Weinstein Company Bidding: Maria Contreras-Sweet Group...

[The Ultimate Nullifier]

variety.com/2018/film/news/weinstein-company-bidding-maria-contreras-sweet-group-emerges-as-leading-suitor-1202655876/#utm_medium=social&utm_source=email&utm_campaign=social_bar&utm_content=bottom&utm_id=1202655876

Weinstein Company Bidding: Maria Contreras-Sweet Group Emerges as Leading Suitor

A group of investors led by Maria Contreras-Sweet, the former head of the U.S. Small Business Administration, is in a strong position to buy the Weinstein Company, according to insiders.

The indie studio is on life support in the wake of a massive sexual harassment and assault scandal involving its founder, Harvey Weinstein. He has been accused of sexual misconduct by dozens of women, with allegations going back decades. Weinstein denies the claims and says all sexual contact was consensual.

Contreras-Sweet lacks entertainment industry experience, but she intends to keep much of the Weinstein Company’s staff employed to run the studio. Bob Weinstein, Harvey Weinstein’s brother, would leave the studio if Contreras-Sweet is successful. The bid would likely include a possible $30 million cash infusion and the assumption of hundreds of millions of dollars in debt.

Other bidders include Killer Content, the producer of “Carol” and “Still Alice”; Lionsgate, the studio behind “The Hunger Games”; Shamrock Capital, and Vine Capital. Some want to buy the company in its entirety, others just want certain assets.

There is speculation that Ron Burkle’s Yucaipa Enterprises is a minority partner in Contreras-Sweet’s bid, but a spokesperson for the billionaire investor downplayed those reports.

“I can confirm Yucaipa does not have a deal in place with Maria Contreras-Sweet,” the spokesperson said. “We know she is raising funds, but we have not been a part of her fundraising. One thing is for certain, we share her belief that a women-led board is the only possible way the company survives at this point.”

A spokesperson for Contreras-Sweet’s office said reports of an imminent deal were speculative.

“No deal in place,” the spokesman emailed. “Nothing to report.”

Contreras-Sweet is hoping to install an all-female board of directors and to try to turn the Weinstein Company’s tarnished brand and legacy into something positive and feminist. She also gets a library of such award-winning films as “The Artist” and “The King’s Speech,” as well as popular shows such as “Project Runway.”

However, the company has struggled financially for years, releasing flops like “Tulip Fever” and “Burnt,” while sinking deeper and deeper into debt. Its library is heavily leveraged and many projects that were in development have gone up in smoke in the wake of the harassment scandal.

There were reports that Yucaipa considered buying the Weinstein Company in 2015, but an insider denied that discussions ever took place.

In addition to working in Barack Obama’s administration, Contreras-Sweet was founding chairwoman of ProAmérica Bank and created Fortius Holdings, a private venture capital firm that invests in small businesses, particularly ones owned by Latinos and women.

Though Contreras-Sweet’s group is seen as the likely winner in the Weinstein bidding, one insider said that many hurdles remain and it could be days before a deal closes.

Deadline Hollywood first reported Contreras-Sweet as the frontrunner for The Weinstein Company.

[The Ultimate Nullifier]

deadline.com/2018/01/weinstein-company-maria-contreras-sweet-bid-harvey-weinstein-bob-weinstein-ron-burkle-lantern-capital-1202235050/


Maria Contreras-Sweet Bid Leads Weinstein Co Bidding; Staff Would Stay, Bob Weinstein Exit, Women Lead Board

EXCLUSIVE: After a protracted bidding process, the sale of the scandal-scarred The Weinstein Company is close at hand, and the company will rise from the ashes with a future that will be forged by women, timely news on a day when the Golden Globes is expected to be dominated by the #metoo theme, which was borne out of allegations of sexual assault and harassment by co-founder Harvey Weinstein. Maria Contreras-Sweet, former head of the U.S. Small Business Administration for the Barack Obama administration, has emerged as the frontrunner to soon complete a deal to buy the pieces and resurrect a company that will be renamed, and majority controlled by women, sources said. Ron Burkle’s Yucaipa Enterprises and Lantern Capital are minority partners in the bid, sources said. The derby isn’t quite done yet and Lionsgate is also squarely in the mix.

Bob Weinstein, who founded TWC with brother Harvey Weinstein, is expected to exit and set up his own company and take the Dimension Films name along with properties that include The Six Million Dollar Man, which has interest from both Warner Bros. and potential star Mark Wahlberg.

