.
TWC is now exposed to potential investor and victim lawsuits. To avoid exposure, any potential buyer could acquire whichever assets it deems worthy instead of buying the company outright.
Another option is to buy TWC out of Chapter 11 bankruptcy, which would offer some amount of protection against such lawsuits.
Harvey Weinstein is a big time Hollywood Democrat who donated millions over the years to Democrat causes and candidates, including former President Barack Hussein Obama and Hillary Clinton.
Tom Barrack, the Executive Chairman of Colony, was one of President Donald Trump’s most big donors. He hosted a major fundraiser at his home where the then-candidate met with many of Hollywood’s quietly conservatives. After the Y 2016 Presidential election, President Trump considered naming Barrack US Treasury Secretary.
Some history between Barrack and Weinsteins
In Y 2010, Colony bid against the brothers Weinstein for control of Miramax, the indy film studio they launched in Y 1979 and then sold to Disney in Y 1993. Harvey and Bob left Miramax in Y 2005 in an acrimonious split with Disney (NYSE:DIS).
When Disney put the asset up for sale, a group of investors that included Colony put up $663-M, $100-M more than the Weinstein’s bid.
Then in Y 2013 Miramax and TWC entered into a multiyear development and distribution deal drawing from the Miramax library.
When Miramax was sold last year to Qatar-based BeIN Media Group, the price was undisclosed, but Colony reportedly earned about 3.5X return on its investment.
Monday Tom Barrack said, “We are pleased to invest in The Weinstein Company and to help it move forward. 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. We will help return the Company to its rightful iconic position in the independent film and television industry.”
A remaining Board member, Tarak Ben Ammar said, “On behalf of the board, we are pleased to announce this agreement and potential strategic partnership with Colony Capital. We believe that Colony’s investment and sponsorship will help stabilize the Company’s current operations, as well as provide comfort to our critical distribution, production and talent partners around the world. Colony’s successful experience and track record in media and entertainment will be invaluable to the Company as we move forward.”
“Colony, like a lot of private equity funds, does distressed lending. They look for opportunities,” says another source. “Think of this as a very expensive short-term loan. In the meantime, they’ll talk about whether they can buy the company.”
Colony is a private equity firm that is part of Colony NorthStar (NYSE:CLNS), an investment firm Mr. Barrack founded in Y 1991 that now has $56-B in assets under management. While it is publicly traded on the New York Stock Exchange it is not a media-entertainment company, so it would be seen simply as an investor seeking to profit by turning around a distressed asset chock full of Oscar-winning films that return significant profits. The library has high value over time.