(FORTUNE Magazine) – Hollywood’s favorite obsession of late has been speculating about the future of the movie world’s odd couple: Harvey Weinstein and Michael Eisner. Everyone knows that the Miramax chief, like Pixar’s Steve Jobs, is unhappy with the constraints put on his studio by the Disney boss. But unlike Pixar, where negotiations are on hold, it looks as if Eisner and Weinstein could reach an agreement that makes Harvey a free man by October.
In preparation for that day, Miramax in mid-August trimmed its workforce by 15%. Says Miramax spokesperson Matthew Hiltzig: “The layoffs have nothing to do with any negotiations with Disney.” Ah, but they do. They lower overhead, making Miramax more attractive to outside investors–which Harvey will need whether he succeeds in buying back the Miramax name or he’s forced to start a new studio.
For those who haven’t followed every twist and turn of this drama, Miramax has been part of Walt Disney Co. since 1993, when co-founders Harvey and Bob Weinstein sold their art-house production firm for $75 million. Disney gave Miramax marketing muscle and as much as $700 million a year to make movies. Miramax gave Disney some 50 Oscars and, most recently, about $200 million in annual operating profits. The bulk of that came from Bob Weinstein’s unit, Dimension Films–which produces moderate-budget hits such as Spy Kids and Scary Movie.
The freewheeling Harvey, however, strayed from his low-budget roots, developing expensive box-office duds such as The Gangs of New York and Cold Mountain. “These films do not make money for Disney shareholders,” said David Miller, an analyst with Sanders Morris & Harris. Disney CEO Michael Eisner tried to rein in Harvey’s growing ambitions, while Harvey chafed under the control of Eisner and Disney’s fiscal managers.