As Deadline reported last December, the board pored over bids — more than 20 came in, including bids for just the TV component, or the library — and the ones in the final round include Lionsgate, a Killer Content bid backed by Abigail Disney (daughter of Roy Disney), Shamrock Capital, Vine Investments, Sony (for the television business), MSD Partners, Critical Content, Versa, and Qatar-based beIN, which owns Miramax. The finalists are Contreras-Sweet, Lionsgate and Killer Content, which would for sure put women at the helm, as well as Sony, Shamrock and Vine, the latter two for the library.

The Wall Street Journal reported last week that the company will sell for around $500 million, a figure I’ve also heard. That number includes a purchase around $275 million, an infusion of fresh capital, plus the assumption of liabilities and operating costs that includes keeping employed the long-suffering 157 or so staffers and managers whose lives turned upside down the moment that The New York Times and The New Yorker detailed shocking first person accounts of sexual assault and harassment allegedly perpetrated by Harvey Weinstein, who was summarily fired by the board of directors.

TWC will quickly be renamed and it is all moving quickly as the intent is to complete the deal before the money runs out in February, when it would need bankruptcy protection. Phoenix might be an appropriate name given the potential turnaround here, but that is taken by Mike Medavoy’s company. There is the possibility this new company could be in motion for Sundance, where Weinstein was once the biggest buyer of prestige films, going all the way back to Steven Soderbergh’s sex lies & videotape.

If it is Contreras-Sweet who emerges victorious, she certainly puts a positive face on a company that badly needs one. Her bid has no contingencies, and solid backing. She is an immigrant from Guadalajara, Mexico and was executive chairwoman and founder of ProAmerica Band, a commercial lender to small to mid-sized business with a specialty in the Latino community. She became California’s cabinet secretary overseeing the Business, Transportation and Housing Agency before spending three years as a member of President Obama’s cabinet.

Contreras-Sweet has followed through on her pitch letter to the board of directors in late November, where she promised to not only assume liabilities but also infuse new capital to retain staff and pay suppliers. While the shock of the Weinstein scandal left those with TV or movie projects wanting to get far away with series and films that have been stalled, that stigma might be removed if this deal makes. Her bid was blessed by Gloria Allred, who will rep numerous women who file civil lawsuits against Weinstein. Included is contingency funding that will be paired with insurance policies to cover liabilities related to claims against Weinstein.

The bidder inherits a strong lineup of library titles and output deals with the likes of Netflix. Projects include the Kevin Costner-Taylor Sheridan series Yellowstone, movies like the recut Benedict Cumberbatch-Michael Shannon-starrer The Current War and the Lin-Manuel Miranda and Quiara Alegría Hudes musical In The Heights, Hotel Mumbai, the Armie Hammer-Dev Patel starrer Hotel Mumbai, as well as numerous other series and films. It might make possible the David O Russell-directed series with Robert De Niro and Julianne Moore, which was scrapped at Amazon even though it had a two-season commitment.

Investment banker Lloyd Greif said word has circled that it came down to Contreras-Sweet and Lionsgate, with motivations that couldn’t be more different: Lionsgate is looking to bulk up its portfolio at a time when companies are looking to grow larger in the wake of the Disney acquisition of Fox and the pending merger of AT&T and Time Warner.

“You’re either prey or predator,” Greif said. “This is an opportunity to buy on the cheap.”

In this scenario, Lionsgate would look to acquire content, but it doesn’t need or want the The Weinstein Co.’s organization. Even the tainted Weinstein brand might disappear, Greif said.

Contreras-Sweet presents a phoenix-rising-from-the ashes opportunity, in which, “The phoenix is wearing a dress,” Greif said. The new company, he said, “will be accepted by the entertainment community at large — writers, actors and directors.”

Contreras-Sweet is the only potential acquirer who would keep the studio intact — making her the likely preferred buyer, assuming all offers are roughly equal. This option also gives The Weinstein Co.’s board to claim a modest victory at a moment of defeat. After all, the investors who were once close to a mega-deal with ITV that imploded when Weinstein was investigated for groping an actress/model in New York. would essentially walk away losing their investment. The board is expected to be gone in the new configuration.

“The board could say, ‘We saved all these people’s jobs!'” Greif said.

No comment from TWC.

