It has been one of the great experiments in motion picture history: a company that not only has dared to stake its place alongside the major studios but often has beaten them at their own game; a family business that has grown to be worth more than $1.5 billion; a mini-studio that not only has made breakthroughs in the independent film industry but also, in many ways, has come to define it.
Twenty-five years after Miramax Films was founded and 11 years after it was purchased outright by the Walt Disney Co., the company is in the news as never before. After two rounds of layoffs that have eliminated 26% of Miramax's work force -- and amid speculation that Bob and Harvey Weinstein, brothers who founded the company, might contemplate striking out on their own -- its achievements stand in even bolder relief.
The "little company that could" has produced some of the best pictures of the past quarter-century and has become as familiar to many Americans as Warner Bros. Pictures or 20th Century Fox -- arguably the second-most-important motion picture brand behind Disney.
As Martha Stewart Living Omnimedia is associated indelibly with its founder, so Miramax is linked inextricably with its co-chairmen: the Weinsteins from Queens, N.Y. Dynamic, controversial, brilliant, iconoclastic, loved and sometimes reviled, the brothers are the closest thing modern Hollywood has to the old-school moguls -- the Louis B. Mayers, Harry Cohns and Samuel Goldwyns -- who founded the movie business.
"They are the only old-style studio owners left," says producer Lawrence Bender, who has worked with the Weinsteins for more than a decade on films including Quentin Tarantino's 1994 classic "Pulp Fiction." "They are very, very passionate about their movies and have very strong opinions. Sometimes, if you sit in a room and talk about a movie, they are incredibly helpful. They are very movie-driven; they are film guys."
Adds Kevin Smith, who began working with the Weinsteins before the bow of his 1994 low-budget directorial debut "Clerks": "These guys are not just executives; they are lifers -- they created the company. They put their name on (a film), and it means something to them. These dudes are not fear-based creatures; they are in it for the artistry. They are also businessmen, so they want to make a buck, but it's not about churning out programrs for these guys. I haven't met their ilk in any other places in the business."
If Harvey Weinstein's flamboyant, often-incendiary personality has made him the better-known of the pair, then Bob Weinstein's relatively low-key contributions have been equally significant -- especially his oversight of Miramax sister label Dimension Films, which has turned such genre releases as 1996's "Scream" and 2000's "Scary Movie" (and their sequels) into blockbusters that frequently bolster Miramax's finances.
Because the brothers have worked together so closely, it is nearly impossible for outsiders to discern who is more responsible for the company's bottom line. What's more, determining the nature of that bottom line has been a subject of considerable debate during recent months as Miramax has reached perhaps its most critical juncture.
A year before the planned Sept. 30, 2005 expiration of the Weinsteins' Disney contracts, insiders were discussing the hitherto-inconceivable notion that one or both of the brothers might leave the company on that date. Sources say both sides have agreed that Disney will not exercise an option that would have kept the Weinsteins under their present contract terms for another four years.
"Bob and Harvey hope to reach an amicable resolution that will keep them together at Disney," Miramax spokesman Matthew Hiltzik says. Squelching reports that the brothers might go their separate ways, he adds, "Any resolution will have Bob and Harvey united."
Be that as it may, the recent Miramax staff cutbacks have fueled speculation, with rumors hinting at still-deeper cuts by year's end. Generating further controversy, word has chief operating officer Rick Sands in discussions to exit his post and take a similar job at DreamWorks.
But more than any other catalyst, gossip has been triggered by conflict between Harvey Weinstein and Disney CEO Michael Eisner. In June, three months before announcing plans to retire from his post in 2006, Eisner alleged that Miramax had been unprofitable during three of the past five years; Hiltzik quickly shot back that the company in fact had been profitable during all five of those years.
One can argue back and forth about profitability -- and Miramax and Disney have -- but the fact remains that the Weinsteins have earned bonuses during each of the past five years, often in the $10 million-$20 million range. Insiders say the brothers jointly might have received even more than those amounts in 2003.
Miramax's year-to-date boxoffice (through Sept. 12, including Dimension releases) is $239.1 million, from 19 active titles. Last year, the studio earned $695.6 million from 31 active titles; in 2002, it grossed $394.8 million from 39 active titles.
