Exploiting Hollywood 1980.

Chapter 1462 Paramount Supermarket Opens
"Viacom is acquiring New York entertainment company Paramount for more than $100 billion in cash and stock, or about $80.61 per share. Paramount's assets include Paramount Pictures, Simon & Schuster Publishers, Madison Square Garden, the New York Rangers hockey team and the New York Knicks basketball team.

It is reported that although the accountants are still counting the votes, several anonymous shareholders have revealed to this newspaper at 50.1 o'clock last night that Viacom's acquisition of % of the shares is a foregone conclusion. We were unable to find Viacom's chairman Redstone to confirm this news.

Barry Diller, chairman of QVC, another company participating in the merger competition, is said to have flown to New York last night to make a final bid, but he said he would not increase his bid.

Both the New York Times and the Los Angeles Times reported the latest results of the Paramount acquisition battle in prominent pages.

What Ronald didn't know was that Barry Diller of QVC was restricted in his bid by the terms of the contract that allowed several telecommunications companies, including BellSouth, to take stakes in his company. So he had no choice but to go to New York for this acquisition and his final resistance was to stand down.

But Redstone also had control over these things. After signing a contract for about 50% of Paramount shareholders to transfer their shares to him, he gave those shareholders who had originally invested in QVC three days to resell their shares to him.

By the time the market opened on Monday, he would have approximately 60% control, and Barry Diller would be completely out.

"Ronald, when Mr. Redstone comes back from New York, I can try to ask him to take time to meet with us. He has high expectations for Paramount Pictures. I think you and Tom Cruise will be our two biggest box office guarantees. Forrest Gump will also be released after the acquisition. We can ask him to watch it once."

Shirley Lansing called over the weekend. Redstone was going to New York to formally exercise the rights of the winner and confirm all the shares. Then he would meet with his former friend Barry Diller...

If the winner of a war does not enjoy the loser's face-to-face admission of defeat and congratulations, it means that he has not truly won the war.

"No, I'm on a plane to New York. I'm also going to New York for business..."

"That's perfect. Mr. Redstone will go to the restaurant to celebrate his wife's birthday. If you are free, you can arrange a meeting." Shirley Lansing really wanted to flatter Redstone as soon as possible when he took over Paramount Communications.

"Haha, Shirley, I appreciate your sense of humor. I have friends to have dinner with myself. Besides, Mr. Redstone may not want to see me..."

"Hey?"

Shirley Lansing listened to the busy tone in the microphone and suddenly felt an inexplicable feeling in her heart, as if she had also experienced this kind of pressure from facing a superior when she was communicating with Lei Shidong.

……

"How is the result?"

As soon as Ronald arrived at the New York airport in the morning, he took a car directly to Bannon's war room. The traders there had already closed all the contracts and left with a generous check. They would be sent to Hawaii, Tokyo, Europe and other places for a long vacation, hiding from the limelight for a while, and then coming back after things calmed down.

Bannon didn't say anything. He wrote the number 300 on the whiteboard in his office, followed by a comma and six zeros after the comma.

"Great, what do you want to use it for?"

Ronald's 100 million yuan capital needed to be kept secret, so after breaking it down, he bought a lot of short-selling contracts through different accounts. After taking profits, he continued to short-sell.

Viacom first acquired Blockbuster and then acquired Paramount, two loss-making transactions with a market value of billions. Its stock price has fallen from US$59 before the announcement of the acquisition to US$29.

Especially in the last round of bidding, the price fell quickly and sharply. Bannon's traders also made the most profits in this stage, and finally made a net profit of about 300 million US dollars.

Bannon himself also invested a lot of his own money in it, increasing his personal assets to nine figures in one fell swoop.

"I can take a good rest for a while, enjoy life, maybe invest in some real estate, or buy a sports team or something..."

"Then you still need to work hard. Professional football teams are not cheap nowadays."

"Indeed, maybe we can work together again and be bosses together..."

Ronald made a joke, and the two of them opened a bottle of Romanee-Conti worth $5,000 and toasted to the rising sun.

"To be honest, I still want to work in the film and television industry, especially television. Our current televisions are mainly focused on serving audiences in big cities. In many small towns in central and southern Taiwan, there are still no televisions that suit their tastes..."

