Peter Bart: A Disney Deal Gone Wrong: How Mouse Money Fueled Harvey Weinstein’s Alleged Predation As Miramax Mogul

Peter Bart

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The Disney empire has soared in value thanks to its inspired acquisitions, but some Disney veterans still cringe in recalling their company’s most troubling takeover: Miramax.

In empowering Harvey Weinstein with Disney money and muscle, the rulers of the Magic Kingdom in 1993 transformed a struggling indie distributor into an all-consuming producer-predator whose ultimate self-destruction is about to play out in the courtroom.

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At a time when mega mergers involving Viacom and AT&T are taking center stage, the Miramax deal seems at once paltry, yet historically noteworthy. The acquisition involved $60 million, plus assumption of more than $40 million in debt.

The Harvey Weinstein of 1993 was broke and also desperate to find distribution for two obscure pickups — a sexually ambiguous film set in Northern Ireland, and a comedy made on a dime by a young, first-time filmmaker. While ill-kempt and fiercely aggressive, Weinstein was also shrewdly deferential. He always said “thank you” and opened doors for women.

Within months of closing the deal, Disney executives began to realize what they had created. Weinstein was committing hundreds of millions in Disney money, spending more than the studio itself, and the executives who supposedly were supervising him no longer had jobs.

Weinstein’s energies are now being focused on keeping out of jail. He, too, must wonder what his life would have been like had he never been anointed as Disney’s superstar showman.

None of the then-Disney executives want to discuss the inception of the “deal gone wrong.” I don’t blame them. At that moment in time, Disney was thriving (though hungry for award recognition) and Weinstein was ablaze with extraordinary dreams. Over time some were realized, making many people rich and famous. But along with triumph came personal disaster, for both himself and those whose lives he crossed.

So the inevitable question: Did Disney executives know about Weinstein’s predatory transgressions? Having confronted them over the years, I am persuaded they did not. Nor did I. Like other pathological criminals, Weinstein built a protective wall around his sordid personal life, especially during the troubled Disney years. That wall has now been dismantled. A trial is looming; a book chronicling his crimes, real and alleged (She Said), is on bestseller lists.

To the industry, Disney circa 1993 seemed steeped in energy, rolling out hits, poised to become the first studio grossing $1 billion in a season. Its ruling triad of Michael Eisner, Frank Wells and Jeffrey Katzenberg presented a front of unity. All gave their assent to signing Harvey and Bob Weinstein’s ambitious entity, Miramax, which was releasing The Crying Game and sex, lies and videotape. Miramax offered big plans and modest budgets. And the Weinstein brothers claimed to understand the Disney discipline.

That discipline was instantly fragmented with the tragic death of Wells in a helicopter crash. Wells was Disney’s courtly elder statesman; upon his death, Katzenberg let it be known that he had earned the right to be his successor, but Eisner and the board of directors vetoed that idea. Katzenberg promptly quit, threatening litigation (he ultimately won).

Disney’s vaunted stability now seemed to spin out of control. Eisner’s health had deteriorated, leading to the impromptu hiring of Michael Ovitz as his successor – an idea that soon crashed and burned. Miramax, meanwhile, was bustling. The horror slate of Scary Movie and Scream 3 was a box office hit. Promising films like Shakespeare in Love and Good Will Hunting were in preparation. And Harvey had big dreams: Leonardo DiCaprio and Daniel Day-Lewis would co-star in Gangs of New York. There would be a movie version of Chicago and a two-film blockbuster based on Lord of the Rings plus a Broadway play based on The Producers. Hollywood sensed these were not just projects — they were brilliantly extravagant displays of showmanship.

But, again, who at Disney was supervising Miramax? Given the turmoil at the top, a succession of studio executives – Bill Mechanic, Dick Cook, Joe Roth, Peter Murphy — discovered this was an untenable assignment. The start dates were multiplying, budgets were rising (Gangs far
surpassed $100 million). At the same time the Oscar nominations were rolling in (as many as 40 a year).

Eisner’s health soon improved enough to allow his return as CEO, and he plunged deeply into new Miramax wars. He quickly renounced the $180 million commitment to two Lord of the Rings movies, defying Weinstein’s frenzy (New Line soon stepped in). He also challenged Weinstein’s advocacy of Fahrenheit 9/11, and was ultimately daunted by the doc’s giant success, grossing $220 million.

The final decision was inevitable: Miramax must go and Harvey banished. The Weinstein Company instantly became its successor company. And with Bob Iger poised in the wings, Disney’s expansion strategy would soon take on a dramatically different course.

Miramax remains “the deal gone wrong” in the proud annals of Disney. And Harvey Weinstein’s dealmaking destiny now must play out in an even more unfriendly arena.

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