After struggling financially for months, and losing plenty of buyers along the way, the Weinstein Company is finally close to closing a deal, but that's not exactly good news for the company. The sale is set for far less than was hoped for and won't even come close to covering the company's debt.
The Weinstein Company received 20 offers before their December 22 deadline and then went on to whittle down their list of prospective buyers to only six. The highest bid is just under $5oo million, which will only absorb about half the Weinstein Company's current debt. The company has been careful to point out that they will receive no profit from the sale, especially due to Harvey Weinstein's legal battles.
News of the story first broke on Twitter, where reporter Josh Jamerson hinted at the scoop before it was officially published in the Wall Street Journal. The official report lists Lionsgate, Maria Contreras-Sweet, and Killer Content in conjunction with Abigail Disney as prospective buyers. Sony, Viacom, and MGM had considered putting in bids at one point but failed to make it to the final rounds of consideration.
Some bidders are interested in the company as a whole, Contreras-Sweet's group promised to retain the majority of the original staff of 157 employees. But most of the offers seem to geared toward specific aspects of the company, such as its television production company and independent film library.
It may be beneficial for the Weinstein Company to consider multiple deals to maximize the bottom line given the bleak options put before them. They could sell off the various aspects of their company to the highest or most beneficial bidders. Paddington 2 was sold to Warner Bros. for $15 million in November, buying the company a little time as they worked through the sale. This could provide an incentive to sell off their remaining properties piece by piece.
Of course, continued revenue may be the safest way to dig their way out of debt in the long run. Taking a decrease in the sale amount now may be wise if it ensures the company remains intact, allowing them to recoup their losses slowly over time. There are multiple films waiting to be released after the company's ownership has been determined, including Current War and The War With Grandpa, which may be able to help the company pay down debt and get back on track.
Source: Wall Street Journal