Disney Spurns Weinsteins in $660 Million Miramax Sale

Disney Demands $40 Million Nonrefundable Deposit on Miramax Sale
Disney Demands $40 Million Nonrefundable Deposit on Miramax Sale

Walt Disney (DIS) will sell Miramax to Southern California construction CEO Ron Tutor and his consortium of buyers for $660 million. The sale ends weeks of speculation over the fate the movie studio.

Former Miramax founders Bob and Harvey Weinstein, who apparently weren't willing to budge from their paltry $565 million offer, according to a Reuters report, are out, as expected.

The Tutor Team Under Pressure

Tutor's group is reportedly getting help from private equity firm Colony Capital. In addition, actor Rob Lowe is reportedly offering up creative assistance in the way of developing movies, plays and books, while producer David Bergstein has offered to weigh in as a deal adviser, according to a report in the Wall Street Journal.

Tutor could not be immediately reached for comment. But in a previous interview, the construction CEO told DailyFinance that he was frustrated when he had initially started talks with Disney and thought life was good until the Mouse suddenly turned around and entered into exclusive talks with the Weinstein brothers. It has yet to be seen if his second go around with Mickey & Co. will yield a deal.

If the Tutor group doesn't pony up the deposit by Wednesday, Miramax and its collection of such notable movies as Pulp Fiction, Clerks and Shakespeare in Love could be up for grabs again.

A Financial Leg Up for the Weinstein Brothers

Over the weekend, Fortress Investment Group reiterated its commitment to provide debt financing to the Weinstein brothers and financier Ron Burkle should they get another stab at the Miramax deal. Fortress also denied a media report that the investment firm had a falling out with the Miramax suitors.

"The New York Post's report that Bob and Harvey Weinstein and Ron Burkle have lost the financial backing of Fortress Investment Group is patently false," it said in a statement. "Fortress remains committed to providing financial support for the Weinsteins' and Mr. Burkle's bid for Miramax. Our relationship with the Weinsteins and Mr. Burkle, also contrary to yesterday's report, remains strong and constructive, and the group has ample financial backing to successfully pursue an acquisition of Miramax."

A spokesman for Fortress declined to say whether that support would top or come within spitting range of the Tutor-Colony offer. A spokesman for Burkle did not immediately return phone calls. The Weinsteins could not be immediately reached either.

The Miramax Movie

The history behind Miramax studio could be a movie itself. The brothers founded the artsy studio back in 1979, naming it after their parents - Miriam and Max. In 1993, the brothers sold the studio to Disney, but continued to work for the film company. Since its founding, Miramax racked up four Best Picture Academy Awards.

According to people familiar with the love-hate relationship between the Weinsteins and Disney, one source told DailyFinance that the brothers produced great artistic work but didn't know how to run a business. As a result, tension between the brothers and Disney often erupted into shouting matches.

So it was no surprise when the brothers left Disney in 2005 to start The Weinstein Co. And with them they took the rights to develop sequels from some of their major movies, a source noted.

Disney, in the meantime, struggled to make the studio a thriving financial operation and in January closed its doors in New York and Los Angeles.

This story was updated at 2:30 July 27, 2010.