Weintraub Entertainment Group

Weintraub Entertainment Group, commonly abbreviated as WEG, was an American film and television production and distribution company established by producer and talent manager Jerry Weintraub on July 1, 1986. It was conceived as an independent studio with ambitions beyond those of a conventional production outfit. Contemporary plans positioned WEG as a “mini-major,” combining film financing, production, distribution, library ownership, and international operations. The company expected to release approximately seven or eight films annually and entered into a long-term distribution arrangement with Columbia Pictures. WEG attracted substantial financial backing during its launch. In February 1987, it obtained approximately $461 million in securities, bank financing, and advances from a group that included Columbia Pictures, Cineplex Odeon, the Coca-Cola Company, and the United States Tobacco Company. The company also arranged a seven-year, $145 million credit facility with Bank of America. This aggressive capitalization enabled WEG to pursue acquisitions and production commitments at a scale unusual for a newly formed independent studio, but it also left the company highly exposed to debt-market conditions and the performance of its film slate. The company expanded its production relationships in 1987 by signing a three-year agreement with Robert Stigwood’s RSO Films. The arrangement contemplated several films with budgets generally in the $12 million-to-$15 million range. One proposed project was a film adaptation of Evita, with Oliver Stone attached as writer-director and Meryl Streep considered for the role of Eva Perón. WEG ultimately abandoned that project. In May 1987, the company also acquired the approximately 2,000-title Thorn EMI Screen Entertainment film library from The Cannon Group for $85 million, using $50 million of borrowed funds. The acquisition gave WEG a major catalog asset but increased the financial burden that later became central to its difficulties. WEG’s first theatrical release was The Big Blue, released in 1988, although its opening performance was modest. The company followed with a mixture of original productions, co-productions, acquired films, and television programming. Its slate included Fresh Horses, My Stepmother Is an Alien, Listen to Me, She’s Out of Control, Troop Beverly Hills, and The Gods Must Be Crazy II. The Karen Carpenter Story was produced as a television film for CBS. Commercial results were uneven: several releases performed below their production or acquisition costs, contributing to pressure on the company’s financing structure. Management and corporate arrangements changed as WEG developed. Harry Usher joined in 1987 as president of the Weintraub International Enterprises division and a senior vice president, while television executive Barney Rosenzweig became chairman of the television unit in 1988. In July 1988, Bank of America terminated WEG’s original credit line after difficulties arose in syndicating portions of the loan to other banks, particularly in connection with the Thorn-EMI library financing. A replacement two-year, $95 million credit arrangement was later established with Credit Lyonnais participating. Usher left the company in January 1989. WEG’s position weakened further amid changes in the entertainment industry and its own debt obligations. In 1989, after Sony and Columbia Pictures recruited Peter Guber and Jon Peters from Warner Bros., Columbia exchanged its 15 percent interest in WEG. WEG filed for Chapter 11 bankruptcy protection in September 1990. Jerry Weintraub left the company later that month and entered into an arrangement with Warner Bros., while Columbia continued to have obligations associated with releasing WEG films. A dispute involving the sale of rights connected with the Peter Pan story led Film Asset Holding Co., a vehicle formed by two of WEG’s principal bank creditors, to sue Weintraub; the matter was settled in January 1992. After the company ceased operations, its assets were reorganized into WEG Acquisition Corp. The film assets subsequently came under Sony’s control, while television rights were controlled by Paramount Pictures and licensed to Trifecta Entertainment. WEG is therefore best understood as a failed independent mini-major experiment of the late 1980s: it assembled notable financing, library assets, production partnerships, and distribution plans, but its leverage, financing problems, and uneven release performance made the business unsustainable.

