Weinstein Co. Is Said Close to $35 Million Fortress Loan
(Bloomberg) -- Weinstein Co., the beleaguered film studio whose co-founder has been accused of sexual assault, is close to obtaining a crucial loan of about $35 million from Fortress Investment Group LLC, according to a person with knowledge of the matter.
The funds could be available as soon as this week, buying time for the New York-based film company to weigh options including a possible sale and avert job cuts, said the person, who asked not to be identified because the matter is private. The studio is dealing with the financial and public relations fallout from the sexual assault allegations leveled against Harvey Weinstein.
Weinstein, 65, was fired from his post as chief executive officer earlier this month after the New York Times and the New Yorker published accounts in which several women accused him of sexual harassment and rape. He has denied any non-consensual sexual activity. Billionaire Tom Barrack’s Colony Capital backed out of plans to help the company this week.
The New York Times, which reported Colony’s decision earlier, said Wednesday Fortress was considering an investment.
A final agreement hasn’t been signed and the deal could still fall through. The loan would be secured by assets of Weinstein Co. and would meet about three months’ of cash needs, the person said. Funds would go toward ongoing operations, such as payroll, not to shareholders.
New York-based Fortress has deep roots in entertainment. It provided credit to the Oscar-winning New Regency Productions, which is part-owned by 21st Century Fox Inc. and made the best picture winners “Birdman” and “12 Years a Slave.” Fortress also lent $300 million to singer Michael Jackson, secured partially by his then-stake in the Beatles song catalog.
In 2014, Fortress acquired Revolution Studios, which owned a library of films including “Black Hawk Down.” The fund recapitalized the company and sold it in 2017 to Content Partners.
Weinstein Co., the producer of television shows such as “Project Runway” and movies like Oscar winner “The King’s Speech,” is hobbled by debt and potential liabilities from the actions of its co-founder, Barrack said this week on Bloomberg TV.
“If the Weinstein element could be removed, if the toxicity of the liabilities that surround it could be addressed, and if the content of the company could continue on in a normal way, there’s some value,” Barrack said in the interview.
Weinstein Chief Operating Officer David Glasser said the company’s future was dire in an interview with the website Deadline Hollywood before the Colony talks were reported. Glasser said the brand had been destroyed.
©2017 Bloomberg L.P.