Weinsteins Struggle to Regain Their Touch

IN the wee hours of Friday morning, Quentin Tarantino stood in a West Village bar that had opened for him and his entourage — cast members of his new movie, “Inglourious Basterds,” and his longtime producers, Bob and Harvey Weinstein. Swinging a blue cocktail in one hand, he held forth about the time that Harvey told him he’d like to invest in a restaurant.
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Francois Duhamel/Weinstein Company

Eli Roth, left, and Brad Pitt in “Inglourious Basterds,” a make-it-or-break-it gambit for the Weinstein Company.

The goal, Harvey explained to Mr. Tarantino at the time, wasn’t to schmooze, or to get the best table. New York City had just banned cigarettes from restaurants and Harvey, then an avid smoker, didn’t approve.

“He said, ‘I want to light up in my own restaurant and blow smoke in the fire marshal’s face,’ ” Mr. Tarantino recalled.

Vintage Harvey chutzpah. The story killed, and when the laughing died down, Bob smiled, waited a beat and added another punch line.

“A million dollars,” he sighed, “for a cigarette.”

Ah, the flush years. They must seem kind of distant now. Because four years after Disney bought the Weinsteins out of Miramax, the company that first ushered indie films into the multiplex, the brothers are under serious stress.

A full accounting of their agita begins, naturally, with a batch of underperforming movies. Since opening its doors in 2005, the Weinstein Company has released about 70 films, and more than one quarter of them failed to break the $1 million box-office mark in the United States. Thirteen of these took in less than $100,000.

To complicate matters, the company’s beloved reality television show, “Project Runway,” was until recently sidelined by litigation. Harvey decided last year to move the show from Bravo to Lifetime, prompting NBC, which owns Bravo, to sue, contending that it had the right to match Lifetime’s bid and keep the program. In April, the Weinstein Company settled for an undisclosed sum, and those backstabbing fashionistas will return to the air, at long last, on Thursday night.

Yes, the brothers have had triumphs as well. Bob, who handles the lowbrow genre stuff, scored with the supernatural thriller “1408” and “Scary Movie 4.” (These brought in $72 million and $91 million, respectively.) Harvey showed a bit of the maestro’s touch with “Hoodwinked,” and with “The Reader,” which has taken in $101 million around the world, despite some tepid reviews, and won Kate Winslet an Oscar.

But the Weinsteins’ flop-to-jackpot ratio has been high enough to prompt the brothers to hire Miller Buckfire & Company, financial advisers who help troubled clients restructure. Last week, the firm finished its review and is urging Team Weinstein to release and promote only 10 movies a year, unload unpromising titles from its film library and avoid empire-building.

To shore up their finances, the brothers received a bridge loan a few months ago estimated at $75 million from Ziff Brothers Investments, according to two people familiar with the loan who requested anonymity because they weren’t authorized to speak publicly about it.

“We are a private company and aren’t going to comment on unsubstantiated claims from unnamed sources,” Harvey says of the bridge loan. He points over and over to what he describes as a robust pipeline of film, theater and television projects, not to mention a library of 250 films. Sit tight, he advises, and don’t bet against us.

But some backers of the Weinstein Company say they’re getting anxious. They were corralled in 2005 by Goldman Sachs, which helped raise $1 billion for the company. At the time, filmmaking had acquired a certain cachet in private equity circles, and here was a chance to bankroll what were arguably two of the greatest movie producers in modern cinematic history.

Starting in the late ’80s, the Weinsteins produced “Pulp Fiction,” “Shakespeare in Love,” “The English Patient,” “My Left Foot,” “Good Will Hunting,” “The Piano” and hundreds of other movies, garnering 249 Academy Award nominations and three Oscars for best picture. In one 11-year stretch, they racked up 13 best-picture nominations.

SO what happened? In part, the Weinstein Company is coping with the same problems facing every other studio, most notably the grim slowdown of the DVD market. But plenty of the Weinsteins’ wounds are also self-inflicted. Instead of using their lush, Goldman-fueled pile of start-up money to focus on filmmaking, the brothers ventured into such new realms as fashion (buying part of Halston, the once-storied label), online social networking (through A Small World, known informally as MySpace for Millionaires) and a piece of Ovation, the cable network.

These were all Harvey’s ideas — his attempt, he says, at a Barry Diller-style conglomerate. The problem wasn’t just that the companies failed to generate vast profits. It’s that they took Harvey’s eye off the film ball, which is why he kept whiffing.

“What happened was, I got more fascinated by these other businesses and I figured, ‘Making movies, I can do that in my sleep,’ ” he says in an interview in his office in downtown Manhattan. “I kind of delegated the process of production and acquisitions. Yes, I had a say in it, but was I 100 percent concentrating? Absolutely not. I thought I could build the company and delegate authority, and that’s where it went wrong.”

Bob, meanwhile, has disavowed his goal of becoming the next king of African-American urban comedies, an unlikely ambition for a Jewish guy from Queens. But a few years ago, he took note of Tyler Perry’s success, and it looked like easy money. Bob produced “Long Shots,” with Ice Cube, and “Soul Men” with Bernie Mac and Samuel L. Jackson.

“Did like $15 million gross,” Bob says of “Soul Men,” “and it was a relatively expensive, $20 million movie. And for an African-American movie, there’s no foreign business. So those were two bad missteps, definitely.”

For months, the brothers have ignored media requests for comments, leaving lots of “Are the Weinsteins goners?” articles and blog posts with boilerplate denials offered up by their representatives. The two broke their silence to deliver this very simple message: We’re back to what we know. Bob is planning three new “Scream” films, the most profitable franchise in the Weinsteins’ history. Harvey has sworn off interest in the nonmovie parts of his business, sounding a bit like a married man lamenting a fling.

“I’m going to just do this and nothing else,” he says.