Weinstein Co.'s 'Inglourious Basterds' TV deal is financial boost -- for Showtime
Now that "Inglourious Basterds" has taken in an impressive $38.1 million in its opening weekend and looks like it's going to be a huge hit, the Weinstein Co. should be poised to collect a nice check from CBS Corp.'s pay channel Showtime, which has an agreement to distribute the production company's movies to its subscribers.
But that may not turn out to be the case. When the deal with Showtime was struck last year, speculation was that the Weinstein Co. paid Showtime an advance sum to carry its movies on the network. Usually, networks pay studios for movies, so this change made some news. Weinsten Co.'s Harvey Weinstein dismissed that notion in the Hollywood Reporter in July 2008 as "rumor and innuendo" while Showtime CEO Matt Blank said "fully loaded, the deal will cost us half of what we were paying historically for films."
Company Town tried to get to the bottom of the mystery, and this is what we found out about how Weinstein's seven-year, 95-movie deal with Showtime was structured. According to people familiar with the pact, the Weinstein Co. paid CBS' Showtime an advance of $35 million because at the time there was mounting speculation that Weinstein Co. was financially strapped and might not be able to deliver the movies. Showtime didn't want to clear a bunch of space on its schedule for product that wouldn't be showing up and saw the payment as a hedge. Showtime also negotiated better terms to determine what it would pay for movies that cut its costs by almost 40%, people close to both companies acknowledged.
A Weinstein spokesman said "the idea that the Weinstein Co. paid out money for this deal with Showtime is an urban legend." The spokesman added that Showtime is "paying a substantial amount of money for the films and over the course of the entire deal it could be worth as much as $600 million to $700 million to the Weinstein Co." A spokesman for CBS and Showtime declined to comment on the matter.
Could Showtime ultimately end up paying a lot of money for movies from the Weinstein Co.? Sure, if the production company makes all those movies and a bunch of them are hits. Of course, the company also recently disclosed that it is cutting its production output to eight movies a year and a handful of acquisitions. That means hitting 95 films in seven years may be a challenge. Also, Weinstein's track record is not one of huge box-office smashes, "Inglourious Basterds" aside.So how much money is there in a pay-TV deal for "Inglourious Basterds"? These deals are fairly complex. Simply put, the bigger the hit, the bigger the pay-TV money. However, there are usually caps to protect the network, meaning that a movie that makes $500 million might end up costing the pay-TV channel the same as a movie that makes $100 million. Even if "Inglourious Basterds" ends up being a huge hit, the pay-TV take typically would be from $10 million to $12 million and since Showtime has a sweetheart deal, the value will be much less and simply will be deducted from the advance paid by the Weinstein Co.
In other words, Showtime's getting a freebie.
-- Joe Flint
Picture: "Inglourious Basterds" star Brad Pitt. Credit: Francois Duhamel / the Weinstein Co.