AP NEWS

Group led by Penguins co-owner Ron Burkle to buy Weinstein studio in $500M deal

March 21, 2018 GMT

An investor group including Pittsburgh Penguins co-owner Ron Burkle has reached a $500 million deal to buy The Weinstein Co. and save it from entering bankruptcy, Variety reported.

The film studio’s financial condition spiraled after a New York Times report in October detailed decades of sexual misconduct against its co-founder and former co-chairman Harvey Weinstein. He was fired shortly after the story came out.

A group led by Burkle and Maria Contreras-Sweet, the former head of the U.S. Small Business Administration under President Obama, emerged as potential buyers. But negotiations appeared to fall apart Sunday when The Weinstein Co.’s board said it would seek bankruptcy protection because the would-be investors had not negotiated in good faith.

A deal came together Thursday in talks that included New York Attorney General Eric T. Schneiderman, who objected to earlier terms because he said they did not “ensure that victims will be compensated, employees will be protected going forward and that neither the perpetrators nor enablers will be unjustly enriched.”

On Thursday night, Schneiderman said in a statement that his office “received express commitments from the parties that the new company will create a real, well-funded victims compensation fund, implement HR policies that will protect all employees and will not unjustly reward bad actors.”

The victims fund will reportedly provide up to $90 million to sexual harassment victims.

Variety reported that the investors group would provide $275 million in equity, including $100 million as operating capital for the studio, and it would assume $225 million in debt.

Burkle reportedly invested $20 million in the Penguins when he and Mario Lemieux, along with dozens of minority owners, bought the franchise out of bankruptcy in 1999 for $107 million. Forbes estimated the hockey franchise’s value at $650 million in November. Burkle’s own net worth is estimated at $2 billion, according to Forbes.

Tom Fontaine is a Tribune-Review assistant news editor.