[The Ultimate Nullifier]

www.hollywoodreporter.com/news/weinstein-cos-leading-bidder-could-provide-female-ownership-1072282

Weinstein Co.'s Leading Bidder Could Provide Female Ownership

Maria Contreras-Sweet, now backed by Ron Burkle, could buy the company with a group of female Silicon Valley investors and install a women-led board as Bob Weinstein eyes a new company of his own.
Harvey Weinstein's former company, owned and run by women?

It could happen under a plan gathering steam, according to sources close to the Weinstein Co. auction process.

A potentially winning bid for the beleaguered film and television company from Maria Contreras-Sweet, who ran the Small Business Administration under President Barack Obama, has attracted backing from investor Ron Burkle.

Contreras-Sweet has put together a group of investors, which include women from Silicon Valley as well as Lantern Asset Management, which would take a 51 percent stake in a reorganized TWC, assume the current company’s debts and also set up a litigation fund to handle any claims not covered by insurance.

Contreras-Sweet's plan would include installing a female-majority board to oversee the company.

TWC declined to comment, and sources say the Contreras-Sweet-led bid is not a done deal. But she is said to be scouting properties in Los Angeles, including the offices of recently shuttered Broad Green Pictures, which could house a new incarnation of TWC.

If the Contreras-Sweet bid is successful, TWC co-founder Bob Weinstein would be given certain assets. He is expected to then start his own company, which a source says is tentatively named Watch This, a favorite phrase of his. Weinstein declined to comment.

While the TWC board has been reviewing offers for the past two weeks, a source says a late bid from Miramax, the Weinstein brothers' original company, which is now controlled by the beIN Media Group, also remains on the table, as well as offers from other prospective buyers such as Lionsgate and Len Blavatnik, who is owed some $50 million from TWC.

A source says the plan would be to retain most of TWC’s current staff of about 150, led by COO David Glasser, and create an employee-friendly campus with amenities such as complimentary meals.

While a spokesman for Burkle told The Hollywood Reporter in October that “we have not made any overtures” for TWC, the billionaire is now believed to be backing the Contreras-Sweet bid, according to sources.

Burkle has long-standing ties to ousted TWC co-founder Harvey Weinstein, having invested in such TWC films as August: Osage County and The Giver. In 2015, he considered making a play for the then-financially challenged TWC and merge it with Independent Talent Group, a U.K. agency in which he has a significant interest.

At the time, Burkle's reps neither confirmed nor denied his interest to THR, saying only that "Ron thinks very highly of Harvey." Since October, when exposés in The New York Times and The New Yorker's charged Weinstein with decades of sexual assault and harassment, the future of the company has been in question.

Weinstein was terminated from TWC, although he remains a shareholder.

With Harvey Weinstein’s name becoming toxic, TWC postponed several upcoming releases, such as the period drama The Current War, starring Benedict Cumberbatch, and it sold off domestic rights to the Paddington sequel to Warner Bros. for a reported $28 million to keep afloat.

[The Ultimate Nullifier]

www.hollywoodreporter.com/news/behind-weinstein-bid-female-empowerment-a-key-backers-baggage-1073500

Behind the Weinstein Co. Bid: Female Empowerment and a Key Backer's Baggage

Maria Contreras-Sweet and a women-majority board could bring a fresh start for the House of Harvey, but investor Ron Burkle's background isn't totally on-message.
A sale of the embattled Weinstein Co. may be imminent. But the leading bid — fronted by Obama administration alum Maria Contreras-Sweet and backed by billionaire Ron Burkle — is raising eyebrows in some quarters of Hollywood.

Sources say Burkle has remained in contact with Harvey Weinstein, who has kept a low profile since the first allegations surfaced in articles in The New York Times and The New Yorker in early October. And if Contreras-Sweet's bid wins at auction, it could give Burkle, who would be a minority investor among several others, a foothold in a company that has been rocked by dozens of women claiming that Weinstein sexually assaulted and harassed them.

"I find it profoundly disturbing, leaning toward sociopathy," says Rose McGowan, who was one of the first to call out Weinstein for sexually predatory behavior and has become an outspoken critic of Hollywood's culture of misogyny. "It makes me despise these replicants even more."

That sentiment is echoed by several former TWC staffers and filmmakers with ties to the studio. "Based on optics alone, this is a terrible move," says one producer who has made several movies with the studio.

