Hollywood Hunter

Chapter 172 Debt-to-equity swap

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Simon returned from Cannes, and the media discussion and controversy over Pulp Fiction's Palme d'Or loomed large as the film approached its release, overshadowing Ronald Reagan's upcoming state visit to the Soviet Union at the end of the month.

Too much work has accumulated in the past two weeks, and Simon has no time to fully adjust the jet lag, so he quickly threw himself into the busy company affairs.

In addition to "Pulp Fiction", "Instinct", which is scheduled for July 15, has entered the final editing stage from the start of shooting in February. As an investor, screenwriter and the person most familiar with the project's selling point, Simon naturally wants to participate.

Fox, which distributes Instinct, has released the film's first TV trailer during Simon's participation in the Cannes Film Festival, and the film will be submitted to MPAA for ratings in early June.

During this time, Dustin Hoffman made some changes to the "Rain Man" script temporarily, and the filming cycle was inevitably extended again, which is expected to be completed by the end of June.

Simon heard the news at Cannes and could only hope that the project would not exceed the production budget of $25 million, and he also realized that Tom Cruise's in-house writing team would make all the films he starred in, no matter how good or bad the ending was. Where did the 'Tom Cruise movies' go wrong.

In addition to "Rain Man", the progress of projects such as "Scream", "Steel Magnolia" and "Dead Poets Society" seems to be much smoother. The selection of the actor of "Batman" has entered the third round, and Simon has also begun Get involved yourself.

Participating in dailies, production meetings and casting auditions for a slew of projects, Simon flew to New York again on May 30 to participate in NBC's "The Tonight Show with Johnny Carson" promoting Pulp Fiction. For the recording, Amy Pascal also traveled to the East Coast with Simon because of several reality shows.

At the same time, the competition for summer slots has also become fierce.

Paramount and Samsung unanimously chose to bring forward the release dates of Crocodile Dundee 2 and First Blood 3 due to the weak reputation and box office of Lucasfilm and MGM's joint special effects blockbuster "The Gathering" Wednesday, May 25th.

As the sequel to the box office runner-up after "Top Gun" in 1986, "Crocodile Dundee 2" finally had a screen size of 2,837. "First Blood 3" starring Sylvester Stallone also has 2,562 screens.

From May 20th to May 26th, the seven-day cumulative box office of "Fengyun Jihui" was 11.05 million US dollars, ranking first in the weekly box office rankings.

The second-placed "Crocodile Dundee 2" grossed $4.75 million in just two days.

The third place on the list, "First Blood 3", grossed $4.46 million 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 US dollars. In comparison, the production cost of "Crocodile Dundee 2", which earned $174 million at the box office for its first film in North America just two years ago, is still well under control at $14 million.

And, this summer is coming up with another movie with a seriously out-of-control budget, Who Framed Roger Rabbit.

Disney had prepared a $45 million budget for "Who Framed Roger Rabbit", which was a rare big production level in the 1980s, but Robert Zemeckis eventually pushed the project's production cost to $70 million Dollar.

Now Disney can't afford the failure of 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 been deeply rooted for this project. Frightened, several responsible persons all released air in advance, secretly and secretly, to help themselves shirk their responsibilities.

"Who Framed Roger Rabbit" has a June 24 release date, not to mention.

Squeezed by three new films, "When Harry Met Sally", which has a very bright box office curve, fell by 33% this week, far exceeding the weekly decline of only 12% since its release.

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

Arriving in New York to record The Tonight Show with Johnny Carson, Simon also had to juggle the Westeros Company business.

Jennifer's father, James Leibold, has already secured the loan, Westeros' investment in Cisco and several other companies, as well as some important affairs in many technology companies in which the company has a stake, and many related contract documents and memoranda. And so on, Simon will need to negotiate with James Raybould in person to review and sign.

the other side.

Negotiations between Amy and the network continue.

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

TV 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. The TV network buys the ideas and invests and owns the copyright. Even if it is outsourced, the production company in charge of the program often only earns a simple labor fee. If the program ratings are high, they may get an additional bonus, but that's it.

Simon would not accept this condition anyway.

"Who Will Be a Millionaire" and "Surviving

In the original time and space, a phenomenon-level reality show such as "The Man" was enough to prop up the ratings of a TV network. In my memory, only the annual advertising revenue can bring a net profit of hundreds of millions of dollars to the TV network. Vibration is immeasurable.

