Miramax - a Victim Of An Interpersonal Confict

Miramax: A Victim of Interpersonal Conflict? Ref. No.: OB0009

Introduction

Miramax-The Early years

Born in 1952 in Flushing, New York, Harvey Weinstein (Harvey), the co-founder of Miramax Studios had been a part of the entertainment industry since his high-school years. He acted as the manager of a music band, Goosemen, started by his high-school friends. The band was a failure, butHarvey retained the basics of the music-promotion business he learnt during that stint. He joined the State University of New York at Buffalo in 1969. Within months, he teamed up with

This case study was written by Kalyani Vemuri under the direction of T Phani Madhav, IBSCDC. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffectivehandling of a management situation. The case was compiled from published sources. © 2009, IBSCDC.

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Background Reading: Chapter 15, “Conflict and Negotiation”, Organizational Behavior, Stephen P. Robbins, Timothy A. Judge and SeemaSanghi (12th edition)

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Disney and Miramax work on a contractual basis. The current contract between Disney and Miramax will expire in 2009, but an option gives Disney the right to renegotiate it in September 2005 and set the terms for the next four years. While Eisner wants Disney to have a greater control over Miramax’s operations and the Weinstein brothers to accept lessercompensation, Harvey and Bob have announced that they would not accept an unfair compromise. Talks of a breakup were getting louder, when Eisner unexpectedly announced in September 2004 that he would be stepping down as Disney’s CEO in 2006. That was seen to change the equation for the Weinsteins who announced that they would like to stick with Disney. Whether a mutually agreeable settlement could bereached between the two parties remains to be seen.

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Miramax Film corp., a division of Walt Disney (Disney) is headed by the Weinstein brothers, Harvey and Bob. Started by them in 1979 as a unit to buy and release foreign-language and independent films (indie-film), Miramax was acquired by Disney in 1993. Miramax built up a steady reputation as a pioneer of the indie-film genre, amassinga record 221 Oscar nominations in the past fifteen years. But relations between Harvey and Disney’s CEO Michael Eisner have been deteriorating steadily over the past few years over issues of compensation, control, accounting and creative independence. A flare-up between them in 2004 over the controversial documentary Fahrenheit 9/11 worsened the relations.

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Miramax: A Victim ofInterpersonal Conflict?

Miramax: A Victim of Interpersonal Conflict?

Corky Burger, a friend and started a music concert promotion company called Harvey & Corky Presents. The company was at the center of Buffalo’s rock music scene for the next three years, during which time Harvey dropped out of college and persuaded his brother Bob to do the same and join him in his business. In 1979, the brothers setup Miramax- named after their parents Miriam and Max. According to Harvey, he became a lover of cinema and was inspired to get into the movie business after watching The 400 Blows, an art movie by Francois Truffaut. Harvey decided to make a career out of promoting and marketing movies that were away from the mainstream genres, movies which otherwise would not get the attention he thought theydeserved. Miramax distributed its first movie, The Secret Policeman’s Other Ball, in 1982, but its first big success came in 1989 with Steven Soderbergh’s Sex, Lies and Videotape, an indie film that won the Palme d’Or at Cannes and grossed more than $100 million in worldwide sales. The movie brought Miramax and the Weinstein brothers into Hollywood’s notice as innovators of cinema. The brothers...