Weinstein Co. strikes deal with the Film Department

The Weinstein Co. has struck a deal for all international rights with the Film Department, the production company founded by Mark Gill and Neil Sacker.

The two-year deal will commence with "Law Abiding Citizen," the Jamie Foxx - Gerard Butler thriller that opened this month. Other Film Department movies that will be part of the deal include Kate Hudson's "Earthbound." The deal comes on the eve of AFM, which starts next week in Santa Monica and is where movies are sold for international distribution. 

"It's a very smart strategic partnership for us," said David Glasser, president of Weinstein Co.'s international operations. "These are the kind of decisions you make to grow the company forward. It's a perfect fit with our slate." The Weinstein Co. expects to get foreign rights to at least four pictures a year from the Film Department.

Gill and Sacker have long ties to Weinstein brothers Bob and Harvey Weinstein. Gill is a former president of Miramax/Los Angeles, which was founded by the Weinsteins, and Sacker used to head business affairs there. Gill went on to become president of Warner Independent Pictures.

-- Joe Flint

Weinstein Co. selling controlling stake in exclusive social networking site

Looks like it's not a small world after all for the Weinstein Co.

The film and entertainment company, which has been shedding staff in the wake of restructuring its operations, is selling its majority stake in aSmallWorld.net -- a social networking site for rich people -- to Swiss mogul Patrick Liotard-Vogt, people familiar with the situation say. The Weinstein Co., which bought into the site three years ago, will retain a small piece of the company. Liotard-Vogt is a scion of the family that founded Nestle Corp. The exclusive site, founded by Erik Wachtmeister, is an invitation-only social network. Terms of the deal were not disclosed.

The move is part of the Weinstein Co.'s push to get back to basics. Earlier this summer, the company hired financial consulting Miller Buckfire to advise it as it dealt with a heavy debt load.The word from the firm was to lose the diversions and noncore businesses and stick to making a handful of movies. 

There have also been lots of cutbacks at the company. Last week, chief operating officer Lee Solomon left, and before that U.S. distribution chief Tom Ortenberg also left for personal reasons. There are no plans to replace either of them. The company's goal is to pare the staff to fewer than 100 people. After founders Harvey and Bob Weinstein, the top executive is David Glasser, president of international distribution.

The company has had some recent success with "Inglourious Basterds" and has two highly anticipated  releases in  "The Road" and "Nine," the latter of which just had its release date moved from late November to late December.

-- Joe Flint

Photo: Harvey Weinstein. Credit: Andrew H. Walker/Getty Images

Inside the battle for 'Precious'

Last week, we briefly reported on the legal blow dealt to Harvey Weinstein's efforts to distribute "Precious, Based on the Novel ‘Push’ by Sapphire," the darling of the Sundance Film Festival that follows the brutal life of a young Harlem girl. The back story of this battle between Lions Gate and Weinstein Co. provides a snapshot into the sale of movies and just how hungry the struggling Weinstein Co. was for this property.

In January, Lionsgate Films announced it had acquired director Lee Daniels' harrowing account of a young black woman's personal life. Weinstein Co. alleged that independent film sales agent John Sloss actually sold "Precious" to Weinstein Co. first, then dealt it to Lionsgate when it offered a better deal.

On Feb. 4, two days after Lionsgate announced that it had acquired the film, Lionsgate and Weinstein Co. sued each other to determine who controlled the movie.

Weinstein Co.'s legal challenge suffered a major setback Friday, when U.S. District Judge Naomi Reice Buchwald dismissed one of the four lawsuits that arose from the dispute. In her ruling in a New York case brought by Weinstein Co. against the film's producers, Smokewood Entertainment Group, Buchwald said that Weinstein Co. never had a written contract to distribute the film, an essential ingredient when a copyright is transferred to another party. For Weinstein Co., it was part of a double dose of bad news to end the week: production head Tom Ortenberg, who joined the firm in January, said he was leaving the struggling studio.

"A signed writing is required to effectuate a transfer of copyright ownership," Buchwald wrote. "To the extent that [Weinstein Co.] alleges a purely oral agreement for the exclusive licensing and distribution rights to 'Push,' that claim clearly fails as a matter of law."

