Chapter 157 156. How to leverage 1 trillion?
"Eric, Anthony Ferrante still refuses to compromise and insists on a 5% share of the gross profit."
"Both me and Bema have talked to him several times, but it seems that the box office of The Purge and the invitations from outside have given him enough confidence. In short, his attitude is very tough."
"Even if his salary was raised to $700,000, it wouldn't be enough. Ferrante meant that the contracts offered to me by other companies all included dividends."
"As a veteran who helped expand the company's territory, he was not treated as well as outsiders. He was very dissatisfied and sad."
In the office, Warren reported on the recent progress of AK Film and Television.
Eric sneered, he had seen many wolves that were difficult to tame.
Some people just don’t understand that they should wear pants that fit the size of their butt, otherwise their crotch will fall off when they walk.
"It seems that he really thinks that the success of the movie is his own fault. Since we can't cooperate, don't try to cooperate with him. Just tell him to get out of here!"
Since Warren came to report this matter today, it means that the couple has given up on Anthony Ferrante.
He immediately nodded in agreement: "Bema and I agree with this, so let's start looking for a new director."
"Well, has anyone chosen yet?"
"Yes, it's Keenan Ivory Wayans, the director who was originally going to be invited to direct the first Sharknado movie. Just like you said, a director who can make Scary Movie will definitely be able to bring greater breakthroughs and creative ideas to Sharknado."
"Waynes? Didn't he look down on Sharknado?"
"People change. At the time, they looked down on it because no one thought such a bad movie could be a hit. Now, if you publicize the job posting, many people will rush to get in."
"In addition, excluding The Purge, the company shot a total of 15 films in the first half of the year. When it was busy, we had up to four crews working at the same time. Eric, I think AK Films is short-handed. 50 people are not enough."
Eric remembered that the original goal set for AK Films was to produce 20 knockoff films a year, but he didn't expect to complete three-quarters of the goal in just half a year.
However, it would be impossible to transfer more people from MGM over here. There will be more and more projects here, and the landlord will have no surplus food.
"If you don't have enough manpower, recruit externally. Please do it according to the actual needs and write me a report."
Warren took a sip of coffee and said, "Okay, then there's the question of profit. The total cost of making the 15 films is $12.37 million. Currently, 13 of them have been successfully sold, and the other two are being promoted."
"The gross profit is $34.99 million. After deducting filming costs, taxes and operating costs, the current net profit is $18.65 million."
"If these two films are sold, the net profit will definitely exceed 20 million US dollars."
Eric couldn't help but smile when he heard the figure of 20 million. A bunch of shoddy junk could actually bring him 20 million in profit in half a year.
Although it can't be compared with excellent movies, it has already made a lot of money.
Especially for MGM, which has to spend money in all aspects now, he wouldn't mind even a penny more.
At the end of the year, assuming the workload remains unchanged in the second half of the year, the net profit of about 40 million US dollars will be comparable to "Sharknado".
This money can be used to support the development and research of Facebook, YouTube and Lionheart.com, and it will be enough to last at least until the end of this year.
What's more important is that it is a guaranteed profit and there is absolutely no risk of losing money. There are so many good businesses like this in the world. No wonder other companies are also interested in going this way.
"Warren, you've been in this industry for almost a year now. How do you feel about running a company?"
Warren hesitated for a moment and said, "I feel like I have learned a lot. At least I understand the production process and promotion of a movie, and I also have some opinions on the market."
"I'm more mature, at least I'm not as flustered as when I first started. There's a process for everything."
Eric looked at him with a smile: "Maturity is a good thing. Maturity means that you can take on more responsibilities. Have you ever thought about taking on a bigger burden?"
"A bigger burden? Eric, what do you mean?" Warren's eyes slowly widened.
"I plan to set up another film and television company, which will still be independently operated. It will not be affiliated with MGM in name, but it will be the same as AK Films in reality."
"This company doesn't make copycat movies, but independent films. Its main focus is on niche themes or literary films such as religion, cult, gender identity, horror, etc. In short, the new company does what the big studios don't do."
"If you were asked to leave AK Films and manage this new company, would you have the confidence?"
