Disney Hikes Profits As Miramax Bros Seek Split

12 August 2004

As the Walt Disney Company reported a 20% rise in fiscal Q3 profits, the dollar-spinning Weinstein brothers Harvey and Bob -- founders of Disney unit Miramax Films -- seek to end their fraught relationship with beleaguered Disney ceo Michael Eisner

Net profit at the media giant rose to $604 million (€490.81m; £328.49m) in the fiscal third quarter to June 30, up year-on-year from $502 million. The earnings include a charge of $56 million in respect of the planned sale of its lossmaking North American retail stores.

Eisner displayed his customary public ebullience: "Strong results like we've seen this year do not happen by accident," he told analysts. He stood by his previous profit forecast for the fiscal year, saying earnings per share would increase by more than 50%. Analysts estimate a 58% uplift.

But despite the upbeat results, Eisner is unlikely to enjoy next weekend sipping a poolside Tequila Sunrise. More likely he will be eyeballing the Weinstein brothers across a conference table in downtown LA, bickering over an exit deal that could the see the latter walk away with a multimillion dollar payoff.

The Weinstein siblings are a valuable Disney property, having between them collected no fewer than fifty Academy Awards over the past twenty years -- the last eleven of which have been spent as a Disney subsidiary, having sold out for $75m in 1993.

But eleven years of accelerating clashes between heavyweight egos have taken their toll, and the brothers want out. But Eisner is expected to posit a deal in which Bob Weinstein remains at the helm of his successful Disney Dimension Films unit, while Harvey would be free to set-up a new company giving Disney first right of refusal to distribute its films.

But sources close to the Weinsteins predict an alternative scenario: a remake of the Disney blockbuster Priates of the Carribean, in which two bucaneering brothers rock a foundering galleon and decamp with a dinghy of doubloons.

Data sourced from: Reuters and Times Online (UK); additional content by WARC staff