In this new series of articles, we will take a closer look at a number of the Walt Disney Company’s major acquisitions over the last 25+ years including Marvel Entertainment, Lucasfilms, ESPN, Hulu, or Fox.
The past two decades have created an amazing run for the company with skyrocketing stock prices, the development of new lands and attractions at Disney Parks around the world, and the great success of Disney+, Disney’s streaming service. This series will explore how the Walt Disney Company came to acquire many companies and properties.
You’ll find that the purchase of these media outlets wasn’t as simple as throwing exorbitant amounts of money at a company and then adding their history as Disney’s own. The road to these acquisitions was often years’ worth of networking, time, and successes and failures.
One of the first of Disney’s major acquisitions was the purchase of Miramax in 1993.
Rewind to 1993
For now, let’s rewind back to 1993: A time when Disney only owned Disney properties, Disney+ wasn’t even a concept (what’s a streaming service?) and the days of Michael Eisner greeting us in his Mickey Mouse polo before ABC’s The Wonderful World of Disney put a smile on everyone’s face.
At this time, Disney didn’t have the financial power it has today, and the idea of completely purchasing new properties was a fairly new concept for the Walt Disney Company. However, they were about to embark on quite a journey starting with the acquisition of Miramax in 1993.
Miramax was started in Buffalo, New York by brothers Bob and Harvey Weinstein with an initial focus on independent films. Miramax was put on the map with connections to iconic films such as Pulp Fiction, Clerks, and Shakespeare in Love, some of which were produced during Disney’s ownership. Miramax continued picking up steam throughout the 1990s and eventually struck gold with mega box-office hit, Chicago.
Just a few years before Chicago reached theaters, the thought process at the Walt Disney Company started to shift gears under then CEO Michael Eisner. During the late 1980s to mid-1990s, Eisner recognized a problem with some of the demographics connected to the Disney Company. The films, Parks, and properties worked great with families and children, but Eisner believed they were missing the mark when it came to young adults.
Around this time, Eisner implemented a push for more thrill rides and a nightlife at the Disney Parks, as well as a desire to add non-animated/non-family-friendly films to their library. Although never directly stated, it can be reasonably assumed that Miramax was one of the possible solutions to Eisner’s strategy of appealing to this older age group.
Unfortunately for Eisner, the Miramax deal didn’t pan out quite as hoped.
One concern with the Walt Disney Company acquiring organizations that produce films outside of the G or PG rating (PG-13 now not totally uncommon) is that it runs the risk of damaging Disney’s family-friendly image.
Eisner routinely did things within the Disney Parks and on the film side to appeal to young adults, and in a number of times got burned for it. Sure, Disney got access to a number of films they never had access to before, but the company also felt the wrath of the Weinsteins, which ultimately lead to bitter legal disputes.
In June 1993, the Walt Disney Company purchased Miramax. In the deal, Disney would pay Miramax $60 million and take on all of the company’s current debt. The purchase marked the first time Disney acquired a large company.
Much like the “Fox Deal” in the late 2010s, the Miramax deal did not include every operating arm of the company. Miramax International would still be operational and controlled by the Weinstein brothers. In addition, and arguably the most major provision, was that the Weinsteins would maintain creative and financial freedom. This freedom would prove to be a fatal flaw for brothers when it came time for contract negations.
Cracks In The Partnership
The 1990s would be filled with multiple issues between the Weinsteins and Disney mostly centered around the release of certain films.
One example of this issue was the development of an NC-17 movie labeled Kids. The movie would never be released with Miramax but rather under a side company that the Weinstein’s had created. Harvey Weinstein went as far as to buy back the rights to a number of films Disney would refuse to sign off on over the years. Once Weinstein owned the rights, he would release them under a different company name.
These splits in creative directions would be the start of the end for the Weinsteins at Miramax, although it wouldn’t materialize until a decade and one contract extension later. Creative differences again would plague the relationship in the late 1990s and early 2000s over films like Michael Moore’s Fahrenheit 9/11.
As time went on, the Weinsteins had more money to fund projects and explore the world of production and investments in films. One of the more notable films Miramax was first a part of was The Lord of the Rings. Unfortunately, the Walt Disney Company did not believe a two-film series (later turned into three) would work, so they only offered a deal for one film. Peter Jackson, the film’s director, turned down Disney’s one and done request. Disney’s denial of The Lord of the Rings deal only added to the troubled relationship between both parties.
Other discrepancies about what films Disney was willing to release under the Miramax name led to the brothers rarely speaking about the Walt Disney Company (according to online sources, this was because of looming litigation issues between the two parties). A 2005 article from The New York Times was even titled How the Tumultuous Marriage of Miramax and Disney Failed. It appears that the inevitable break up between Disney, the Weinstein brothers, and later Miramax was seen well before the 2005 departures of the brothers or the 2010 sell-off by Disney.
By the mid-2000s Bob Iger started to really look at possible future partners and became critical of their current partner in Miramax. Iger saw that Miramax had a significant drop off in the number of films being acquired in addition to the hefty overhead costs of paying the Weinsteins.
