Sometimes the closest bonds feed the biggest grudges and collect the biggest secrets. It’s starting to look like Bob is going to make sure big brother never works in Hollywood again.
Harvey Weinstein spent his life making media connections. Unfortunately, he apparently spent a few of those decades harassing women and covering up the stories.
It took a weekend for it all to unravel. Accelerated falls from grace like that generally have help from the inside — and as anyone who’s spent a lot of time around HNW families knows, dynastic struggles can get pretty savage.
Bob Weinstein has spent his life in Harvey’s shadow. He’s watched Harvey’s business decisions cast a shadow on the studio that bears both their names again and again.
This time, revelations about Harvey’s sordid personal life have made that problem go away. They’re damaging revelations. Bob may be free of big brother for good.
Who benefits?
Once word broke Thursday night that Harvey has a history of propositioning young actresses, reporters and household staff plenty of others stepped forward to confirm the rumor.
To put it kindly, he’s got a strong exhibitionist streak. When you’re a mogul making and breaking careers, that doesn’t fly in modern Hollywood. It’s unprofessional, abusive and challenges the sincerity of his progressive politics.
In other words, he’s industry poison. Celebrities don’t want to work with him. He can’t make deals.
And as far as the studio he built goes, he’s gone. His friends on the Weinstein board quit within hours. The remaining directors — including his brother — unanimously voted to end his contract.
While he seems to retain his 20%-25% ownership stake for now, he’s out of the decision chain. His movies don’t get made. His strategic goals don’t get pursued.
A junior executive will be stepping up to call the day-to-day shots. Bob will be that guy’s boss.
Late-night rumor has it they’ll be changing the name of the studio to wash away the taint. Bob can probably weather the scandal in any event. He’s got his own production line and it makes more money than Oscars.
But somebody on the inside track primed the rumor pump by leaking documentation of the way Harvey paid off the women who objected to his behavior.
The Weinstein Company kept a file. The board was aware of his history — arguably they’re complicit in letting him go this long.
My guess is that if Harvey had kept the hits coming fast enough, they would have gritted their teeth and rolled their eyes. When he didn’t deliver, they pulled the rope.
Either way, now that he’s out of the picture, they can sell off his back catalog and reinvest the cash in projects they’d rather pursue. For Bob, that generally means smart genre movies, horror franchises and cartoons that offer less prestige and faster ROI.
Harvey and his relentless pursuit of one more Oscar sucked all the air out of that side of the studio. His personal habits provided cover for getting him out of the way.
Until they buy him out or an outsider steps up, he’s not going to get a steady paycheck from the studio as it’s currently structured. Companies like this pay salaries, not dividends.
Maybe he’ll get a severance package as they send him on his way. From the tone around his termination announcement, there’s no guarantee.
From family business to civil war
Without the fraternal partnership, there’s really no reason to keep the company intact. Bob already has Dimension Films to play with, after all.
Weinstein seemed to drift over the years, prestigious without giving any of the investors the lucrative exit they wanted.
Harvey’s resentment over selling Miramax cheap in the early ‘90s drove him to overcapitalize the studio early and then chase ever-higher valuations whenever anyone came looking to buy.
If it were up to him, he probably would have bought Miramax back at a deep loss. I have a feeling Bob’s more eager to make the opposite move, selling Weinstein to cash out and start over on his own.
In that scenario, maybe Harvey will get $100-150 million for his stake. He’ll be able to start over too — he’s already talking about taking on the National Rifle Association in the political arena.
In a way, they’re luckier than other dynastic families where the business they inherit is too big for any one member to steer without internal interference. Those families constantly need to consolidate power among the leaders and alienate potential rivals.
Those rivals generally get bought out when they lose a power struggle. Finding the cash can be a drain on the enterprise, but ultimately the sweetest rewards generally come to those who remain on the inside.
Think of the Koch brothers: Charles and David remained engaged in the family business and became two of the richest people on the planet. Bill and Frederick drifted to the margins, becoming billionaires on a much smaller scale.
Harvey’s lifetime of indiscretion just pushed him to the “Bill and Frederick” side of the scale. It’s Bob’s company now. He can sell it, reshape it, do whatever he wants.
At least there’s still a studio left to steer. Leaving Harvey in charge would’ve tainted everything, while a protracted fight for control probably would’ve had a similar destructive impact.
When family can work together, it’s a miraculous thing that builds empires. But when they can’t, it’s probably best to divide the assets and move on. Those who want to run the enterprise can do so. Those who would rather pursue other interests can do that.
Dynastic planning revolves around knowing the personalities so you can ease the tensions and the transitions. Harvey and Bob probably won’t leave a unified company to the next generation of Weinstein heirs. One way or another, they’ve made their split.
Whether Harvey fell or was pushed might be a matter of perspective, but few will deny he shouldn’t have been up on that ledge in the first place.
