Hollywood Hunter

Chapter 172: Debt-to-equity swap

Simon returned from Cannes, and media discussions and controversies about the Palme d'Or for "Pulp Fiction" became more and more raging as the film approached its release. The limelight even overshadowed Ronald Reagan's upcoming state visit to the Soviet Union at the end of the month.

Over the past two weeks after leaving, Simon had accumulated too much work, and Simon had no time to adjust the time difference completely, so he quickly devoted himself to busy company affairs.

In addition to "Pulp Fiction", the filming of "Instinct", which was set for July 15th, has been in the final stage since the shooting started in February. As the investor, screenwriter, and the person most familiar with the selling point of this project, Simon naturally wants participate.

Fox Pictures, which is responsible for the distribution of "Instinct", has already released the first TV trailer of the film during Simon's participation in the Cannes Film Festival. The film will be submitted to the MPAA for rating in early June.

During this period, Dustin Hoffman made some changes to the "Rain Man" script on a temporary basis. The filming cycle of the film was inevitably extended again, and it is expected to be completed by the end of June.

When Simon heard the news in Cannes, he could only expect that the project would not exceed the production budget of 25 million US dollars. He also realized that Tom Cruise’s self-provided screenwriting team would make all the films he starred in regardless of the ending. Where did the ills of "Tom Cruise Movie" come from?

In addition to "Rain Man", projects such as "Screaming", "Steel Magnolia" and "Death Poetry Society" have been progressing smoothly. The selection of the actor of "Batman" has entered the third round, and Simon has also begun. Participate personally.

I participated in a lot of project sample observations, production conferences and casting auditions. On May 30th, Simon flew to New York again to participate in NBC "Johnny Carson Tonight Show" which promoted "Pulp Fiction" Recording, because of several reality shows, Amy Pascal also rushed to the east coast with Simon.

At the same time, competition in the summer vacation has also become fierce.

Due to the weak word-of-mouth and box office of the special effects blockbuster jointly produced by Lucasfilm and MGM, Paramount and Samsung unanimously chose to advance the release schedule of "Grocery Dundee 2" and "First Blood 3" Schedule to Wednesday, May 25.

As the box office runner-up sequel second only to "Rising Clouds" in 1986, the final screen size of "Crocodile Dundee 2" reached 2,837 yuan. "First Blood 3" starring Silverster Stallone also reached 2,562 screens.

During the week from May 20 to May 26, the seven-day box office of "Fair and Cloud Meeting" was 11.05 million U.S. dollars, ranking first in the weekly box office rankings.

The second-ranked "Crocodile Dundee 2" reached $4.75 million in the box office within two days of its opening.

The third place on the list, "First Blood 3", has a box office of 4.46 million US dollars in two days.

It is worth mentioning that the production budget of "First Blood 3" completely reached the out-of-control level of $63 million. In contrast, two years ago, the production cost of "Crocodile Dundee 2", which only earned US$174 million in the box office in North America, is still well controlled at US$14 million.

Moreover, this summer file is followed by another movie whose budget is seriously out of control, "Who Framed Roger Rabbit".

Disney originally prepared a $45 million budget for "Who Framed Roger Rabbit", which was a rare major production level in the 1980s, but Robert Zemigis eventually pushed the production cost of this project to 70 million. Dollar.

Disney can’t afford to fail a project with a budget of $70 million. Although Simon knows that the final box office data of "Who Framed Roger Rabbit" is very good, during this time, Disney has already become popular because of this project. In panic, several persons in charge all let themselves out in advance and help them shirk their responsibilities in the dark.

The release date of "Who Framed Roger Rabbit" is June 24, so I won't mention it for now.

Squeezed by three new films, the box office curve of "When Harry Meets Sally" has been very eye-catching this week's box office drop reached 33%, far exceeding the one-week drop of only 10 to 20% since its release.

In the 11th week of the release, "When Harry Met Sally" received another 4.11 million US dollars, with a cumulative box office of 94.23 million US dollars, one step closer to breaking 100 million.

While arriving in New York to record "The Johnny Carson Tonight Show", Simon also needed to take care of Westeros' business.