When Warren heard that he was asked to manage a new company, it was like a bell ringing in his mind.
He is no longer the simple rookie he was a year ago, and can see and understand many things more clearly.
Especially after being with Pemahadi, the other party often passed on work experience to him.
Last time at the cinema, he and Pema met Eric and Nicole, and Pema Hadi was worried that Eric would be suspicious of their union.
Although Eric seemed magnanimous and did not express any hints, it more or less affected Warren's judgment.
Now suddenly a heavy burden or a tempting opportunity falls on one's head, and it would be a lie to say that one has no doubts at all.
Is Eric testing me? Is Eric going to split them up? Or does he really trust me? But with my qualifications and abilities, there are obviously more suitable candidates in the company. What's more, the benefits always fall on my head. What do Judy, Billy and Bordeaux who came out with me think? "What are you thinking about? Why don't you say anything?"
Eric asked, seeing Warren in a daze.
"Eric, even though I have a year of experience, I still feel that my abilities are insufficient. I am afraid that I will not be able to manage a company on my own now."
Taking a deep breath, Warren still rejected the big pie.
"What? You don't have confidence in yourself? In the company, I trust you four the most. But Billy is too jumpy and can't sit still. Maybe in a few years, when he becomes more stable, he can share more work."
"Judy can't move for now. I have other plans for her. Bordeaux's performance in the marketing department is not very outstanding. I need to change his position to tap his potential."
"I can see your work achievements this year. If you don't have the confidence to take over the new company, you can continue to stay at AK Films."
"But I still have to add more responsibilities to you. You have to carry AK on your own. I plan to transfer Pema to the new company. With her ability, she can easily support a new company on her own."
After Eric finished speaking, Warren's serious expression disappeared and he immediately smiled.
It seems that Eric is not suspicious of the couple, but really trusts them, otherwise he would definitely continue to test them and then let himself leave.
The two chatted for a while and asked Warren to tell Pema the news so that she could be mentally prepared in advance.
After seeing the fat man off, Eric leaned back on the sofa and thought about the new company, which must be established.
Why do all the big Hollywood studios have their own independent production and distribution companies? The reason is that business and independence are inherently contradictory.
If you want to make money, you have to lower the movie rating to G as much as possible, which means that everyone can watch it. This kind of movie will basically not contain swear words, blood, violence, abuse and other scenes.
G-rated movies are given the green light all over the world, even in the Middle East, without even having to be cut.
Independent films or art films are often all rated R, not to mention those in conservative countries in the Middle East.
Even in the United States, some films that were too extreme could not be shown and had to be released on videotape.
If a large film and television company produces and releases too many R-rated movies.
It is very likely that it will be blacklisted in some countries because of a taboo, such as blasphemy or lesbianism, and then be completely banned.
The consequence of being banned is that the G-rated movies produced by your company will not be able to be released in the country, and the consequences are unbearable for many film and television companies.
For example, Marvel's "Shang-Chi". Disney's arrogance caused all Marvel movies to be implicated and banned in China, and the relationship was not eased until a new president was appointed.
That’s why big companies need a branch as a fig leaf, even though everyone knows that you two are born of the same mother.
However, if the younger brother is banned, the older brother will generally not be affected. This is the main reason why many large companies set up independent branches.
In addition, Eric's new company is an independent operation, not a subsidiary, which is also to make it easier to control the company after it goes public.
You must know that after going public, the company will not belong to you alone. Even if you are the largest shareholder, your equity will be greatly diluted.
And as the group develops, the equity will be diluted less and less.
For example, in the Samsung Group, Lee Jae-yong actually only owns less than 2% of Samsung’s shares, but the huge Samsung Group is under his command. Why?
Because Lee Jae-yong is playing with nested shareholding, which is also the way many wealthy people control their companies.
For example, Company A has a market value of 1 trillion, and the largest shareholder of Company A is Company B, so whoever controls Company B can control Company A.
But the market value of Company B is 500 billion, which is still too high for ordinary people, so Company C came into being.
The latest novel is published first on Liu9shuba!
Company C is the largest shareholder of Company B, but its market value is only 100 billion, which is 10 times smaller.
