Weinstein Co. Restructures Genius Products Deal8 Jan, 2009 By: John Latchem
The restructuring of beleaguered Genius Products has begun.
GNPR Investments LLC, an affiliate of Quadrant Management, will acquire a 60% ownership stake in the company from affiliates of The Weinstein Co., which retains a 15% stake. Genius also has renegotiated its distribution agreement with The Weinstein Co.
“We’re happy to have Alan Quasha and his team at Quadrant on board and to be part of this company going forward,” said Bob Weinstein, co-chairman of The Weinstein Co. “Quadrant’s impeccable track record and leadership, along with their significant music catalog, film library and their new investment in video games that they are bringing to Genius equals a win for all parties involved.”
According to the announcement of planned changes, Genius will undergo a reorganization that includes changes to its cost structure and renegotiating existing agreements with vendors and content partners. In addition, Genius will consider a range of strategic and financial alternatives, including recapitalization, refinancing and going private.
As a result of the Quadrant acquisition, three Genius directors appointed by The Weinstein Co. resigned from the board, to be replaced by representatives of the new majority owner.
The Weinstein Co. remains the primary content partner for Genius Products, which will continue as the exclusive U.S. home video distributor for Weinstein feature films and direct-to-video releases. The Weinstein distribution agreement is in place through Dec. 31, 2010, with a mutual option for a one-year extension.
“This joint restructuring is another step of refocusing our company and will give Harvey [Weinstein] and me more time to concentrate on our movie slate,” Bob Weinstein said. “We look at this as an ongoing partnership and something that will grow in the future.”