Theatrical chief Tom Ortenberg is leaving Weinstein Co.

In the latest shake-up at the struggling Weinstein Co., theatrical chief Tom Ortenberg is leaving the production company.

Ortenberg, whose official title was president of theatrical films, spent just nine months at the company, which has struggled under a heavy debt load of more than $500 million and constant speculation that its future is in doubt.

In a statement, Ortenberg said he "asked for and was granted a release from my contract with the Weinstein Co. for personal reasons." His last day will be at the end of the month and he said he would son release an announcement on his future plans.

When he joined Weinstein Co. last January, Ortenberg told Company Town that it was an "opportune time" to come aboard. Prior to joining the studio, he spent 12 years at Lionsgate, most recently as president of theatrical films.

This will probably be a Friday to forget for the Weinstein Co. Not only is their president of theatrical films leaving, but the company's breach-of-contract lawsuit against the highly anticipated movie "Precious" was dismissed by a federal judge this afternoon. Weinstein Co. claimed it had distribution rights for the movie. For more on that, see John Horn's post in our sister blog The Big Picture.

On the plus side, we reported earlier that the company did sell "Inglourious Basterds" to TNT in a deal that could bring in as much as $15 million.

-- Joe Flint

Photo: Tom Ortenberg. Credit: Lionsgate

TNT buys rights to 'Inglourious Basterds'; Weinstein Co. still struggling

Some good news for the beleaguered Weinstein Co. as it has sold the rights to "Inglourious Basterds" to Time Warner's basic cable network TNT.

Though terms were not disclosed, typically these deals are based on a percentage of the box office with a cap, which means that a movie that makes $250 million at the box office could go for the same that a movie that pulls in $150 million does. The most TNT is likely to have paid for "Inglourious Basterds" is around $15 million. So far, "Inglourious Basterds" has taken in more than $110 million in U.S. box office, making it director Quentin Tarantino's biggest hit.

Showtime already has the pay TV rights to "Inglourious Basterds" and future Weinstein Co. releases. However, that deal was unique in that Weinstein Co. paid Showtime an advance of $35 million as part of the deal. For more on that arrangement and how it came to pass, see our story. 

Though the TNT money will come in handy, it is not nearly enough to dig the Weinstein Co. out of the hole it is in. Earlier this year, it hired financial firm Miller Buckfire to figure out how the company could restructure its heavy debt load of more than $500 million. Since then, the company has been laying off staffers, has said it will cutback dramatically on the number of movies it makes and acquires and has started getting out of its nonmovie businesses.

Today's Wall Street Journal was the latest to chronicle the challenges facing Bob and Harvey Weinstein after stories in the New York Times and Los Angeles Times. WSJ dug up a nice little gem that the Weinsteins did not pay back a $75-million bridge loan from Ziff Brothers Investments and that Dirk Ziff, resigned from the Weinstein board earlier this year.

The company has two big movies coming out later this year, the musical "Nine" and "The Road," the latter of which had been billed as its best shot at Oscar gold.

-- Joe Flint

Photo: "Inglourious Basterds." Credit: Francois Duhamel / Associated Press/Weinstein Co.

'Halloween 3D' coming in summer 2010

"Halloween II" may not have won the box office this weekend, but Weinstein Co. is taking a lesson from the movie that did as it prepares a sequel for next summer.

The independent studio's co-Chairman Bob Weinstein said today that the 3-D sequel, titled, appropriately enough, "Halloween 3D," is in development.

The investment it takes to shoot movies in digital 3-D has proved particularly lucrative for horror films. For "The Final Destination," this weekend's No. 1 movie, theaters with at least one 3-D screen earned 3.25 times as much as those that showed the movie in 2-D only, according to distributor Warner Bros. That's substantially higher than for other recent releases. The equivalent 3-D multiple for last month's "G-Force," for instance, was only 1.7 on its first weekend. For July's "Ice Age: Dawn of the Dinosaurs" it was 1.4 andm for June's "Up" it was 2.2. January horror flick "My Bloody Valentine" earned 6.4 times as much from 3-D theaters as it did from 2-D on its opening weekend.