But 100 billion is still too much, so we continue to nest and companies D, E, F, and G appear.
Until Company H, the largest shareholder of Company G, appeared, and the market value of Company H was only 1 billion.
One billion is something a rich man can afford, so he became the largest shareholder of Company H.
Finally, he can achieve control over large group company A by controlling company H, leveraging 1 trillion with less than 1 billion.
By the time MGM, Facebook, YouTube, and Lionheart go public in the future, their market capitalizations may have exceeded one trillion dollars in ten years.
If Eric wants to maintain control of these companies, he also needs to take this path.
Establishing some branches in advance to nest equity and building up camp step by step will prevent the enemy from taking advantage of any loopholes.
Time flies, and it is early July in a blink of an eye.
The Purge is in its final week of wide release, with fewer than 800 theaters showing it currently.
The last big overseas collection in Japan was also launched a few days ago.
Surprisingly, "The Purge" was well received in Japan, with a Yahoo Movies rating of 3.9, far higher than the 60 or 70 points in other countries.
Many comments are saying that the film was inspired by Battle Royale, but was shot in a very American style.
That’s great! The owner finally accepted my thoughts and ideas. I must support him!
This is a great gift from dad to his son!
Although it hasn't been released for a full week yet, it is expected to gross over 20 million US dollars without any problem.
Now "The Purge" has a North American box office of 93 million US dollars, an overseas box office of 37 million US dollars, and a global box office of 130 million US dollars.
MGM building, where House of Cards is auditioning.
Eric, Andrea, Julio, and two people from the audition company sat here.
Today is a comprehensive audition to select several important roles, but the most important one is the selection of the heroine Claire Underwood.
He has to be about the same age as Kevin Spacey and his acting skills must also be good enough.
Eric once wanted to invite Julianne Moore, and she met all the requirements.
Later I thought about it and decided to give up. It’s hard enough to get an Oscar-winning actor, and it might be even more troublesome to get another Oscar-winning actress.
Later, they simply held open auditions, and anyone who had the talent and wanted a role could come and have a go.
However, Eric heard that many actresses who were originally interested in the role backed off after knowing they would be acting opposite Kevin Spacey, and those who dared to appear today were all very talented.
"Thank you Hatcher."
As Teri Hatcher left, Andrea looked at Eric and said, "I think Hatcher can do the job both in terms of image and acting."
Eric shook his head slightly. "Let's wait and see. Her short hair style is too cold and fierce. She looks more like a killer than a politician."
"Next one!"
The door opened and another short-haired mature woman walked in. Like Teri Hatcher, she would become Felicity Huffman of Desperate Housewives.
After trying out a few looks and performing a scene, Hoffman walked out.
Everyone else looked at Eric.
"The acting is OK, but the look still doesn't match the image I had in mind, it's too soft. Hatcher is too murderous, she lacks that."
"Next one!"
The 15th short-haired mature woman came to the interviewer, Cynthia Nixon from Sex and the City.
He walked through the scene with ease and talked about his understanding of the character, which won everyone's approval, and the scope of candidates to be determined was expanded by one more.
Soon the audition lasted another hour, and as the 26th actress walked in, the person Eric was most looking forward to appeared.
Robin Wright from Forrest Gump, the 37-year-old Robin Wright and Kevin Spacey look a good match when standing together, but I don’t know how his acting is.
"Robin, what kind of person do you think Claire is?"
"She is independent, smart, calm and ambitious. She and her husband are more like partners than husband and wife."
Eric nodded. "Do you like watching the news? Do you follow politics?"
Robin Wright smiled and asked back: "Director, don't you know that Hollywood is the Democratic Party's stronghold?"
Everyone couldn't help but smile, this is indeed a long-standing tradition.
"Okay, you are very confident. I like confidence. Politicians are all confident. Let's try a play."
As Julio read the lines, Robin Wright instantly entered the role, and his entire style changed as his expression changed.
Five minutes later, after a short scene was over, she immediately switched gears, grinning and asking, "How was it? I practiced very hard at home."
Eric stood up and walked over, holding out his hand and saying, "Welcome to House of Cards!"
(End of this chapter)