Insolvent Basterds?

Back in mid-August, the New York Times Sunday Business section ran a lengthy piece by David Segal headlined Weinsteins Struggle to Regain Their Touch. The article looked at Bob and Harvey Weinstein, the independent studio heads who since left Disney (which owned their "studio indie" company Miramax) to found the Weinstein Company in 2005.

Segal's work drew some criticism for being soft on the brothers, who were bleeding money after a series of flops since founding of the company with $1 billion in funding from investors like LVMH, Mark Cuban, and Japan's SoftBank Corporation. That group was brought together with the help of Goldman Sachs. Segal reported on a $75 million bridge loan from Ziff Brothers Investments, but couldn't get anything too specific. ("We are a private company and aren’t going to comment on unsubstantiated claims from unnamed sources," Harvey Weinstein told Segal.)

On The Wrap, Sharon Waxman griped, "Leave it to the New York Times to take 5,000 words to give us a small amount of new information about the ailing Weinstein Company, which David Segal (um, who?) does in Sunday’s business section…" (That "um, who?" line was pretty handily dispatched by Women's Wear Daily's Irin Carmon who found several stories in which Waxman and Segal shared bylines when they were both at the Times.)

Today, the Wall Street Journal's Lauren A.E. Schuker gets some more concrete numbers, writing, "The four-year-old film company has burned through most of the roughly $1.2 billion in debt and equity financing raised for its launch…" (Schuker cites "several people" for that figure, but Harvey Weinstein responds—if a bit defensively—that, "The company has the resources to meet all our obligations, from production to release of our films.")

As for that bridge loan, Schuker reports (again citing unnamed people "familiar with the situation") that the company has not repaid it. Accoding to Schuker, "An initial offering from Goldman projected that the company would release about 30 films a year, and would rack up more than $160 million in profit by the end of 2009. With three months left in 2009, the brothers appear to have fallen short of that goal, and they are now aiming to release just eight to 10 movies next year."

The Weinstein company did have a big hit in the time since the Times looked at its business in August: Quentin Tarantino's Inglourious Basterds, which earned $110 million domestically. (Box Office Mojo puts its worldwide box office at $227.9 million—not bad for a two and a half hour alternate reality history of World War II that doesn't feature teenage wizards or Batman.)

This weekend will tell if another aggressively-promoted Weinstein Company movie will help raise the brothers' fortunes. Michael Moore's Capitalism: A Love Story opened on Wednesday. Moore is a polarizing figure, but one who makes inexpensive movies that do well at the box office—especially for documentaries. (2004's Fahrenheit 9/11 earned $222.4 million worldwide on a reported budget of $6 million.) Many Web sites have furiously linked to Ira Stoll's newish site, Future of Capitalism, where a recent post pointed out that the movie, a critique of Wall Street greed (targeting, among others, Goldman Sachs) was funded and released by a company founded with the help of Goldman Sachs. (Matt Taibbi was right: They're everywhere.)

Critics may find that ironic (to say the least), but if Capitalism is a hit, it might mean that the Weinstein Company, which got its start via Goldman Sachs, might save its hide by criticizing the very company that midwifed it. Talk about the logic of late capitalism.