Moreover, once this kind of reality show is successful, the licensing fee for overseas production in the future will also be a very considerable income. Just like "Who Will Be a Millionaire", this reality show has remakes in dozens of countries around the world at its peak, all of which have to pay royalties.

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 bring revenue will also have nothing to do with the company.

On the Upper East Side, the Rayboulds' apartment.

The time is already June 1. Last night, "The Tonight Show with Johnny Carson" broadcasted a special interview with the main creator of "Pulp Fiction", and the film was one step closer to its release. All the pre-publicity and marketing work has been completed, and the next step is to see the market performance of this movie.

Tonight is a dinner invitation from the Raybold family. In addition to Simon and Amy, the Rayburd family friends Robert Iger and his wife also came together.

After this period of tug-of-war, Daenerys Pictures finally reached a first-ever contract with abc for Who Will Be a Millionaire yesterday.

The abc network will acquire the North American rights to Who Will Be a Millionaire, and Daenerys Pictures will retain the rights to the project outside of North America and will be solely responsible for the production of the show. Under the terms of the contract, the abc network cannot get rid of Daenerys Pictures to produce the show alone, and Daenerys Pictures will not be able to transfer the show to other TV networks in the United States.

It can be said that this is a contract that neither side can kick out of the other.

In addition, the production budget and competition bonus of the project are borne by Daenerys Pictures, and abc pays the subscription fee for each season according to the audience. Daenerys Pictures will then pre-produce a week-long pilot to test the show, and it will air the following week starting June 20.

If the program meets the viewing standards, the two parties will negotiate the subscription price for the first season.

This year's fall season has been severely affected by the writers' strike. Once the pilot of "Who Will Be a Millionaire" passes, abc plans to order 69 episodes at one time and broadcast 3 episodes a week, just to fill the network's traditional fall to spring 23 cycle period.

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

However, even at a cost of $300,000 per episode, the cumulative production cost of the 69 episodes of the entire season will exceed $20 million, which is obviously a lot of money.

The break-even line given by abc is 10 million viewers for the fall season.

The audience size is less than 10 million, and the subscription price that abc can provide will also be less than 20 million US dollars. Daenerys Pictures will have to rely on self-raised in-show sponsorships to cover the production budget within the ratings that the network can tolerate.

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

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

In the restaurant, everyone was enjoying the food, and they naturally discussed these reality shows.

Robert Iger happened to be arranged 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 made for one season at a time, can't schedule pilot episodes, and can't get it right away with poor ratings Cut it off. So, I think it's best to schedule it to be broadcast in the summer season. If it succeeds, it can be moved to the autumn season, and if it fails, it will not affect the network too much."

Simon nodded in approval, and shook his head again: "Unfortunately, Bob, although we have done a lot of preparatory work, it must be too late."

Many popular reality shows in my memory are actually put on the summer schedule for trial broadcast, and then readjusted to the popular schedule after success. It's easy for Robert Iger to see that reality TV shows aren't taking off right now, and it certainly shows the network executive's keen professional sense.

"Actually, now is just an opportunity. This year, everyone has no programs to broadcast, so they can only take risks." Robert Iger continued with a smile: "So, Simon, if you can make some concessions on the terms of cooperation. , I can call Daniel right now to get this done."

Now that "Who Will Be a Millionaire" has signed, Simon is less eager for the other three reality shows. As long as next month's pilot episode is successful, there will be no shortage of buyers for these projects, and Daenerys Pictures will be able to gain more initiative.

Of course, if it fails, there is nothing you can do.

"Bob, the terms of cooperation for "Survivor" that I can accept are similar to "Who Will Be a Millionaire". This is a win-win cooperation plan. I don't think I have any room to back down," Simon shook his head and refused. Then he said, "Speaking of which, Bob

, if the TV business of Daenerys Pictures is going well next, are you willing to jump in and help me? "

Simon had only made some probes through James Leibold before, and at this time, he raised it in front of everyone, and everyone in the restaurant looked at Robert Iger.

Robert Iger was also a little surprised, but he said quickly: "Simon, if there is a better career development platform, I'd be happy to change jobs. But I can't see this kind of work in Daenerys Films yet. potential."

Simon smiled: "Can I take this as a promise?"

"You're an amazing young man, and I'm curious about what's going to happen working for you. So, why not," Robert Iger shrugged and asked Simon again in the unexpected eyes of everyone: "I remember You tried to acquire New World Entertainment at the beginning of the year?"