Although the Contreras-Sweet bid could fall through, insiders say it is expected to close by the Martin Luther King Jr. holiday weekend. She is competing against several suitors, including Lionsgate (which is eyeing piecemeal assets rather than the company as a whole) as well as a Killer Films-Abigail Disney bid and one from Len Blavatnik, who is owed $49 million by TWC and likely would take assets in a debt swap. There are other bids on the table that are bankruptcy-contingent, though TWC is trying to avoid that scenario.

The price tag could be as high as the $500 million floated in a Jan. 4 Wall Street Journal report. But one bidder says his group's offer is a fraction of that. That bidder, who has seen the books, was pleasantly surprised to find there is more insurance to cover the Weinstein-related claims than was thought. So far, the company is facing four lawsuits: two class action suits and two from individuals.

A Burkle rep denies there is a deal in place with Contreras-Sweet, but multiple people involved with the bidding process say he has made a commitment to join the group backing the venture. A source says TWC's employees overwhelmingly support the bid fronted by Contreras-Sweet, whose plan is for a board controlled by women, and she is gathering a group of investors, many of them Silicon Valley females, for a 51 percent stake.

Burkle has a long-standing business relationship with Harvey Weinstein and his former company, having invested in such TWC films as August: Osage County and Crouching Tiger, Hidden Dragon: Sword of Destiny. In a 2012 profile in The New Yorker, Burkle spoke glowingly of his friendship with Weinstein and how they traveled together to the Cannes and Sundance film festivals. A knowledgeable source says that about a year ago, Burkle made a 90-day loan to TWC to shore up cash-flow issues (a Burkle rep strongly denies that such a loan was made).

Burkle's past investments could provide awkward optics for Contreras-Sweet, who said in her pitch to buy the company that she was "profoundly affected by the recent revelations surrounding the company's leadership." Through his founding stake in Wall Street firm Colbeck Capital Management, Burkle ended up reportedly becoming an investor in Manwin (now called MindGeek), the largest online porn purveyor in the world (a Burkle rep says that the fund had money in dozens of businesses and he was unaware of the $362 million investment in Manwin). Burkle also has an embarrassing association with Jeffrey Epstein, having flown on the convicted pedophile's so-called "Lolita Express" (his name appeared in flight logs as well as in Epstein's "little black book," both of which surfaced in 2015). A Burkle rep says that other moguls also flew on Epstein’s private jet, that Burkle took just one flight and that he has no current relationship with the disgraced billionaire.

Still, Burkle also is a noted philanthropist and has hosted the Rape Foundation's annual fundraiser on his Green Acres property in Los Angeles. A source close to the bidding process says the Contreras-Sweet group has vetted Burkle and has determined there is no cause for alarm.

Financial analysts who have been watching the sale process applaud the effort to install female ownership but question why Contreras-Sweet would try to buy TWC rather than launch a female-led studio in the vein of Megan Ellison's Annapurna Pictures. "All of this is fuzzy logic," says Wall Street analyst Hal Vogel. "This is a company that comes with a tote bag full of liabilities and lawsuits. The liabilities probably extend to individuals as well as to the corporation as well as to individual projects. It's a mess."

But having Contreras-Sweet, who ran the Small Business Administration under President Obama, as chairman — as her bid promises — might go a long way in helping soften the blow of the legal and reputation turmoil. "The company would be better suited to settle these claims with [Contreras-Sweet] — even as a figurehead — than with a group of men," says Larry Hutcher, co-managing partner at Davidoff Hutcher & Citron and a specialist in "corporate divorce." "That's a huge advantage that bid has. Will [an accuser] really want to fight to get the last dollar claim that they would have?"

But one impediment to a sale to any bidder, including Contreras-Sweet, is that Weinstein must sign off on it (like his brother, Bob Weinstein, Harvey owns about 23 percent of the company). That's where Burkle's association could be an asset, helping convince Weinstein to acquiesce.

Whatever group emerges as the new owner will have their work cut out for them and not a great deal of incoming revenue in the immediate future. On the film side, TWC has just five finished films that are ready for release: the Benedict Cumberbatch-Michael Shannon starrer The Current War and the Bryan Cranston-Kevin Hart pairing for The Upside (both of which made their world premieres at the Toronto Film Festival in September), as well as the India-set terrorist thriller Hotel Mumbai, the biblical drama Mary Magdalene and the Robert De Niro comedy The War With Grandpa.

