Disney Sells Miramax for Target Price

Walt Disney has sold Miramax Films to a private consortium, Filmyard Holdings, for $660m. The deal, agreed in July 2010, is expected to conclude in the final quarter the year and includes rights to more than 700 Miramax film titles. Reports suggest that Filmyard Holdings will seek to maximise the value of Miramax's existing library rather than financing future film productions. As part of the deal Disney will distribute yet-to-be-released Miramax films for up to a year after completion. Previous negotiations with Miramax founders Bob and Harvey Weinstein fell through in June, reportedly following doubts about the inclusion of some key properties uncovered during due diligence.

Analysis
Through this deal Disney has achieved the $660m price tag it originally placed on Miramax Films. The final figure after cash adjustments may be closer to $600m, but the deal clearly underlines the continuing importance of content catalogues to investors. In recent years the valuation of libraries had been falling as a result of aggressive promotion on DVD and uncertainty around the monetisation of digital channels. However, it seems that growth in the number of BD-enabled homes and the potential for 2D-to-3D conversion to breathe new life into high-profile film classics may have halted this decline.