After getting an unexpected reply from Robert Iger, Simon didn't 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," said Robert Iger. "It's a pity that the pace of expansion is too large, and they have encountered stock market disasters and strikes in succession. They are destined to be unable to escape this disaster."

Simon nodded, looked at James Raybold, and asked, "Jim, what's the recent stock price of New World Entertainment?"

James Raybold thought for a while and said: "It's not clear in recent days. At the close of last Friday, it was $8.50, 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 US dollars, and then Simon made a gesture of giving up completely. Coupled with financial deterioration and strikes, the stock price of New World Entertainment has been hit in the past few months. back to a low state.

After James Leibold finished speaking, he glanced at Simon meaningfully.

During this time, according to Simon's orders, Westeros Company secretly bought 1.23 million shares of New World Entertainment again, still stuck below the public filing line of 5% shareholding. The Westeros Company can continue to buy from the open market in a big way as long as it needs to.

There's no need to be so candid with Robert Iger.

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

Simon hadn't reacted yet, but James Leibold subconsciously said, "Good idea, I should have thought of it long ago."

Everyone looked at James Raybold for unknown reasons.

Aware of his gaffe, James Raybold 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 will definitely have to take on a huge debt that is almost equal to the market value of New World Entertainment. However, if we can buy the creditor's rights in General Electric's hands, and then put pressure on New World Entertainment to carry out a debt-for-equity swap operation. According to the scale of the debt in General Electric's hands, we will You can get at least 90% of New World Entertainment shares, and you can save half of the fees."

Simon quickly understood after listening to James Raybold's explanation.

Of course, in doing so, retail investors in the circulation market, and even Westeros itself, which secretly holds shares, will undoubtedly become the biggest victim. A debt-to-equity swap ratio of 90% is equivalent to a 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 ends up going bankrupt, the stock in the hands of shareholders will also become worthless. Investments are all risky, but Simon did not sacrifice my dedication to helping thousands of families, and quickly made up his mind.

After dinner, it was already ten o'clock in the evening when they left the Rayburd's house. Simon and Rayburd agreed to go to the company tomorrow morning to talk about New World Entertainment in detail, and took the initiative to open the car door and let Amy Pascal into the car.

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

Neil Bennett in the front row started the car, Simon and Amy chatted casually, and suddenly remembered something, saying: "Amy, from tomorrow, stop negotiating with nbc about our reality shows. "

Amy Pascal was a little puzzled: "Huh?"

Simon thought for a while, and said, "Stop everything, not just nbc, but also other companies, you can go back to Los Angeles tomorrow."

Amy Pascal felt like she understood something, but failed to sort out the joints. However, she also gradually got used to not getting to the bottom of Simon's decision, and just said, "What about the preparatory work?"

Simon said: "Of course this has to continue."

According to the current state of New World Entertainment's shaky state, Westeros' purchase of GE's debt can definitely help the other party avoid a huge loss. However, compared to a behemoth like General Electric, Simon's strength is still too weak. Who knows if General Electric will have other thoughts.

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

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

Take Amy to the hotel and Simon rushes back to the top-floor building on Lexington Avenue.

apartment.

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

Simon took off his shoes and walked through the entrance. Catherine on the sofa was sitting sideways towards the door, wearing a slim light blue wide plaid shirt and crisp white slacks, and was looking down at a magazine.

She quietly turned behind the woman, and it was not until Simon leaned over that Catherine found him coming back. She shyly turned her head slightly and let the man kiss her on her cheek, and then rubbed her neck again, before whispering, "Drinking? "

Simon sniffed the good scent on the woman's body and said, "Just some red wine."

Catherine felt Simon's two hands coming from behind him, dropped the magazine in his hand and stretched out to hold him, with a slight trembling in his tone: "I, I just made coffee."

Simon just responded: "Well."

Those two hands were still rambling, seeming to be very interested in the buttons of her shirt, and even tore off one. Damn, what about the new clothes. I knew for a long time that I couldn't stop this powerful little bastard, but I couldn't stop it, but I continued to express my attitude.

I am reluctant.

Weakly let him grind and fiddle for a while, feeling that her body was being hugged... Well, when she picked it up, it turned out to be like a robber, and she was very dissatisfied and hammered him a few times.

little bastard.

How can this be!

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