Weinstein said Rob Zombie, who directed "Halloween II" and 2007's reboot of the 31-year-old horror series, won't return for "Halloween 3-D." He said the studio is in negotiations with a new director, whom he declined to name, who has experience in horror and has a "different take" on the franchise.

-- Ben Fritz

Photo: Tyler Mane in "Halloween II." Credit: Marsha LaMarca / Weinstein Co.

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.

Weinstein credits women for $65-million worldwide opening of 'Inglourious Basterds'

Women, it turns out, were the surprising key for "Basterds" this weekend.

While an audience that's 58% male would seem lopsided for many pictures, Weinstein Co. Co-Chairman Harvey Weinstein said it was much better than he had expected and one of the main reasons "Inglourious Basterds" opened to a very strong studio-estimated $37.6 million in the U.S. and Canada this weekend.

"Research showed that guys loved this movie but said women would not," he said in an interview this morning. "That was the Everest we had to climb."

The weekend's other three new movies, meanwhile, all showed little to no life at the box office.

Weinstein Co.'s aggressive efforts in the past week, after "The Time Traveler's Wife" opened, to draw women to "Inglourious Basterds" included ads in women's magazines, on websites and on television shows including "Battle of the Network Stars" and the Weinstein Co.-produced "Project Runway," which had its season premiere Thursday on Lifetime.

Add in $27.5 million from the 22 foreign territories where Universal Pictures opened the film and "Inglourious Basterds" grossed $65.1 million around the world. That's good news for the Weinstein Co., as it struggles to regain its financial footing, and Universal, which has had a very tough summer at the box office. The two studios split the film's budget of about $70 million and will evenly divide its revenue. Typically, studios receive about half of a movie's box-office receipts.

Domestically, "Basterds" was the biggest opening ever for director Quentin Tarantino. Overseas, the movie was No. 1 in most countries where it launched, including Germany, Great Britain, France and Australia.

Late August and early September are typically slow at the box office, but "Inglourious Basterds" appears to be coming out of its opening weekend with good buzz. Audiences gave the movie an average grade of A-, according to market research firm CinemaScore, and ticket sales dropped a relatively modest 10% from Friday to Saturday.

That means "Basterds" could play well for a few weeks and quite possibly top $100 million domestically. Next weekend, it runs into another Weinstein Co. release, "Halloween II." Harvey Weinstein said, starting on Monday, he'll be marketing the Tarantino film as "the must-see movie for an adult audience,"  which should differentiate it from the young crowd expected for "Halloween" and Warner Bros.' "The Final Destination," both of which open on Friday.

"District 9" dropped a decent 49% on its second weekend even though "Basterds" drew much of its core audience. The Sony-distributed science-fiction film, which cost only $30 million to produce, has earned a total of $73.5 million domestically thus far.

Warner Bros.' romantic drama "The Time Traveler's Wife" dropped 46% to $10 million on its second weekend, a less encouraging number since it opened to a not-as-impressive $18.6 million last weekend.

The low-budget Robert Rodriguez-directed family film "Shorts" performed decently, opening to $6.6 million. Warner Bros. distributed the film for financiers Media Rights Capital and Imagenation Abu Dhabi.

Fox's "Post Grad," a leftover picture from defunct youth division Fox Atomic, earned a very weak $2.8 million.

Disney's documentary "X-Games 3D" proved a total bust, earning only $800,000 despite playing exclusively in 3-D theaters, which carry ticket-price surcharges.

Here are the top 10 films at the domestic box office, according to studio estimates and Hollywood.com:

First look: 'Basterds' opens to a glorious $37.6 million

"Inglourious Basterds" has given the Weinstein Co. a much-needed jolt, opening to a very strong studio-estimated $37.6 million at the domestic box office.

That's far and away the biggest opening for director Quentin Tarantino, as well as the highest first-weekend gross for a movie in the typically slow second half of August, exceeding the $33.1 million made by 2007's "Superbad," even accounting for ticket-price inflation.

In particularly good news for the movie's backers, the decline in ticket sales from Friday to Saturday was 10%. That's a relatively modest drop for an action movie whose director has a devoted fan base that turns out opening day and is a sign that word of mouth is solid despite some graphic violence and mixed reviews.