Jennifer’s father James Leibald has already settled the loan during this time, Westeros’ investment in Cisco and other companies, as well as some important matters of many technology companies in which the company’s shares are held, and many related contract documents and memos. And so on, Simon needs to discuss and sign with James Rebold in person.

The other side.

Negotiations between Amy and the television network continue.

The four major TV networks have expressed interest in the four reality show plans proposed by Daenerys Pictures, but because Daenerys Pictures wants to gain the initiative as much as possible in order to share more profits later, things are not progressing. It's too smooth.

Television networks generally classify these reality shows as traditional variety shows. This type of show is usually created by production companies or producers in the industry, and television networks buy the ideas and invest in them and own the copyright. Even if it is outsourcing, the production company responsible for the program often only earns a simple labor fee. If the program ratings are high, it may get an extra bonus, nothing more.

Simon would not accept this condition anyway.

"Who Will Be a Millionaire" and "Survivor" are phenomenal reality shows that can support a TV network's ratings in the original time and space. In memory, only the annual advertising revenue can bring hundreds of millions of dollars to the TV network. Profits, the role of programs in boosting the ratings of the entire TV network is immeasurable.

Moreover, once this kind of reality show is successful, future overseas production licensing fees will also be a very substantial income. Just like "Who Will Be a Millionaire", this reality show had its reproduced version in dozens of countries around the world at its peak, all of which were subject to copyright fees.

If the copyright is handed over to the TV network, the profits that Daenerys Pictures can share in the future will definitely shrink significantly, and the overseas licensing fees that can continue to generate revenue will also have nothing to do with the company.

Upper East Side, Reybled's apartment.

It was already June 1st. Last night, "Johnny Carson Tonight Show" aired a special interview with the main creator of "Pulp Fiction", and the film was further away from release. All the pre-promotion and marketing work has been completed, the next step is to see the market performance of this movie.

Tonight is the dinner invitation of the Rebald family. In addition to Simon and Amy, the friends of the Rebald family, Robert Iger and his wife, also arrived.

After this period of seesaw, Daenerys Pictures finally reached the first contract with ABC on "Who Will Be a Millionaire" yesterday.

ABC Television Network will obtain the North American copyright of "Who Will Be a Millionaire". Daenerys Pictures retains the copyright of the project outside North America and is solely responsible for the production of this program. According to the terms of the contract, ABC TV network cannot get rid of Daenerys Films’ independent production of this program, and it is also impossible for Daenerys Films to transfer this program to other TV networks in the United States.

It can be said that this is a contract in which neither party can kick anyone off.

In addition, the project production budget and competition bonuses are borne by Daenerys Pictures, and ABC pays for the subscription fees for each season based on the ratings. Daenerys Pictures will next pre-produce a one-week trial broadcast to test the effect of the program, and it will be broadcast in the following week starting on June 20.

If the program reaches the ratings standard, the two parties will negotiate the subscription price for the first season.

This year’s autumn file has been severely affected by the screenwriter’s strike. Once the trial broadcast of "Who Will Be a Millionaire" is passed, ABC plans to subscribe to 69 episodes of the program at a time, and broadcast 3 episodes a week, just to fill the TV network’s traditional autumn to spring 23. Weekly schedule.

As an indoor reality show, the production budget for each issue of "Who Will Be a Millionaire" is actually not high. The basic venue recording costs only about 200,000 US dollars, and the 1 million US dollars bonus is not so good. Taken, the average total bonus payout of $100,000 per period is more than enough.

However, even if calculated on the basis of 300,000 US dollars per issue, the cumulative production costs of 69 episodes of the entire season will exceed 20 million US dollars, which is obviously a high cost.

The break-even line given by ABC is 10 million viewers in the autumn file.

The audience size is less than 10 million, and the program subscription price that ABC can provide will also be less than 20 million US dollars. Within the tolerable viewing range of the TV network, Daenerys Pictures wants to keep this program, and can only rely on self-raised in-program sponsorship to cover the production budget.