Weintraub Entertainment Group was founded by Jerry Weintraub on July 1, 1986, during a period when independent production companies were seeking access to the financing, distribution, and library resources traditionally controlled by the major Hollywood studios. Weintraub designed WEG as a broad-based entertainment enterprise rather than a single-project production company. Its plans included producing and distributing seven or eight films a year, acquiring established film libraries, developing television projects, and operating internationally. Columbia Pictures agreed to distribute WEG releases under a 20-year arrangement, giving the new company access to an established theatrical and commercial infrastructure. The company’s initial capitalization was unusually large. In February 1987, WEG received approximately $461 million through a combination of securities, bank loans, and advances. The Coca-Cola Company and United States Tobacco Company were identified as principal investors, while Columbia Pictures and Cineplex Odeon also participated. WEG separately arranged a seven-year, $145 million credit line with Bank of America. The scale of this financing allowed the company to move quickly, but the business consequently depended on reliable access to credit and strong performance across a large slate of films. In March 1987, WEG entered its first production and distribution agreement, a three-year deal with Robert Stigwood’s RSO Films. The proposed partnership covered films budgeted in the approximate range of $12 million to $15 million. Among the projects considered was Evita, planned with Oliver Stone as writer-director and Meryl Streep as Eva Perón. WEG eventually dropped the project. In May, it acquired the Thorn EMI Screen Entertainment library from The Cannon Group for $85 million, financing $50 million of the transaction through a loan. The library, containing roughly 2,000 titles, provided a potentially valuable long-term asset but increased the company’s debt exposure. WEG expanded its management team in 1987 and 1988. Harry Usher became president of the Weintraub International Enterprises division and a senior vice president in July 1987. Barney Rosenzweig was hired in January 1988 as chairman of the television unit, corporate vice president, and a member of the executive committee. The company’s first release, The Big Blue, arrived in August 1988 and had a reported opening weekend gross of $1.6 million. The first original production was Fresh Horses, released later in 1988. Other releases included My Stepmother Is an Alien, Listen to Me, She’s Out of Control, Troop Beverly Hills, and The Gods Must Be Crazy II. WEG also released The Karen Carpenter Story as a CBS television movie. The operating model encountered serious financial stress. In July 1988, Bank of America terminated its credit line after problems syndicating portions of the loan to other financial institutions, with the Thorn-EMI borrowing contributing to the difficulty. WEG and Bank of America later established a replacement two-year credit line of $95 million, with Credit Lyonnais participating. Usher left his position in January 1989. That year, Columbia exchanged its 15 percent interest in WEG following Sony/Columbia’s recruitment of Peter Guber and Jon Peters from Warner Bros. WEG’s release slate produced mixed results. Fresh Horses reportedly earned only about $7 million, while My Stepmother Is an Alien had a reported $26 million budget and approximately $13.8 million in theatrical gross. These results, combined with the company’s substantial financing commitments, weakened its ability to maintain an independent studio structure. WEG filed for Chapter 11 bankruptcy in September 1990. Weintraub left the company later that month and made a new arrangement with Warner Bros., although Columbia continued to have obligations relating to WEG releases. The company’s post-bankruptcy affairs generated additional litigation. Film Asset Holding Co., formed by two of WEG’s primary bank creditors, sued Weintraub over the structuring of a sale involving the Peter Pan story to Sony Pictures Entertainment in 1990. The dispute was settled in January 1992. In 1998, a jury verdict awarded $7 million to investors in litigation involving Bear Stearns and an $83 million bond issue prospectus for the bankrupt company. Following the shutdown, WEG’s assets were reorganized into WEG Acquisition Corp. The film assets were later held by Sony, while television rights were controlled by Paramount Pictures and licensed to Trifecta Entertainment.

• 1992

  Peter Pan litigation settled

  [1]Weintraub Entertainment Groupen.wikipedia.org

  Film Asset Holding Co. and Jerry Weintraub settled litigation relating to the structuring of a Peter Pan rights transaction.

• 1990

  Chapter 11 bankruptcy

  [1]Weintraub Entertainment Groupen.wikipedia.org

  WEG filed for Chapter 11 protection in September, marking the end of its independent studio operations.

• 1988

  First release and credit disruption

  [1]Weintraub Entertainment Groupen.wikipedia.org

  The Big Blue became WEG’s first release, while Bank of America terminated the company’s original credit line during financing difficulties.

• 1987

  Launch financing and distribution framework established

  [1]Weintraub Entertainment Groupen.wikipedia.org

  WEG received approximately $461 million in financing and arranged a $145 million Bank of America credit line while planning a long-term Columbia distribution relationship.

• 1987

  RSO Films agreement signed

  [1]Weintraub Entertainment Groupen.wikipedia.org

  WEG entered a three-year production and distribution agreement with Robert Stigwood’s RSO Films.

• 1987

  Thorn EMI film library acquired

  [1]Weintraub Entertainment Groupen.wikipedia.org

  WEG bought the approximately 2,000-title Thorn EMI Screen Entertainment library from The Cannon Group for $85 million.

• 1986

  Company founded

  [1]Weintraub Entertainment Groupen.wikipedia.org

  Jerry Weintraub formed Weintraub Entertainment Group on July 1 as an independent film and television enterprise.

