The Weinstein Co. is considering several deals to restructure its finances in order to improve liquidity and repay creditors, The Post has learned.
According to several sources familiar with the matter, The Weinstein Co. is in talks about an “off balance sheet slate deal,” in which an equity player would provide cash to help finance future productions.
Another option is the creation of an “acquisition fund,” through which brothers Harvey and Bob Weinstein could access a pool of cash to buy projects at film festivals, for instance.
The discussions have taken on more urgency given the weak opening of “Nine,” the musical starring Penelope Cruz, Nicole Kidman and Daniel Day-Lewis: The movie took in a disappointing $7 million at the box office last week.
The studio was banking on “Nine,” along with “Inglourious Basterds,” which has grossed more than $300 million worldwide, generating enough cash to fund ongoing and new productions, sources said.
“They were hoping ‘Nine’ would do ‘Chicago’-like numbers,” said a source, referring to the 2002 musical that Harvey produced and that grossed $170 million domestically and won Best Picture at the Academy Awards.
While “Nine” garnered five of The Weinstein Co.’s 12 Golden Globe nominations — the most nominations of any studio — the film won’t come close to matching “Chicago” at the box office.
Sources said the studio has enough cash on hand to fund its current plans to produce and market four films each from Harvey and Bob.
The current deal talks in part are aimed at repaying creditors, including Goldman Sachs, that are holding $500 million in studio debt insured by a division of Ambac Financial Group. The discussions also are designed to allow for the production of another four to six movies per year.
According to sources, the current thinking is that since Ambac’s own financial troubles likely mean that the insurer can’t repay the $500 million in debt in full, and the studio’s current assets are likely worth less than that amount, the best thing to do is let Harvey and Bob have a few more chances at bat in the hopes of hitting another home run on par with “Inglourious Basterds.”
“Ambac and Goldman have basically agreed to work with the Weinsteins to figure out a way to have the studio go forward in a healthy manner,” said one source with knowledge of the situation.
Said another source involved in the discussions: “The clearest path to getting everyone paid back is to have a financially strong studio.”
Among The Weinstein Co.’s upcoming releases are “The Road,” based on Cormac McCarthy’s novel, the Michael Cera vehicle “Youth in Revolt” and a sequel to the animated “Hoodwinked.”
Part of the studio’s strategy to preserve liquidity involves selling off foreign distribution rights. That strategy works with an underperforming film like “Nine” because it minimizes risk. Indeed, sources said TWC netted $50 million from the pre-sale of foreign distribution rights to the movie.
But the strategy doesn’t always work. With “Inglourious Basterds,” the studio’s upside is diluted since it has to share profits with Universal Pictures.
Though such sharing has its critics, a Weinstein supporter said the model is designed to “ensure long-term viability rather than short term success.”