But what makes any financial assessment of Miramax tricky is that Disney does not break out the division's numbers, and the boxoffice performance of its releases gives no indication of profit-to-cost ratios or Miramax's own investment in each picture.
In fact, Miramax claims that some of its most high-profile disappointments have been profitable. For example, while Martin Scorsese's 2002 epic "Gangs of New York" is estimated to have cost $100 million but earned only $77.7 million domestically, Miramax has stated that its investment was capped at less than $30 million, that Initial Entertainment Group's Graham King took foreign rights for $65 million and that the movie went into the black for both parties.
"The numbers worked," King says. "Miramax recouped its investment, and so did we."
Likewise, 2003's "Cold Mountain" earned $95.6 million at the domestic boxoffice and reportedly cost $70 million-$80 million. Again, Miramax has said the movie was profitable, but other sources are less sanguine. One insider estimates that Miramax spent as much as $40 million to market Anthony Minghella's Civil War drama, hoping that a best picture Oscar would boost its library value -- only to see the film fail to receive a nomination in that category.
Miramax continues to make expensive features including "The Aviator," Scorsese's latest venture starring Leonardo DiCaprio as Howard Hughes. That picture, with a reported budget of $110 million-$120 million, was put together by King, with Miramax taking domestic rights along with Warners. "Aviator" is set to open Dec. 17 in domestic theaters.
Such large productions reportedly have added strain to the Weinsteins' relationship with Eisner, who has veto power over any movie that costs Miramax more than $70 million-$75 million and who is said to be concerned that the company has moved away from its initial mandate to make lower-budget specialty releases and genre product.
Perhaps more important is the clash between the corporate titan and one of the great maverick personalities of our time: Harvey Weinstein, whose style seems a throwback to those founders of Hollywood who built "an empire of their own," breaking rules and taking giant risks. Weinstein is a fascinating anachronism who acts on gut instinct in a world of MBAs obsessed with test screenings.
Eisner's vetoes frequently have proved more questionable than Miramax's risk-taking. Eisner refused to allow the Weinsteins to greenlight "The Lord of the Rings," for example, despite the fact that Miramax had spent $10 million-$11 million to develop a pair of films based on J.R.R. Tolkien's fantasy novel franchise.
New Line eventually struck boxoffice gold with what became a "Rings" movie trilogy, and insiders say the Weinsteins were furious that the lucrative venture slipped out of their hands -- though the complex deal they brokered with New Line gave the brothers a hefty chunk of the back end.
"When it was clear that Harvey was not going to be able to move forward on the project, based on cost, he agreed to let (director) Peter Jackson set it up in turnaround," says Ken Kamins, Jackson's manager and a pivotal figure in getting the "Rings" movies made while an agent at ICM. He adds that Harvey Weinstein allowed Jackson to take the project elsewhere, "on condition that his costs were paid. (Weinstein) got 5% of first-dollar gross, and he and Bob were executive producers on the films."
That 5% share actually is divided between the Weinsteins personally and Disney, with each party receiving 2.5%. How much money that will translate to when the "Rings" cycle finishes its run in ancillary markets is anyone's guess, but insiders estimate the amount at $60 million-$100 million.
Then there is "Fahrenheit 9/11." After Miramax had paid to make Michael Moore's much-ballyhooed documentary, Eisner refused to let the company release the film, fearing it might damage Disney's relationship with Florida Gov. Jeb Bush and thereby affect activities at Orlando's Walt Disney World. "Fahrenheit," made for $6 million-$7 million, has become the most profitable documentary of all time as a Lions Gate release.
If the "Fahrenheit" debacle has helped to swell cinema coffers, it also has cracked wide open the conflict between Eisner and the Weinsteins, who have had an uneasy relationship since joining forces in 1993. For years, the executives communicated through intermediary Jeffrey Katzenberg, who brokered the original Miramax/Disney deal with current MGM vice chairman Chris McGurk. But Disney insiders say top-level executives at the company more frequently have been in conflict with the Weinsteins of late.
One source said the situation might have become worse when Eisner learned that Weinstein had dinner with Comcast CEO Brian Roberts days before that company launched its unfriendly takeover bid for Disney in February. But Hiltzik is emphatic that Weinstein never would have engaged in discussions about a Disney takeover.
The relationship had reached a low point by summer, when Harvey Weinstein entered discussions to change his Disney deal in a manner that would make him quasi-independent.