Bannon drank a little and lit a big cigar, feeling smug.

Ronald said nothing, just watched the sunlight shine into the office, as if lighting up everything.

Bannon has made so much money here, I wonder how much he can make from Paulson...

"With a net profit of 400 million, minus taxes and other expenses, where are you going to put the money?"

Paulson also attended the meeting with Ronald in person. Goldman Sachs was much better, they used a large number of put option contracts, and they could mobilize more short-term leverage. Although they entered the game later than Bannon, they made more money than him.

"What are your suggestions?" Ronald also brought a team of lawyers and accountants. According to their estimates, in this large-scale short-selling operation, Goldman Sachs Global Asset Department could easily earn 80 million through trading commissions, option contracts, margin interest, etc.

This is not counting the profits that Goldman Sachs made after seeing the fat meat. Looking at the people in the global market department who were smiling happily, it is estimated that there were quite a few of them. Otherwise, Paulson would not have come to attend in person again.

"If you want to put the money overseas, we recommend investing in some assets in Japan and Britain. The situation of British pound and Japanese yen assets is very stable. There are also some tax avoidance benefits, I guess..."

"I want to transfer the money back to China, and I need the money to be completely suitable for domestic investment..." Ronald said that he still wants to transfer the bulk of it back to China, and he needs to pay all the taxes that should be paid, and not take radical tax avoidance actions.

“In that case, you will need to pay a capital gains tax of up to 39.6%. If you continue to invest in stocks for more than one year, you can get a preferential long-term capital gains tax rate of 28%, and you may have to pay more than 1 million in taxes.

However, with the passage of the 1031 Like-Minute Exchange this year, if you are willing to buy real estate and hold it for a long time, you can enjoy nearly unlimited tax deferral benefits until you sell the asset.”

Ronald discussed with the lawyer and accountant for a while and agreed with what they gave. Anyway, the money must be used in America, so he bought assets. After all, in America, only those who pay taxes will be protected by the government, and those who try every means to evade taxes will also be watched by the government...

Representation comes from paying taxes, which is the foundation of the American nation and remains so today. And if state taxes are paid in New York or California, they can also be protected by local politicians.

Of course, those 100% legal tax avoidance and deferral clauses should also be used. But I don't know what assets are suitable for sale now? With a total of 700 million assets, there are not many opportunities to spend them all at once. Is it really like Bannon said, buying a professional sports team?

“Are you considering buying any assets?”

Paulson kept smiling throughout the whole process. Ronald, this big client, was rich, decisive, and trusted him and the people at Goldman Sachs. Most importantly, he was also very lucky. The most important secret to Goldman Sachs' success is to find those lucky people and stand with them.

"Yes, do you have any suggestions?"

"Yes, isn't the person who needs to sell assets the most to get cash right in front of you?"

"Redstone?"

……

"Mr. Redstone, Mr. Redstone, what do you think about winning the Paramount acquisition battle? What are your comments?"

Lei Shidong was enjoying dinner with his colleagues and his wife at the famous "21" restaurant in Manhattan, New York. When he left, he was stopped by reporters. Various questions were thrown at Lei Shidong like a cannon.

"Don't say that, I haven't won yet. There is no winner until Paramount certifies the winner."

"Mr. Lei Shidong, if you win the acquisition as you wish, what do you think of the company's development strategy?"

Lei Shidong just smiled, and his silence allowed the reporters to continue chasing him until he got in the car and left.

"Call all Paramount executives. I want to interview them one by one. Anyone who does not conform to my strategy will have no place in Paramount Communications in the future..."

Lei Shidong, who got in the car, really changed his face. He suffered heavy losses in this acquisition.

The value of his personal stock in Viacom alone has fallen from $66 billion before the bidding war last September to $28.5 billion as Viacom's stock plummeted.

After the merger, Paramount-Viacom paid $600 million in dividends and interest a year, while the cash flow calculated by accountants was only $1.7 billion a year.

No matter what the outside world says about him, after this acquisition, Viacom and Redstone are on the verge of bankruptcy. They urgently need to sell any valuable assets of the group to make up for the cash deficit on the books.