In this era when cable TV has not yet become popular, the threshold of 10 million viewers is not low, but it is definitely not high. This also shows that ABC does not have much expectations for "Who Will Be a Millionaire".

In addition, because the trial broadcast time is the most unpopular summer time for TV networks, the ABC's standard for the viewership of the trial episode is 6.5 million.

In the restaurant, everyone was enjoying the food, and it was natural to discuss these reality shows.

Robert Iger happened to be placed opposite Simon and talked about "Who Will Be a Millionaire". The ABC executive turned the topic to "Survivor": "Simon, actually I think "Survivor" More interesting than "Who Will Be a Millionaire". However, this show is too risky, because of the continuity of the plot, it has to be produced for one season at a time, it is impossible to arrange a pilot episode, and it can't be immediate if the ratings are not good. Cut it off. So, I think it’s best to schedule it to be played in the summer time. If it succeeds, it can go to the autumn time. If it fails, it won’t have much impact on the TV network."

Simon nodded in recognition, then shook his head: "It's a pity, Bob, although we have done a lot of preparatory work, it must be too late in time."

Many of the popular reality shows in my memory are actually put on the summer file for trial broadcasts, and then readjusted to the popular schedule after success. Now that reality shows have not yet emerged, Robert Iger can easily see this, which undoubtedly shows the keen professional sense of this TV network executive.

"Actually, now it happens to be an opportunity. Everyone has no programs to broadcast this year. They can only take risks." Robert Iger smiled and continued: "So, Simon, if you can make a little concession in terms of cooperation. , I can call Daniel now to finalize the matter."

Now that "Who Will Be A Millionaire" has been signed, Simon is no longer so eager for the other three reality shows. As long as the pilot episode next month can be successful, these projects will naturally have no shortage of buyers, and Daenerys Pictures will also be able to gain more initiative.

Of course, if it fails, there is no alternative.

"Bob, the conditions of cooperation I can accept for "Survivor" are similar to those of "Who Will Be a Millionaire". This is a win-win cooperation plan. I don't think I have room for concession," Simon shook his head and refused. Then he said, "Speaking of which, Bob, if Daenerys Pictures' TV business develops well in the future, would you like to jump over to help me?"

Simon had only conducted some trials through James Rebald before, and at this time he brought it up in front of everyone, and everyone in the restaurant looked at Robert Iger.

Robert Iger was also a little surprised, but he quickly said: "Simon, if there is a better career development platform, I would be happy to change a job. But I still can’t see Daenerys Pictures’ potential."

Simon smiled and said, "Can I take this as a promise?"

"You are a very amazing young man, and I am also very curious about what happens when working for you. So, why not," Robert Iger shrugged, and asked Simon in the unexpected eyes of everyone: "I remember You tried to acquire New World Entertainment at the beginning of the year?"

Unexpectedly, I got a reply from Robert Iger. Simon did not hide the matter and said: "Yes, I still haven't given up this effort."

"New World Entertainment's strength in the field of TV program production is still very strong," Robert Iger commented: "It's a pity that the pace of expansion is too great, and they have encountered stock market crashes and strikes continuously. They are destined to not escape this disaster."

Simon nodded, looked at James Rebold, and asked, "Jim, what is the recent share price of New World Entertainment?"

James Rebold thought for a moment and said: "It's not clear in the last few days. At the close of the market last Friday, it was $8.5 and the total market value was about $210 million."

When trying to acquire New World Entertainment at the beginning of the year, the company’s stock price once soared to nearly $17, and then Simon made a gesture of giving up completely. Coupled with financial deterioration and strikes, New World Entertainment’s share price has been in the past few months. It fell back to a low state.

After James Rebold finished speaking, don't give Simon a meaningful glance.

During this period of time, according to Simon's orders, Westeros secretly bought 1.23 million shares of New World Entertainment, which was still stuck below the public reporting line of 5% shareholding. As long as necessary, Westeros can continue to absorb from the open market at any time.

There is no need to be so frank with Robert Iger on this point.

Robert Iger didn't seem to think much, but said: "Simon, if you want to get New World Entertainment, maybe you can contact General Electric."

