After the dismal opening of atrocious musical Nine, the Weinstein-hating community is on tenterhooks awaiting at last the loathsome duo's spectacular implosion. Alas, it appears that the Weinsteins will dwindle away with a whimper, not disappear with a satisfying bang.
The New York Post's Peter Lauria reports that the Weinsteins are searching yet again for ways to keep cash coming in and stave off creditors, but they've got some leverage: Ambac, the company that insured the Weinstein's $500 million debt to Goldman Sachs and other creditors, is itself on the verge of bankruptcy. So if Goldman et. al. calls in their chits, they would be facing something approaching a total loss:
According to sources, the current thinking is that since Ambac's own financial troubles likely mean that the insurer can't repay the $500 million in debt in full, and the studio's current assets are likely worth less than that amount, the best thing to do is let Harvey and Bob have a few more chances at bat in the hopes of hitting another home run on par with Inglourious Basterds.
That's another way of saying that: "Let's keep throwing good money after bad." Lauria reports that there are a few different options on the table for keeping the Weinsteins solvent, but the upshot is that they can only afford to release eight more films at their current burn rate, and the company's creditors are trying to come up with a way to afford them an additional four to six releases a year to increase the chances that one of them will come up roses and make, oh, maybe $500 million or so.
But at the same time, the Weinsteins have been eating their seed corn by selling off the foreign rights to their films. That minimizes risk on flops like Nine—the company sold off foreign rights for $50 million, a good chunk of the film's $64 million production budget, making it less painful when they have to pull it back from 1,400 screens nationwide to 800 or so next month because no one is going to see it.
But it means selling away the upside on hits like Inglourious Basterds, which made $300 million, half of which went to Universal. It's a strategy that keeps the Weinsteins alive as long as their creditors are willing, but makes the likelihood that they'll ever hit enough paydirt to escape the cycle of debt increasingly remote: The more movies the make, the more money they need. The more money they need, the more rights they sell. The more rights they sell, the less money they make. Etc. That's a strategy for slowly wasting away. Bankruptcy would be much more fun.