UPDATE: WEINSTEINS OFFICIALLY CREATE "A MAJOR FORCE IN URBAN ENTERTAINMENT" (NYT)
By Tom Tapp
***UPDATE BELOW***
In the first major news to come out to Allen & Company’s annual Sun Valley mogul meet, The New York Times is reporting that The Weinstein Company is close to a deal with Robert L. Johnson, founder of Black Entertainment Television, to create "an urban entertainment company." The venture could be announced as early as Thursday, say The Times' eavesdroppers.
NYT:
The joint venture is a first step toward creating a major force in minority entertainment, from producing films and television programming to new Internet programming, these people said. Initially, the venture will create low-cost films for the urban market, an audience that has often been ignored by the major studios but can be lucrative. Terms of the deal could not be learned.
The fact that the brothers Weinstein are at the conference at all is an accomplishment.
According to The Times, they were not invited, apparently because they'd employed Allen & Co. rival Goldman Sachs to raise money for their company. Attendees were surprised to see Harvey Weinstein in attendance, a feat made possible only through "some last-minute pleading behind the scenes."
As for the deal itself, The Times says it jives with the Weinsteins' stated goals for their company.
The Weinsteins ambitions are big no matter how small the company — movies, books, television and the Internet — and they are mostly hoping to grow through joint ventures and partnerships with other companies.
Likewise Johnson:
A deal between Weinstein and Mr. Johnson would be consistent with what Mr. Johnson has done throughout his career. With $15,000 in 1980, Mr. Johnson founded Black Entertainment Television, which in its early days thrived on programming music videos. The channel became a hip-hop force attracting both white and black audiences who liked the urban nature of its programming. The company was sold to Viacom two decades later for $3 billion.
Mr. Johnson’s other investments have included the Charlotte Bobcats basketball team and a music label. In 2005 he announced the formation of RLJ Companies, which he said he hoped would become a dominant black-owned financial services firm. One of his first acts was to secure the backing of the Carlyle Group to create a private equity fund. That fund is being started with Deutsche Asset Management and Urban Trust Bank, which Mr. Johnson owns.
UPDATE:The deal has now been announced. The details are as follows, from NYT:
It is official: Weinstein Companies and Robert L. Johnson’s private equity firm have unveiled their joint venture to produce films targeting African-American audiences.
The press release, which went out late Thursday morning, offers some additional details on the movie venture. The Weinsteins’s company will have an undisclosed equity stake in the company, to be called Our Stories Films, while Mr. Johnson will “control the decisions to produce, acquire and finance film projects.”
J.P. Morgan Chase has committed up to $175 million in financing for the project, the press release said. The release also indicates that the company will be capitalized at $200 million, suggesting the balance of the $25 million is coming from somewhere else.
Press release follows:
Film Production Company Focused in the African-American Family Comedy Genre Capitalized at $200 MillionBETHESDA, Md., July 13 /PRNewswire/ — Privately held RLJ Companies, LLC (”RLJ”) controlled by Robert L. Johnson, founder of BET and owner of the NBA Charlotte Bobcats, today announced that it has entered into a new venture with The Weinstein Company (”TWC”) to create a film company that will produce titles in the African-American family comedy genre. The announcement was made jointly today by Robert L. Johnson and Bob and Harvey Weinstein, co-chairmen of The Weinstein Company.
RLJ will launch Our Stories Films (”Our Stories”) shortly and the firm will be headquartered in Los Angeles with offices in New York City. Our Stories titles will be theatrically distributed by The Weinstein Company’s Dimension Films and on DVD by Genius Products, Inc. (OTC Bulletin Board: GNPI). Under the agreement, TWC will have an equity stake in the venture. Robert L. Johnson will run Our Stories and will control the decisions to produce, acquire and finance film projects. J.P. Morgan Chase has committed to financing the venture with up to $175 million under terms to be negotiated.
“We are thrilled to partner with Harvey and Bob Weinstein to fulfill this vision,” stated Robert L. Johnson, Chairman of Our Stories Films, “Never before has an African-American had ‘green light authority’ at a studio combined with this quality of financing and a distribution partner that has a proven track record in successful urban films.”
Bob and Harvey Weinstein stated, “We are proud to be behind this venture and are confident in Bob Johnson’s taste and his ability to identify projects that will be successful. We are committed to releasing a slate of films focused in the African-American family genre and to working with Our Stories to launch their exciting new brand.”
John W. Miller, Managing Director of JP Morgan Chase, stated, “This is a project that is long overdue in Hollywood and we are honored to be a part of making it happen. We could not be more excited about working with Bob Johnson, a partner who clearly understands the financial realities of the film business, and what it takes to market urban-based consumers.”
The company has begun assembling a topflight management team to be announced in the near future.
Related Links
Deal Is Seen for Creating Urban Films (NYT, sub)