Simon hasn't reacted yet, but James Rebald subconsciously said: "Good idea, I should have thought of it."

Everyone looked at James Rebald for unknown reasons.

Realizing his gaffe, James Rebold smiled awkwardly and said to Simon: "General Electric is the main creditor of New World Entertainment, Simon, this company is now insolvent. If we make a public acquisition, in the future, We must also bear huge debts almost equal to the market value of New World Entertainment. However, if we can buy the claims in GE’s hands, and then put pressure on New World Entertainment for debt-to-equity swap operations. According to the scale of claims in GE’s hands, we At least 90% of the shares of New World Entertainment can be obtained, and half of the cost can be saved."

Simon quickly understood James Rebold's explanation.

Of course, if you do this, retail investors in the circulation market, and even Westeros, which secretly holds shares, will undoubtedly become the biggest victims. The 90% debt-to-equity swap ratio is equivalent to the direct depreciation of the stock in the hands of the original shareholders to one-tenth of the original stock price.

but.

If New World Entertainment eventually goes bankrupt and liquidates, the stocks in the hands of shareholders will also become worthless. Investment is risky. Simon did not sacrifice my dedication to make millions of families. He quickly made up his mind.

After dinner, it was ten o'clock in the evening to leave Rebold’s house. Simon and Rebold agreed to go to the company tomorrow morning to discuss New World Entertainment in detail. They took the initiative to open the door and let Amy Pascal into the car.

Simon wants to return to his apartment on Lexington Avenue in Midtown, and sends Amy back to her hotel.

Neil Bennett in the front row started the car, Simon and Amy chatted casually, and suddenly remembered one thing, saying: "Amy, starting tomorrow, we will stop talking to NBC about our reality shows. "

Amy Pascal was a little confused: "Huh?"

Simon thought for a while and said, "Stop it all, not just NBC, don't contact the others, you can go back to Los Angeles tomorrow."

Amy Pascal felt that she understood something, but could not completely sort out the joints. However, she also gradually got used to not getting to the bottom of Simon's decision, just saying: "What about the preparatory work?"

Simon said: "Of course this must continue."

According to New World Entertainment’s current shaky state, Westeros’ purchase of the claims in GE’s hands can definitely help the other party avoid a large loss. However, compared to a behemoth like General Electric, Simon's strength is still too weak, who knows whether General Electric will have other thoughts.

"Who Will Be a Millionaire" will be piloted next month. If this reality show can be as successful as the original time and space, the other three reality show projects in the hands of Daenerys Pictures will also become Simon's bargaining chips.

General Electric is the parent company of NBC Television Network. The original intention of this carrier-level corporate giant to invest in New World Entertainment is to provide NBC with more content resources. At that time, Simon can completely rely on his reality show project with great potential in exchange for General Electric to cooperate with Westeros' debt-to-equity swap plan.

Send Amy to the hotel, and Simon rushes back to the penthouse on Lexington Avenue.

Open the door, the living room is quiet, but the lights are on.

Simon took off his shoes and walked through the hallway. Catherine on the sofa sat sideways to the door, wearing a slim light blue wide checkered shirt and stiff white slacks, looking down and focusing on a magazine.

Turning quietly behind the woman, Catherine didn't find him back until Simon leaned down. She turned her head a little shamely and let the man kiss her on her cheek, then rubbed her neck, before whispering, "Drinking? "

Simon sniffed the nice scent of the woman and said, "It's just some red wine."

Catherine felt Simon's hands touching him from behind, throwing away the magazine in her hand and reaching out to hold him, with a slight tremor in her tone: "I, I just made coffee."

Simon just responded: "Yeah."

Those two hands were still behaving, seemingly interested in the buttons on her shirt, and they even tore off one. Damn it, the new clothes are. I knew I couldn't stop this strong little bastard, but I couldn't stop it, but he continued to express his attitude.

I am reluctant.

Weakly let him fiddle with him for a while, feeling that she was being hugged...Well, when she carried it up, she was like a robber, and she was very dissatisfied with hammering him a few times.

little bastard.

How can this be!

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