Hollywood Babble On & On #1241: Got A Billion Dollars?

The investor cluster that owns the once powerful and feared Miramax Films is considering putting it up on the auction block, and they're asking for…

ONE BILLION DOLLARS!

Now I only have one reaction to that price…

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!

Okay, that's a little mean, I guess a more accurate reaction would be:

But seriously folks, let's take a look at what the company has to offer which is mostly the film library of 700 titles.

Libraries have value, because movies don't really make serious money until they are licensed to what are called the ancillary markets after their theatrical release. That means home video, television, and online streaming services.

A lot of money can be made this way, and the bigger the film library, the more money you can make. In fact, a lot of studios view the box office earnings as just gravy, and that the real money is in those ancillary markets.

However, there's a catch.

Several catches to be exact.

700 movies may sound big, but in the grand scheme of things it's actually not that big, especially when compared to the majors. The major studios literally have thousands upon thousands of titles in their libraries and regularly churn out new material by the pound.

Miramax has been more of less moribund for years, only sporadically putting out a handful of new films under the current ownership.

That's not good.

Because having seven hundred films is fine and all, but any film library, even if every film is as evergreen in popularity as Casablanca, your company is going to reach a point when the outlets you're selling to will say: "What else you got?"

And that's if every film in your library is as perpetually popular as Casablanca, and Miramax's stable is pretty light on films like that.

A lot of that has to do with how the company was run under the Weinstein Brothers. Under their reign Miramax had two business models; one was to acquire independent films for a theatrical release, and the other was to acquire independent films for the sole reason of keeping other distributors from getting them.

That means that for every movie Miramax released during that era, there were several that haven't been seen by a living soul since their Sundance Festival debut in the 1990s. This practice brought the company to the brink of collapse before being bought up by Disney, and it's what made Disney force out the Weinsteins a few years later.

Even if all of the films in question are brilliant, it's next to impossible to sell, for a decent price, rights to a flick that no one can remember, and many of films in the Miramax library are not brilliant at all.

That means that out of the 700 films in the library, maybe about 200, at most, are sellable.

That ain't healthy.

"But what about remakes?" you ask, waving your hand and hooting like Horshak. "Couldn't you remake Miramax movies into big blockbusters?"

Well, you could do remakes of some of the films in the library. But remaking the Oscar winners would offend fans, and remaking the unknowns would just befuddle people. You might as well just make an original film from a script no one has heard of because at least then you could avoid being entangled with…

The Weinstein Brothers.

You see, as both the producers and studio bosses of those pictures they made sure that if anyone wanted to do a remake, reboot, re-imagining or sequel would have to involve them.

The problem is that if you're 90% of people who have done business with them in the past, you are far less likely to want to do business with them again.

So, is the business really worth $1 billion?

I'm not even sure it was worth the $600 million the investors gave to Disney back in 2010.

Anyway, that's what I think.