New battle for Disney chief
EMBATTLED Walt Disney chief executive Michael Eisner is fighting a new battle as Harvey and Bob Weinstein threaten to leave movie subsidiary Miramax over the renegotiation of their contracts.
The Weinsteins, whose films have earned an armful of Oscars in recent years, have been talking to potential backers of a new production company in case they eventually leave Miramax.
The Miramax founders are locked in talks with Eisner, who wants to cut their pay in the new four-year contracts due to start next year. The Weinsteins are refusing to accept. There are also disagreements over independence and film selection, with the brothers accusing Eisner of excessive interference in Miramax.
The departure of the Weinsteins would be a huge embarrassment for Eisner, who is still blamed by many shareholders for his failure to renew Disney's profitable relationship with Pixar, the digital animation company which made such blockbusters as Finding Nemo and Toy Story.
Miramax accounts for about 40% of Disney's entire movie output and earned $200m (£109m) for the company last year.
Faced with continuing opposition from shareholders, Eisner has predictably bought himself more time with the announcement of a 71% jump in its second quarter earnings to $314m. The result comfortably beat Wall Street's expectations and is the second quarter in a row when earnings have improved.
Eisner, who was stripped of his position as chairman in March, said the growth was partly due to the strengthening economy and partly because of his long-term growth strategy. Disney's performance improved across virtually all of its businesses.
His talks with the Weinstein brothers have been continuing for more than a year. The Weinsteins' lawyer, Bert Fields, said he did not believe the talks were near to breakdown, but a breakdown was 'always a possibility'. He added: 'You are talking about one organisation and two individuals who are not afraid of a fight.'
One idea being discussed is that the Weinsteins might buy Miramax back from Disney in a move that would break up the increasingly tense relationship between them and Eisner.
One recent conflict has been resolved. Disney has agreed to sell the rights to a Michael Moore documentary about the aftermath of 9/11 back to Miramax. Eisner had refused to distribute the film, called Fahrenheit 9/11, which is critical of President Bush. He argued it could jeopardise Disney tax breaks in Florida, whose governor is Bush's brother, Jeb.