An ambitious independent mini-major studio intended to finance, produce, acquire, and distribute feature films and television programming at a scale approaching that of established Hollywood studios.

• Feature film distribution · 1988

  The Big Blue

  The Big Blue was WEG’s first reported release, arriving in August 1988. The company handled distribution rights, and the film recorded a reported $1.6 million opening weekend. It established WEG’s theatrical presence but did not by itself demonstrate the scale of commercial performance needed to support the company’s heavily financed mini-major strategy.

• Original feature film · 1988

  Fresh Horses

  Fresh Horses was identified as WEG’s first original production. Its reported theatrical gross of approximately $7 million made it a weak commercial result relative to the ambitions and financing requirements of the company’s production program. The film formed part of WEG’s initial 1988 theatrical slate.

• Feature film · 1988

  My Stepmother Is an Alien

  My Stepmother Is an Alien was one of WEG’s late-1980s theatrical releases. Reference material reports a production budget of approximately $26 million and theatrical gross of about $13.8 million, illustrating the gap that could arise between production spending and box-office recovery within WEG’s slate.

• Television film · 1989

  The Karen Carpenter Story

  The Karen Carpenter Story was a television production released through CBS. It represented WEG’s effort to operate in television as well as theatrical film and was part of the company’s broader strategy to maintain a diversified production portfolio.

• Feature film · 1989

  Listen to Me

  Listen to Me was included among WEG’s 1989 feature-film releases. It formed part of the company’s effort to sustain a regular theatrical pipeline under its independent studio model.

• Feature film · 1989

  She’s Out of Control

  She’s Out of Control was one of WEG’s 1989 theatrical releases. The title illustrates the company’s use of commercially oriented feature projects alongside more specialized or acquired material.

• Feature film · 1989

  Troop Beverly Hills

  Troop Beverly Hills was released during WEG’s 1989 production period. It was part of the company’s broad theatrical slate before the financial pressures that led to its Chapter 11 filing became decisive.

• Feature film distribution · 1989

  The Gods Must Be Crazy II

  The Gods Must Be Crazy II appeared among WEG’s 1989 releases. The company’s involvement reflects its intended role as a distributor of both internally produced and externally sourced films.

• Film library · 1987

  Thorn EMI Screen Entertainment library

  The Thorn EMI Screen Entertainment library was a catalog asset containing approximately 2,000 British film titles. WEG acquired it from The Cannon Group in 1987. The purchase was strategically intended to provide recurring library value and intellectual-property depth, but its debt financing became associated with later credit and liquidity problems.

• 1990

  File for Chapter 11 protectionOther

  Background

  Uneven film performance, substantial debt, and deteriorating financing conditions undermined WEG’s independent studio model.

  Action taken

  WEG filed for Chapter 11 bankruptcy in September 1990, and Jerry Weintraub left the company later that month.

  Aftermath

  The company ceased operating as an independent studio, and its assets were reorganized into WEG Acquisition Corp.

  Source

• 1988

  Replace disrupted bank financingStrategy

  Background

  Bank of America terminated WEG’s original credit line after difficulties in syndicating parts of the financing.

  Action taken

  WEG and Bank of America established a new two-year credit line with Credit Lyonnais participating.

  Aftermath

  The replacement facility provided temporary financing support, but the company remained highly leveraged and later entered bankruptcy.

  Replacement credit line. $145 million seven-year facility → $95 million two-year facility (1989)

  Source

• 1987

  Adopt a mini-major studio modelStrategy

  Background

  WEG sought to compete with established studios by combining production, distribution, international activity, television, and film-library ownership.

  Action taken

  The company planned to release seven or eight films annually and secured Columbia Pictures as a long-term distributor.

  Aftermath

  The strategy required substantial financing and exposed WEG to the commercial performance of a sizable release slate.

  Launch financing. $461 million (February 1987)

  Source

• 1987

  Acquire the Thorn EMI Screen Entertainment libraryM&A

  Background

  WEG wanted a substantial catalog of established film assets to complement its new-production business.

  Action taken

  It purchased the approximately 2,000-title library from The Cannon Group.

  Aftermath

  The library expanded WEG’s asset base but added borrowing obligations and became part of the company’s later financial difficulties.

  Acquisition price. $85 million (May 1987)

  Source

1. 1Weintraub Entertainment Groupen.wikipedia.org