Sunday, 18 April 2010

Hollywood Babble On & On #492: Take My Advice Please

Welcome to the show folks...

The Weinstein Bros. and the victims of Harvey's hypno-coin Ron "Paper or Plastic" Burkle, and hedge fund Fortress-Colbeck have set up an "exclusive negotiating window" with Disney to buy Miramax to haggle over their offer of $625 million.

So now it's time for me to offer my advice to the other major bidders, David Bergstein/Pangea Media, and Tom & Alec Gores/Platinum Equity whether they want it or not.


That's right, just walk away. Let the baby get its ba-ba, and by "baby," I mean the Bros. Weinstein, and by "ba-ba" I mean Miramax.

Let me explain, and the reasons are different for both contenders, so I'll address my advice to them individually.

DAVID BERGSTEIN / PANGEA MEDIA- Your companies are being picked apart by creditors and forensic auditors. It's only a matter of time before they find something to screw you. If there's one thing I've discovered about white collar prosecutions they don't really need to find anything actually criminal to stick you in a cell with a biker named Bubba who wants to know if you're "open-minded," and it isn't your mind he's talking about.

This is especially true when you try to play clever dick with a bunch of different holding companies, shell corporations, and a constantly shifting financial situation. All a jury needs to see is just how convoluted your businesses are, and they will convict, because they will assume that you have to be guilty of
something, reasonable doubt be damned.

So here's my advice: Give up on Miramax, try to make some sort of deal with your creditors, and maybe pay some of the bills you already owe, before racking up any new trouble. Because that's all you're going to get, if you keep chasing Miramax, more trouble.

TOM & ALEC GORES / PLATINUM EQUITY- Now I'm offering the two of you different reasons for walking away from Miramax.

Chiefly, your bid is too serious. This
negotiating window with the Weinstein's shows that Iger has no intention of letting anyone who might actually do anything productive with Miramax have a chance of winning unless they pay waaaay tooooo much for the company.

$625+ million is definitely hitting the realm of waaaay tooo much, especially for what is basically a name and a library of films of limited profitability, whether it be in TV/home video sales, or remakes, and convoluted rights management. Those same ownership rights means that you'll be stuck having to deal with the Weinsteins with almost every single decision made over that library.

So here's a new plan.

1. Leave the bidding for Miramax.

2. Buy Overture Films, and its home video sister company Anchor Bay.

3. Restructure Overture Films with a new lean structure, possibly new management, and more importantly...

4. A new name. Overture Films is possibly the dullest name on can get for a film company. Summit implies reaching for heights, Lionsgate implies an exotic and powerful animus, with endless possibilities lying just beyond some sort of gate. The name Overture comes across as snobby, dull, and pretentious. Plus, it has a great big goose egg at the opening of the name, a big fat zero. Find a name that implies energy, drive, and most of all excitement.

5. A new mission for the restructured/rebranded Overture Films. Lionsgate seems too wrapped up with fighting with Carl Icahn, and the majors are too wrapped in turning everything into overpriced 3D mega-busters with a frenzy that will only ensure that the whole thing will crash and burn very quickly. That means that there will be gaps in the market that you can exploit inexpensively. Corner that market, in alliance with independent producers/financiers left otherwise in the cold by the others.

Then, once you've built this new company up, you can...

6. Buy Miramax. That's right, walk away now, win later. How? It won't be too long before the Weinstein Bros. bring the company, and possibly their financial backers to ruin. That will create an opportunity to swoop in and buy out the library and the name completely, without the Weinsteins involvement and at a price more in line with their actual value.

Well, that's my smug-know-it-all advice, and I hope you take it.

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