One possibility has Weinstein raising money to finance films independently of Disney, though the titles would be made and released under the Miramax label.
According to that scenario, Weinstein would raise $400 million-$500 million to finance an ongoing slate. Two figures who might help Weinstein put that money together are banker Steven Rattner, founder and head of private investment firm the Quadrangle Group Llc., and Cablevision Systems Corp. CEO James Dolan. Both are old friends of the Weinsteins, and the latter was a key ally of Harvey's in setting up the post-Sept. 11 Concert for New York benefit.
Neither Rattner nor Dolan returned calls seeking comment for this report.
Most insiders believe that Harvey Weinstein's larger-than-life reputation and proven track record would make raising money relatively easy, despite the reluctance of foreign distributors to invest in output deals.
"In the old days, foreign distributors would say, 'I'll enter into an output agreement with you for your slate' -- and they found most of the stuff they were getting was garbage," says banker John Miller, managing director at J.P. Morgan Securities. "Now they are saying, 'Even if I have to pay more for it, I want to see it before I buy it.' It is very difficult today to enter into output arrangements, but if anybody could do it, it would be Harvey.
"If this ever goes ahead, he is probably only going to need a couple of hundred-million dollars of equity, and then he can leverage that up to $750 million depending on the distribution deals he would be able to make," Miller adds. "It is going to be a little easier for him because he has such a good track record."
Whatever Harvey and Bob Weinstein choose to do, few observers doubt their ability to do it.
Despite their current kingpin status, the Weinsteins' beginnings were humble. Born in 1952 and 1954, respectively, Harvey and Bob began their entertainment careers as rock promoters, a background some observers consider pivotal to their future modus operandi within the movie industry. Their tastes were different -- in terms of cinema, Harvey had developed a love for Francois Truffaut, Federico Fellini and Luchino Visconti, while Bob favored more-commercial material -- but the brothers worked brilliantly together.
They also noted audiences' tastes for more-erotic art house fare, seeing, as Bob Weinstein has put it, that there was "a packed audience of art lovers who never would have set foot in a movie with subtitles but for the fact there was a little something extra added."
By the late 1970s, the Weinsteins had obtained a theater in Buffalo, N.Y., and screened movies when not using the venue for concerts. They then moved into distribution, releasing such fare as 1982's "The Secret Policeman's Other Ball," 1983's "Erendira" and the 1988 U.S. release "Pelle the Conqueror," which won an Oscar for foreign-language film. They even wrote and directed the small 1986 feature "Playing for Keeps."
"It was a making-a-living business then," Bob Weinstein has said.
Miramax operated in the same universe as other indie distributors during its first decade, investing in individual domestic projects -- often using elements of sex or titillation to sell them -- but also backing foreign releases of considerable artistic merit.
Things began to change, though, during the late 1980s. Armed with backing and a credit line from the United Kingdom's Midland Montagu bank, Miramax invested in three pictures that would help it become the premier American outlet for quality films: Errol Morris' 1988 documentary "The Thin Blue Line," Jim Sheridan's 1989 directorial debut "My Left Foot" and Michael Caton-Jones' 1989 British political drama "Scandal."
A fourth picture Miramax purchased at the 1989 Sundance Film Festival then would launch the company into a different league and usher in a new era for indie film.
The Weinsteins outbid all rivals for rights to "sex, lies, and videotape," a $1.2 million-budgeted drama filmed in Baton Rouge, La., that director Steven Soderbergh had gotten off the ground in part by convincing backers that there would be nudity -- nudity he proceeded not to shoot.
The Weinsteins took "sex" to that year's Festival de Cannes, where it beat Spike Lee's "Do the Right Thing" to win the Palme d'Or. Better still, the brothers marketed the film with a studio-style campaign that emphasized TV spots as well as the usual indie newspaper ads. "Sex" went on to gross early $25 million at the domestic boxoffice, an unheard-of figure for an indie film at the time.
During the next decade, Miramax grew into a pioneering force, investing in some of the most interesting pictures of the 1990s and sometimes gobbling up acquisitions faster than it could release them.
