Media Money with Julia Boorstin

Miramax on the Block

Disney CEO Bob Iger made it clear after the company's earnings reportlast week that the company is interested in selling its Miramax division. It was no secret on the company's earnings call. When I sat down with Iger in an exclusive interview he said that the library of art house films and Oscar winners doesn't fit with the Disney brand. Those bids are now coming in; a source close to the deal tells me some bidders are expecting a response as soon as next week. Disney's not saying anything, but since there's no reason for them to be a rush, I'd expect them to hold off until the price is right.

How much is Miramax worth? $700 million is a healthy value for the label and library and it seems like Disney would certainly sell for somewhere in that ballpark. The library's annual cash flow from DVDs and TV rights is reportedly around $150 million. The name itself is also worth something.

Lionsgate has made it clear it's interested in the property. (See my blogon Carl Icahn pushing to buy stock and restrict Lionsgate's purchase of Miramax or MGM). If I were to bet, I'd place my money on Lionsgate. Sources tell me that Time Warner is the lead bidder for MGM, so if Lionsgate isn't going to get that library, this one becomes even more appealing.

Harvey and Bob Weinstein, who sold Miramax to Disney in 1993 and then left in 2005, are back in the game. Despite the fact that their new venture, The Weinstein Company, is notoriously short on cash, they seem to have secured the backing of two investment funds to help finance the purchase of part or all of Miramax. Having named the company after their parents, there's talk that they'd just buy back the right to the name.

Other potential buyers include Ryan Kavanaugh's Relativity Media, which is backed by hedge fund Elliot and Summit, riding high on the success of "Twilight." High net worth individuals and private equity funds interested in the cash flow could also be in the mix.

Here's what Iger said last week when I asked him about selling Miramax.

"Well, our primary interest is in deriving value from all of our assets. We have essentially stopped fueling new development at Miramax. And spending on new motion pictures. We'll spend to finish those we’ve committed to and we’ll release those that have been made in a manner that’s appropriate to each film. At the same time, we're exploring our options, and really focusing more at the studio on a strategy that has us releasing Disney, Disney Pixar-- and Marvel movies primarily."

My interpretation: if they can "derive value" from Miramax with a healthy price tag, they'll do it. If bids are too low, they'll wait.

Questions?  Comments?