Private equity firm Colony Capital has agreed to provide an immediate capital investment in independent film studio The Weinstein Co. after its co-founder Harvey Weinstein was fired amid sexual assault and harassment allegations.
The Weinstein Co. was established in October 2005 by two brothers Bob and Harvey Weinstein. Founded in New York, the multimedia production company has grown into an iconic film and television house, releasing a myriad of projects including: Silver Linings Playbook, Lee Daniel’s The Butler, Mob Wives, Million Dollar Shoppers and soon to be released The Hateful Eight. Between Harvey and Bob’s tenure in the entertainment industry, the brother duo have received approximately 341 Oscar nominations and won 81 Academy Awards.
Information alleging the distribution company’s co-founder Harvey Weinstein of sexual assault was first reported by the New York Times, with The New Yorker later publishing a story with multiple women sharing more elaborate accounts of harassment by the film executive. The accusations have led to Harvey Weinstein’s name being axed from the company’s TV and film credits, in addition to a newly-revoked Academy membership. Financial terms of Colony Capital’s investment were not disclosed.
“We believe that Colony’s investment and sponsorship will help stabilize the company’s current operations, as well as provide comfort to our critical distribution, production and talent partners around the world,” states The Weinstein Co. board member Tarak Ben Ammar. “Colony’s successful experience and track record in media and entertainment will be invaluable to the company as we move forward.”
Colony Capital, led by investor Tom Barrack, is the global private equity arm of international investment firm Colony NorthStar (NYSE: CLNS), which it combined with in June 2016. The Los Angeles-based PE firm has invested more than $100 billion in capital since its inception in 1991. The investment will also give Colony Capital a stake television projects Project Runway and Netflix scripted series Marco Polo. The PE firm is no stranger to the entertainment industry. In 2010, Colony capital bought Miramax Films, the film distribution company founded by the Weinstein brothers for $660 million before selling the company to BeIN Media Group in 2016.
Media M&A is striking hot and expected to heat up even more, as technology disrupting traditional distribution and consumption habits grabs the interest of investors. Recent media deals include: Discovery Communications Inc.’s (Nasdaq: DISCA) agreement to buy Scripps Networks Interactive Inc. (Nasdaq: SNI); Sinclair Broadcast Group Inc.’s (Nasdaq: SBGI) purchase of Tribune Media Co. (NYSE: TRCO) for about $3.9 billion; media billionaire Rupert Murdoch’s pending acquisition of European pay-TV provider Sky Plc for nearly $14.6 billion; American Media Inc.’s agreement to buy Us Weekly from Wenner Media LLC; Moore Frères & Company’s completed purchase of Opera TV for its over-the-top (OTT) video streaming software; AMC Networks’ $65 million investment in RLJ Entertainment Inc. (Nasdaq: RLJE), a company backed BET founder Robert L. Johnson; and Shanghai Media Group Pictures’ acquisition of the television rights to BBC Worldwide’s Doctor Who drama series.