"Historically, Miramax did three things," says Peter Biskind, author of "Down and Dirty Pictures: Miramax, Sundance and the Rise of Independent Film." "First of all, they successfully applied studio marketing techniques to independent films; secondly, they courted controversy and exploited controversy to build audiences; thirdly, they were extremely aggressive -- Miramax aggressively went after movies and paid more money than anyone (else) was willing to pay for them."
Miramax thus changed the nature of the indie business, making it enormously more competitive, inflating acquisition prices and nearly single-handedly creating a crossover market for films that were neither classically independent nor mainstream releases.
"Miramax started spending money right off the bat," Biskind says. "They started making TV buys and radio buys and turned indie marketing on its head, but without sacrificing the traditional indie guerrilla marketing."
In the long run, that approach helped indie films reach a wider mainstream audience while forcing rival studios to compete on Miramax's terms -- even if minuscule-budgeted features and regional films no longer could find a niche amid an increasingly competitive marketplace.
"They were smart to be the first ones to push the envelope," says Paramount Classics co-president David Dinerstein, who ran Miramax's marketing operations during the late 1980s and early '90s. "Perhaps one can point a finger at Miramax for causing small films to fall through the cracks, but at the same time, films like (Roadside Attractions' hit documentary release) 'Super Size Me' would never have done so well if (the Weinsteins) hadn't opened up the market for those movies to succeed. They were bold and innovative and not afraid to break the rules -- that's what made them as good as they were."
iramax's skills have never been put to greater effect than on "Pulp Fiction," which earned $107.9 million domestically and in some ways has become the quintessential Miramax film: risky, daring, controversial and beautifully made and marketed.
Miramax took up the $8 million-budgeted project when TriStar put it into turnaround.
"Harvey and Bob read it and they just loved it -- they were like animals," Bender says. "We were negotiating with a few other people, but these guys wouldn't take no for an answer, and they had a passion for it from the beginning."
The Weinsteins left Tarantino to make the film he wanted then joined him to create a marketing campaign that centered on a poster conceived by the writer-director.
"The poster is a concept that Quentin wanted to do like an old paperback novel," Bender says. "Miramax then took (the concept) and ran with it, and we had this amazing poster with (the film's) Uma Thurman on it."
By the time "Fiction" became a phenomenon, Miramax had entered a new stage in its existence. The Weinsteins were experiencing a cash-flow problem in 1993 when they closed the groundbreaking deal with Disney that would make Miramax a studio subsidiary and allow it to spend infinitely more on films than had any indie studio before.
After months of negotiations, Disney bought Miramax for as much as $70 million.
"It was a very good deal for Disney because today, the company is clearly worth over $1 billion -- and maybe as much as $2 billion," a former Disney executive says.
What followed was a golden age for Miramax, which acquired and produced such movies as 1993's "The Piano," 1996's "Sling Blade," 1997's "Good Will Hunting," 2001's "In the Bedroom" and best picture Oscar winners "The English Patient" (1996), "Shakespeare in Love" (1998) and "Chicago" (2002), the latter of which is the company's highest-grossing film to date with a $170.7 million domestic take.
But even those stories are not without that trademark Miramax controversy. "Patient" earned $78.7 million at the domestic boxoffice, but producer Saul Zaentz claims that he still has not seen a profit from the film and might sue to obtain further monies from Miramax.
While Miramax was moving ahead with Oscar fare like "Patient," it also was developing more obviously commercial material through Dimension, which has provided the company with some of its greatest financial successes, from "Scream" to "Scary Movie" to Robert Rodriguez's "Spy Kids" franchise. Hiltzik categorically denies rumors that Dimension's success has fueled tension between the Weinsteins.
"Bob and Harvey are brothers, friends and partners," he says. "They have always been a team and will continue to be united, no matter what anyone tells you."
Whether they will remain united as Miramax co-chairmen is the great unknown. Bob Weinstein toils in private while Harvey has become a public personality, a fixture on the gossip pages and a major power broker within Democratic Party circles. Their combination, though, has made the brothers unique in the annals of movie history.
"They've had a tremendous impact on the film business," film critic/historian Leonard Maltin says. "They've acquired U.S. rights to a number of films that might have languished without them. When they got behind a movie, they were indefatigable -- one might even say relentless. Other people might have distributed some of the films they did, but none of them would have done it in the high order that Miramax did. They've done a lot of good for moviemakers and moviegoers in this country. "