Harvey Weinstein, Master Illusionist:
The deal also tied Miramax's capital budget for acquiring and producing films to its annual performance. So, the more money Miramax made in a fiscal year, the more money the Weinsteins made and the bigger the capital budget of their Miramax division. Disney further agreed to calculate Miramax's profits in a fiscal year solely on the films released that year. In making what seemed like a minor concession to Weinstein so that he could use his discretion in timing the marketing of art films, Disney did not foresee how brilliantly he would game this loophole. Through it, Weinstein was able to create the illusion of profits for Miramax and the reality of huge bonus payments for himself and his brother.
How did Harvey do this? He simply shifted potential money-losing films into future fiscal years so that they didn't reduce either his bonus or Miramax's capital budget.
4:42 PM
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