After public comments around 2004 by Iger, then president of the company, questioning the cost to operate Miramax, the industry couldn’t help but feel as if there was trouble in paradise. The troubled relationship between the parties may have played a signification role in an extension not being signed by the brothers and Disney, but even after a troubled relationship and failed contract extension were in play, Eisner still wanted to keep the Weinsteins in mind for a possible re-acquisition.
According to a 2004 New York Times article, Eisner explored the idea of selling Miramax back to the Weinstein’s but feared they would never be able to come up with the capital needed. In 2005, approximately the same time Iger took over as CEO, Disney/Miramax and the Weinstein’s officially separated as the contracts expired and were not renewed.
Once it was official that the Weinstein brothers were out at Miramax, Buena Vista Motion Pictures Group took control of the company. Miramax’s budget was said to have been significantly cut once Buena Vista Group took over. Hindsight is 20/20, but this could have had something to do with the future acquisitions that would soon take place over the next 10 years. On the Weinsteins’ front, the pair created a new company they named The Weinstein Company.
Between the acquisition of Miramax in 1993 to today, the then CEOs were on a two-decade-long tour of changing the winds of the Walt Disney Company. For CEO Michael Eisner, one of the focuses was on Disney’s bread and butter…animation. There is no doubt that the focus on the now-infamous “Disney Renaissance Era,” of 1989-1999, helped save the company and their stake as one of the world’s leaders in media. Sadly, the pixie dust would run out a bit after a series of questionable choices in both the film and theme park sides of the company. Eisner made way for Iger’s take over in 2004.
Build Vs. Buy
Unlike Eisner, Iger’s approach was on intellectual property and the race to buy up anything that could be used in the future. By 2010, the Walt Disney Company announced that it was going to cut over 60% of Miramax’s staff. From that point on, the writing was on the wall for Miramax. In addition to staff reductions, the number of films released also was sliced in half. The reductions paved the way for Disney to free up funds as they began their dominance in purchasing other major players in the industry.
Iger had a vision early on: he wanted to find a new outlet to deliver media (Disney+) and he wanted to use and acquire intellectual property (IPs) that would help increase Disney Park attendance.
As important as the initial Miramax acquisition was to the future of how Disney would do business, the company simply did not have enough IPs for Iger to make use of under his strategy. Iger knew that Miramax films, even the best of them, simply did not fit into the parks and couldn’t be easily monetized by way of attractions or consumer products.
The Beginning Of The End
The final nail(s) in the coffin for the Miramax and Disney relationship came in 2009 and 2012, when Disney landed absolute mega deals via acquisitions of Marvel Entertainment and Lucasfilms, respectively. Seeing no real benefit in funding Miramax, Bob Iger announced it was looking for a purchaser for the company.
Major companies expressed interest in making a deal, mostly with the intent of building their still-new streaming libraries. One of these companies was Google. In December 2010, Miramax was officially sold to Filmyard Holdings, an investment group, for well over $600 Million. According to CNN Business, the sale meant the transfer of over 700 properties from film, tv, and projects.
After Disney’s sale of Miramax to Filmyards Holdings, Miramax would continue struggling to find a permanent home. In 2016, the company again was sold. Lastly, a partial sale of 49% of the company was completed in 2019. During this time, news broke about Harvey Weinstein’s troubling past.
As time went on, news surrounding Miramax, specifically Harvey Weinstein, would circulate all over the world. Stories of Weinstein’s long history of sexual assault were made public and led to his 20+ year conviction. Verbal jabs were exchanged between the two parties and, at one point, Michael Eisner Tweeted, “Fired Weinsteins because they were irresponsible, and Harvey was an incorrigible bully”.
Although Eisner claims the Weinsteins were fired, it was widely assumed that the two negotiated out of the contract, a matter we may never truly know. It is worth noting that the tweet was sent after the sexual assault allegations started to surround Weinstein. Various parties at Disney would be questioned about their knowledge of Weinstein’s horrible acts.
Good Deal or Bad Deal?
After reading this article, you may be thinking: “What a horrible deal this played out to be.” To that, I say yes and no.
Even in the days of Walt, the company took part in a number of questionable decisions. Then again, what major company hasn’t? It is through these decisions you grow as a leader and as a company.
For Michael Eisner, he identified a real problem in a certain demographic not being represented within Disney content or Parks. As the head of the company, it was Eisner’s job to address these issues and if it wasn’t for his attempt to correct them, we would never have had Splash Mountain.
Unfortunately, with every risk, there are ramifications, and as such, a lot of decisions didn’t play out well for Disney.
Live And Learn
Although Miramax is no longer part of the Disney family, the company grew from the acquisition. If not for Eisner bringing in Miramax, I question if Iger would have the path laid for him with respect to future acquisitions such as Pixar, or, at the very least, if Eisner’s faults would have been repeated in far more lucrative deals by way of Lucasfilms or Marvel Entertainment.
The Miramax/Disney partnership should be remembered as the first time a real acquisition was attempted and completed by the Walt Disney Company.
Miramax: a good Disney acquisition, or a learning opportunity?