Weal of Fortune: Mag Outlines Latest WeinCo Prognosis

To regular followers of the saga of The Weinstein Company, there's not much new ground broken in Tim Arango's Fortune Magazine profile of the brothers Weinstein, their board of directors and the organization's inconsistent box office performance over the last 18 months. Michael Cieply nailed the existential angles three months ago in The Times; Anne Thompson followed up in May with her own assessment. But apart from relaying Harvey's effortless passing of the Grindhouse-failure buck to his brother and his filmmakers, Arango does pay a revealing visit to the accounting room:

When Goldman Sachs set out to raise money for the brothers in the summer of 2005 -- as their association with Disney was coming to a close -- the bankers crunched the numbers for every movie Miramax and Dimension had ever made and compared their profit margins with the Hollywood average. According to Goldman Sachs, Harvey's movies averaged margins of 12% to 13%, and Bob's averaged in the 22% to 24% range. The Hollywood average is close to 8%, about the average margin that the Weinstein Co.'s slate has posted so far. In other words, so far the brothers are merely ... average.

The overall balance sheet, Arango also notes, is skewed just a tad based on the high profitability of TWC's stake in Genius Products, which releases the brothers' films on DVD for half the cut required from other distributors. In any event, the TWC board isn't sharpening its razors yet, though a new leader may not be as far off as you think:

"This fiscal year has been a disappointing one," says Tarak Ben Ammar, the Franco-Tunisian dealmaker and film producer who sits on the Weinstein Co.'s board of directors and whose firm, Quinta Communications, owns 3.3% of the 20-month-old company. "But a company is not built in one fiscal year ... Maybe we need to bring in a high-level CEO, but we'd need somebody who would be compatible with the market and investors and the brothers."

Right -- because there are tons of those people hanging around. Memo to Tarak: They hold 51 percent for a reason. If you you wanna shop for anything in the next six months, make it Maalox.

Posted at June 29, 2007 11:55 AM