Any business that can generate cash flow, such as Paramount Productions and the group's affiliated TV stations, must aggregate the advertising revenue generated by hit movies and high-rated TV series to the group's head office.

Because the terms of the merger with Blockbuster were not very good under the precarious circumstances, Redstone also had to fight with the original owner of Blockbuster, Huizenga, to reduce his power on the board of directors as much as possible before he could truly take over Blockbuster.

By this calculation, the merger of the three companies may be approved by the SEC and other regulatory agencies in about the same time. By then, Blockbuster will be like a dairy cow, continuously contributing cash flow to Viacom.

Many of Paramount's assets were quickly sold to fill short-term losses.

Redstone is very confident. When he acquired Viacom, the acquisition price was 32 billion and he was burdened with 28 billion in debt. Over the past seven years, he has used various means to not only get Viacom out of debt, but also without selling any core assets.

The total debt is only $102 billion, which is much smaller than the potential value of the new Viacom of $300 billion. As long as Paramount's various assets are quickly sold, the dangerous moments of the past few years will be over.

"Shirley, we need to talk about Paramount Pictures' box office revenue this year. How much do you estimate it will earn?"

On Monday, after Redstone received formal confirmation from Paramount's board of directors that he had become the new owner of the old media company, he immediately called each business department to confirm which ones should be retained, which ones should be sold to pay back the money, which people should be retained, and which ones should leave.

Martin Davis, the former chairman of Paramount Media, was dissatisfied with Redstone's reneging on his promise not to give him a board seat, and wanted to take the money and leave. His stocks and options, plus various contracts and income with a golden parachute, took away hundreds of millions of dollars from the new Viacom account.

Lei Shidong just felt that he seemed to become younger again. He seemed to have regained the energy he had when he acquired Viacom. These small problems only had a positive stimulating effect on him.

"This year we have Forrest Gump directed by Ronald Lee, and three film contracts with Tom Cruise's production company..."

"Very good. When I return to Los Angeles, you need to give me a detailed analysis of the revenue and profits for the next three years. By the way, you said it was a movie directed by Ronald Lee? I want to see it in person. Please notify him to come..."

Lei Shidong hung up the phone with a smile. To deal with such subordinates, you have to confuse them and not let them see through your thoughts. There is also a movie by Ronald. I didn't expect that this little guy would have the opportunity to meet me again so soon. When the time comes, I will mention it. He didn't sell Blockbuster's stock to me at that time. Did he regret it as I predicted?
Lei Shidong would not let this happen. In front of his subordinates, he would maintain such an image of being able to foresee things, which would make them feel scared. It was his character to take revenge, which would definitely leave a deep impression on Shirley Lansing and others.

After making a few phone calls with his subordinates and enjoying their timid looks, Lei Shidong was in a good mood and went out to accept interviews from several major newspaper reporters.

"Mr. Lei Shidong, what do you think after the acquisition is successful?"

"Just like I bought Viacom seven years ago, let me make these companies what they should be."

"Why, Mr. Redstone, at a stage in your career when most executives might be planning for a comfortable retirement, would you commit to a fight where victory would be so costly?"

"I want to do this, it adds length to my life. I just love what I'm doing. Do you think I'm old? I told you, yesterday I ran two and a half miles on the treadmill and played tennis for an hour..."

"Mr. Redstone, do you have any plans to sell Paramount Communications, Blockbuster, and Viacom's many assets?"

"I want to better integrate the resources of several companies. For core assets, we will not sell them, but will invest more in them and manage them better. Some marginal assets are not in our future blueprint, so we will certainly consider selling them."

"Well... there are really a lot of assets under Paramount that are not in the blueprint of old man Redstone..."

The next morning, Ronald had just gotten away from a charity event for veterans in New York when he saw an interview with Redstone in the newspaper. On the other side of his desk was a long list of Paramount Communications assets for sale, offered by Goldman Sachs. The list stretched to the edge of the desk and then hung down.

"These are all very good assets..." Ed Bastian, the CEO of DDH, was drooling at the long list of local TV stations and radio stations...

"Ask someone to look at it and give me a list that you think is good. Paramount Supermarket is open." Ronald said with a smile, and then his eyes stopped at the top few names on the asset list...