Miramax founders Harvey and Bob Weinstein said they have raised $230 million in equity for their new film production company, according to regulatory filings.
The Weinsteins, who left Walt Disney Co. at the end of last month after producing such Oscar-winning films as "Shakespeare in Love'" and "The English Patient," have so far sold shares in Weinstein Co. to 18 investors, according to U.S. Securities and Exchange Commission filings this week.
The company is raising equity in stages through Goldman Sachs Group Inc., which also is arranging about $500 million in debt financing for a reported total $1 billion war chest to get the company through its early years.
The Weinsteins are now in negotiations with Wall Street firms, including hedge funds, that could increase the financing to $420 million as early as next week, Bloomberg News reported. The initial funding came from media companies and ad agencies, such as French TV broadcaster TF1 and Tarak Ben Ammar, the head of Quinta Communications SA.
The Weinstein brothers have taken longer than some expected to raise the money needed for their movie studio; they started to market shares in the new company in May. "This is a difficult environment for a new film company,'' Jack Liebau, president of Pasadena-based Liebau Asset Management Co., which holds shares of Walt Disney Co., told Bloomberg. "Home-video returns and the box-office decline represent some real challenges.''
Films produced by the Weinsteins during their 25 years at Miramax received 249 Oscar nominations and 60 awards. That success was expected to attract investors.
"I don't doubt they'll do it," said Jason Squire, editor of the Movie Business Book and an instructor at USC's School of Cinema-Television. "This is going to be one of the most exciting independent production companies out there. Based on their track record, they can make a compelling sell to investors."
In addition to making live-action and animated films, Weinstein Co. plans to offer cable television services, music, publishing and interactive entertainment.
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