The movie also started off well overseas, where it was distributed by Universal, selling a studio-estimated $27.5 million worth of tickets in 22 territories.

Weinstein Co. and Universal split the movie's production budget of about $70 million and will evenly divide the movie's box-office revenue, typically about half of ticket sales. Both studios are very much in need of a hit -- Universal after a summer with several box office busts and Weinstein Co. as it struggles to regain stable financial footing.

"District 9" managed a decent hold despite "Basterds" taking much of the box-office oxygen among action fans. It declined 49% from its big opening to $18.9 million, according to distributor Sony Pictures. That brings total domestic ticket sales for the Peter Jackson-produced science fiction movie, which cost only $30 million to produce, to $73.5 million.

Warner Bros.' romantic drama "The Time Traveler's Wife" dropped 46% to $10 million on its second weekend, a less encouraging number since it opened to a so-so $18.6 million and there were no new directly competing movies at theaters.

Of the weekend's other three new movies in wide release, only the Robert Rodriguez-directed family film "Shorts" avoided disaster, grossing $6.6 million. Warner Bros. distributed the film for financiers Media Rights Capital and Imagenation Abu Dhabi.

Fox's "Post Grad," a leftover film from defunct youth division Fox Atomic, earned a very weak $2.8 million.

Disney's documentary "X-Games 3D" proved a total bust, earning only $800,000 despite playing exclusively in 3-D theaters, which carry ticket-price surcharges.

-- Ben Fritz

Photo: Denis Menochet, left,  and Christoph Waltz in "Inglourious Basterds." Credit: Francois Duhamel / the Weinstein Co.

Lifetime hopes to get fierce with 'Project Runway'

Almost 16 months after Lifetime Television struck a deal to snag the fashion reality hit "Project Runway" from Bravo the show will finally debut in its new home tonight.

A lot is riding on this for Lifetime, which needs "Project Runway" and its stars Tim Gunn and Heidi Klum to bring in a big young audience for its investment to pay off. According to Nielsen Media Research, Lifetime's prime-time audience has fallen in the last six years from an average of 1.7 million viewers in 2004 to 1.2 million this year, a drop of almost 30%. Among women ages 18 to 49 during the same period, the drop is 33% and for women ages 25 to 54 Lifetime is down 37%. While the network has had some recent successes with "Drop Dead Diva" and the drama "Army Wives," its median age is still hovering around 50.

So can one show heading into its sixth season turn everything around? Probably not, but it's a start. During its last two seasons on Bravo, "Project Runway" has drawn more viewers than Lifetime's prime-time averageof the last few years. Its season five premiere took in almost 3 million people. No wonder NBC and Bravo were willing to put up such a huge fight to try to keep the show from moving.

Besides heavy promotion for the return of "Project Runway," Lifetime is also making it available online, something Bravo was unable to do in its deal. PaidContent's Staci D. Kramer broke news today that full episodes will be available at MyLifetime.com on the Saturday following the Thursday episode. It's the only place online to find the show, Kramer notes, since Lifetime isn't making it available on iTunes or other sites and outlets.

The cash-strapped Weinstein Co., which ended up paying millions to NBC in order to take it to Lifetime, also has some risks in the move. "Project Runway" used to be made by a production company called Magical Elves. But since Magical Elves does other shows with NBC and Bravo, the show is now produced by reality kings Bunim/Murray ("The Real World"), a company that's known to be quite expensive.

While the dog days of August may seem like an odd time to premiere such a big bet, Lifetime was obliged to launch "Project Runway" now as part of the settlement with NBC, people familiar with the matter said. That may turn out to be a blessing in disguise. After all, the competition is a little lighter and fewer people are taking vacations this summer because of the weak economy. Last week, AMC's "Mad Men" had record ratings in its season three premiere. 

Ironically, after all the fighting between NBC and Lifetime and Weinstein Co. over "Project Runway," the Peacock network may end up still profiting from the program. It's in talks with Lifetime's parents about merging some of their cable networks (which also includes A&E) into one entity.

-- Joe Flint

Photo: "Project Runway" stars Tim Gunn and Heidi Klum. Credit: Mike Yarish / Lifetime Networks