Walt Disney Co.'s divorce from Miramax Film founders Bob and Harvey Weinstein just got more costly as audiences last weekend ran for cover from their "The Great Raid" war movie.
Grossing $3.4 million from its showing on about 800 screens, despite a $20-million promotional budget, the lackluster opening could portend a Disney write-off if the movie fails to subsequently catch on in theaters and on DVD.
For Disney, "The Great Raid" could be the first in a string of potential headaches in dealing with the remaining films made while the Weinsteins were part of the corporate family. The Burbank entertainment giant is on the hook for all marketing and distribution costs — and any potential losses — on seven other Miramax releases that are being rushed into theaters before the brothers split for good Sept. 30 to run their own company.
Both sides called the unusual move to hurry the films into theaters a joint decision. The Weinsteins were particularly insistent on making sure that they could handle the marketing and release of the movies for their filmmakers before they leave Disney. ("The Libertine" period piece starring Johnny Depp was the exception, recently moved from September to December to increase Depp's Oscar chances.)
"Everybody felt it was best that we see the movies through before the transition was over," said Bob Weinstein, who runs Miramax's Dimension Films label.
Last week, Disney Chief Financial Officer Thomas O. Staggs singled out the Miramax releases in a conference call with analysts. He warned that "the marketing and distribution expenses associated with these titles will impact this year's operating income in the fourth quarter," although he added that those costs could be offset if the films performed well.
But some of the films have been gathering dust for two years or more, usually a red flag in Hollywood as to commercial prospects. "The Great Raid," was shot in 2002. Still to come is the Aug. 26 release of Terry Gilliam's "The Brothers Grimm," starring Matt Damon, which was filmed two years ago.
Media analyst Richard Greenfield said that based in part on Disney's upcoming "unusually heavy release slate" with so many Miramax titles, his firm, Fulcrum Global Partners, had reduced its fourth-quarter estimates for Disney to 26 cents a share from 29 cents.
"The impact of releasing this many films this quickly is going to burden Disney because of the P&A [prints and advertising] costs," Greenfield said.
Bob Weinstein suggested the films might have been released earlier had it not been for the brothers' protracted breakup with Disney. The brothers were immersed for months in negotiating a settlement with Disney, which chose not to renew their contracts after 12 tumultuous years. Both sides finally signed off in March, with the brothers walking away with a settlement of more than $100 million.