Chapter 4 4. This is how the financial game is played

“How much?” Charlie Cooper widened his eyes, as if he didn’t hear clearly.

"Ten million, conservatively speaking!" Eric said word by word.

Ten million US dollars, especially in 2002, was enough to make two or three small-budget movies. Many directors and actors had never worked on a movie with an investment of ten million US dollars in their entire lives.

After a moment of silence, Charlie Cooper finally responded: "Son, what do you want to do?"

Eric didn't want to hide it from his father. After all, he was his blood relative, the closest person to him in the world. Besides, if he really wanted to acquire MGM, he would definitely need his father's help.

"Dad, since you want to enter the entertainment industry, what could be better than owning your own film company? After working for MGM for decades, don't you have any idea of ​​being independent?"

Charlie Cooper nodded slightly: "Every worker wants to become a boss, but this industry is very complicated. You can't succeed just by acting rashly. There are too many bankrupt companies in Hollywood every year."

"Son, I've been in this business for more than 30 years and have seen too many ups and downs. In this era, it's almost impossible to succeed in starting a film company on your own."

Eric shook his finger and said, "No, Dad, I don't want to start a company because that's too troublesome. You have to deal with a series of troubles such as production and distribution by yourself, and you have to build relationships all over again. What I want is to acquire a mature company, and what company is more suitable than MGM?"

The air froze for a moment, and Charlie Cooper reached out to touch his son's head to see if he had a fever.

"Dad, I'm sober!" Eric frowned.

Suddenly, Charlie Cooper burst into laughter, and the fat on his chin trembled. "Eric, you asked me to pay for the acquisition of MGM. Even God wouldn't dare to play such a joke. This is even more unreliable than starting a company by myself."

"Although MGM's development has not been very good in recent years, it still has several decades of history. It was once one of the eight major hotels. Do you know how much this history is worth?"

Eric picked up the remaining half of the pear and took a bite, his mouth full of juice. "Since being acquired by Kirk Kerkorian, MGM has been on a road of no return. According to my estimate, the debt should be between 1 billion and 1.1 billion US dollars."

"As for the assets, the studio plus the source library and various props, I estimate the value to be between 1.8 and 2 billion US dollars, is that correct?"

Charlie Cooper couldn't help but frown. As the CEO of MGM, although he had not carefully checked every account, especially since he had just finished filming "Windtalkers", it would definitely have a huge impact on the company's finances.

But when he heard his son's speculation, his heart still skipped a beat, because the company's internal financial statements for the first quarter were not much different from this number, and this kind of information was not something that ordinary investors could find.

As of the first quarter, MGM's assets were valued at $1.835 billion and its debts were $931 million.

Eric Cooper had no interest in movies before, and had no reason to care about the development of MGM. Naturally, he could not find any financial information of MGM in the hospital, but he could guess so accurately, it seemed that he really had a bear.

"Eric, even if what you said is correct, that's $3 billion, 300 times more. Tell me what you can do with $10 million?"

"I can do a lot. I will let money make money. Besides, if I really want to acquire MGM, it won't cost 3 billion. 1 billion will be enough."

"Oh? What do you want to do?"

"It's not difficult, in simple terms, it's just a loan with the future. The first step is to try to raise $1 billion, and then I need you to step in."

"You need to apply for loans from major banks. Given MGM's financial situation, you often deal with these banks, don't you? Dad, you should be familiar with this process."

"With your connections, we can start with $1 billion and use MGM's assets as collateral to borrow $2 billion from major banks. This way we will have $3 billion. I think the acquisition will not be a problem."

Eric's idea sounds weird. After all, MGM doesn't belong to you yet. Why should you use other people's assets as collateral?

But this is the financial game, and Charlie Cooper knew very well that the major banks had long been salivating over MGM, but had never found an opportunity to take a bite of this big cake.

And if someone really takes the lead and brings the opportunity to them, they will definitely be willing to lend even if there is only a 50% success rate. After all, banks never lose money.

If Eric really succeeds in swallowing up the elephant, the 2 billion loan will be a long process and the bank can receive huge interest. If Eric fails to manage MGM, the bank can eat this big cake.

Even if the acquisition is not successful in the end, the bank can still earn short-term interest, and with $1 billion as a guarantee, there is no need to worry about Eric defaulting on his debts.

Most people in the world can't beat the bank. Anyway, they can't lose money. So the key is where the $1 billion comes from? Charlie Cooper pondered for a moment, and his eyes became formal: "Eric, it seems that you have learned finance well, and you have made a perfect plan, but I have a question, where are you going to get $1 billion."

Eric smiled mysteriously, "Dad, this is what I'm going to consider. I promise you'll see results within a month."

He didn't dare tell his father that he made money from betting on football, as he would definitely think he was crazy.

And there are risks involved. Once the casino discovers any abnormality, it will inevitably be a big trouble. It is better not to involve my dad.

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The father and son sat on the hospital bed and talked for more than three hours, until late at night, when Charlie Cooper was finally convinced.

Of course, the most important thing is that their family can afford the $10 million, and Charlie Cooper has been in an executive position for so many years.

It is certainly not as good as those bigwigs on the Forbes list, but it is still much higher than the income of many celebrities.

Although he felt a little sad to give his son 10 million US dollars for training, he was his son after all. What's more, he was moved by the future scenes described by Eric.

Acquire MGM, become your own boss, take a gamble, isn’t life a gamble!

Two days later, Eric went through the discharge procedures accompanied by his mother. Dr. Charles still looked puzzled. Faced with such a thing that went against medical common sense, he could only attribute it to a miracle.

The car slowly drove into Beverly Hills. In this city within the city of Los Angeles, you can see stars on the big screen, world-famous basketball stars, world-renowned artists, and countless luxury stores.

The moment Eric pushed open the door, he heard a few bangs, and colorful ribbons fell from the sky and landed on him. A group of people rushed over and surrounded him.

“Welcome home!”

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(End of this chapter)