The library rights are largely encumbered. On the TV side, TWC boasts the reality hit Project Runway, though that franchise, which launched in 2004, has likely peaked. "To restart this thing is a three-year process at a minimum," says Vogel. "Especially for someone who is an outsider to the business."

For her part, Contreras-Sweet has been looking for office space in Los Angeles, including the former Broad Green offices near the Paramount lot. A source says she wants to maintain Broad Green's campuslike space and create a more employee-friendly company, with three meals a day and health benefits that include acupuncture and massages. That would be a 180-degree change from the type of massages Weinstein was known for.

Jan. 11, 2018 Updated to include additional information from Burkle’s rep.

This story first appeared in the Jan. 10 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

subscribe.hollywoodreporter.com/sub/?p=THR&f=saleb&s=IH1402HR20

[The Ultimate Nullifier]

variety.com/2018/biz/news/weinstein-co-maria-contreras-sweet-weinstein-co-deal-1202673897/#utm_medium=social&utm_source=email&utm_campaign=social_bar&utm_content=bottom&utm_id=1202673897

Maria Contreras-Sweet Investor Group Closes in on Weinstein Co. Acquisition

UPDATED: The investor group led by former Small Business Administration chief Maria Contreras-Sweet is closing in on an acquisition of Weinstein Co. valued at around $500 million, with some backing from financier Ron Burkle.

The Contreras-Sweet’s group has been in the hunt for Weinstein Co. for the past two months. In recent days, the group came to the banker handling the sale, Moelis & Co., with another pre-emptive offer with what a source described as “improved terms” designed to avoid any kind of bankruptcy proceedings for the company, which has been in a tailspin since co-founder Harvey Weinstein was accused of rape and assault by multiple women in October. That new offer prompted Moelis to enter into an exclusive negotiating window with Contreras-Sweet.

The sides had gone back and forth on setting an exclusive negotiating window for the past two weeks but only entered into the agreement on Tuesday.

Burkle’s Yucaipa Co. will provide some financing but is described by a source as a minority investor with around 20%-25% of the equity. The new proposal has been structured to set aside money for restitution to Harvey Weinstein victims, pay off creditors and lenders as well as keep most of the company and its employees intact. Bob Weinstein, co-founder and brother of Harvey Weinstein, is expected to leave the company and take the assets of the Dimension Films genre banner that he has long steered.

A source familiar with the bid said the plan is to assume all of TWC’s liabilities, inject fresh capital into the company and pay down its considerable debts. TWC is undoubtedly in for a slew of lawsuits from victims of Harvey Weinstein. The bid is said to include as much as $30 million for a victims restitution fund and banks on TWC’s existing insurance policies to help cover future claims. Contreras-Sweet has vowed to assemble a new board of directors that would be majority female.

There’s still no word on who would actually run the day-to-day operations — whether Contreras-Sweet or another leader — and how much of TWC’s existing senior management would stay in place. The detailed reports on how Harvey Weinstein used TWC staffers and resources to facilitate his alleged sexual misconduct has cast a shadow over senior executives who could have been in a position to know about such behavior and questionable company expenditures. Harvey Weinstein has denied having any sexual encounters that were not consensual.

Burkle’s past association with TWC and Harvey Weinstein in particular has raised questions of whether his involvement of the deal flies in the face of Contreras-Sweet’s stated goal of rehabilitating the TWC assets by bringing female leadership to the company that has become synonymous with sexual harassment in Hollywood. Burkle’s son Andrew is believed to work for TWC in its Beverly Hills office.

Moelis & Co. declined to comment. Reps for Contreras-Sweet declined to comment while a rep for Burkle did not respond to requests for comment.

Harvey Weinstein was fired from his post as co-chairman of TWC in October and he also stepped down as a board member. It believed that the sale will not provide any windfall to TWC’s existing shareholders, a list that includes the Weinstein brothers and longtime TWC investors WPP and Goldman Sachs.

Other contenders for TWC assets have included Lionsgate, MGM, Killer Content (with backing from Abigail Disney), Shamrock Capital Advisors, and Miramax parent company BeIn Media Group. There had been rumblings that the Weinstein brothers had been trying steer a sale to Miramax in an effort to reunite their TWC and Miramax (the company they founded in 1979 and later sold to Disney) legacies in the hopes of eventually returning to the combined company.

Deadline first reported Contreras-Sweet’s move into an exclusive negotiations with Moelis and TWC.