A Genius investment that Harvey Weinstein publicly once valued at more than $400 million is now worth zip.
The Weinstein Co., the film studio founded by Weinstein and his brother Bob, quietly terminated its 70 percent stake in home-video distributor Genius Products yesterday, The Post has learned.
The parting was a result of Genius’ decision to exit home-video distribution business. It’s selling the rights to distribute home-video releases from World Wrestling Entertainment, Sesame Street, Classic Media and RHI Entertainment to Vivendi Entertainment.
The price was not disclosed.
Genius held distribution rights to Weinstein Co. releases for a few more years, but let the studio out of its contract early as part of the separation settlement, say sources close to the situation. The Weinstein Co., in turn, struck its own deal with Vivendi, which will distribute Weinstein movies on the home-video channel.
While it lost $400 million on paper, a source said The Weinstein Co. is “not out any money.”
That’s partly because the studio made only a small financial investment in Genius; it got the bulk of the 70 percent stake in exchange for distribution rights to its movies.
Several factors conspired to sour Genius’ prospects over the last two years. DVD sales dried up, the retail sector consolidated, costs of managing physical distribution soared and Sarbanes-Oxley accounting requirements took a toll on the tiny company.
Plus, the initial movies made by the four-year-old Weinstein Co. weren’t all that good, making for low DVD demand.
Almost from the beginning, critics considered the investment a black eye for the studio, charging that it was a poor use of financial resources. It also gave Harvey-haters ammunition to claim that he was more concerned with empire building than moviemaking.