Exploiting Hollywood 1980.

Chapter 1556: The Wave of Reorganization and Merger in the Media Industry
"Ronald, I heard you want to acquire MGM with Kerkorian?"

A few days later, Disney's chairman, Michael Eisner, called Ronald personally and asked him a straightforward question.

Ronald was a little surprised that the news leaked out so quickly, but then he thought that it must have been done by Kerkorian, a Las Vegas gangster who always liked to use some "gangster tricks" to get ahead of himself.

Originally, Ronald and he had reached a gentleman's agreement on this matter. As an American businessman who abides by traditional Puritan morals, they should abide by the promise witnessed by God and fulfill their respective promises.

Kirk Kerkorian is of Armenian descent, and his parents were immigrants who fled to America when Turkey created a tragedy. So their traditions are a bit incompatible with America. Relying on their connections in the British Royal Air Force, they rented some planes at low prices after the war and made a fortune by providing charter flights for Hollywood stars.

His creed is obviously that if he can get 10% advantage, he will never take 90%. Even if there is no problem, he will stir it up to create all kinds of momentum, mislead the negotiating opponent about his own strength, and then find ways to take advantage.

Their business philosophy is similar to that of the Jews, but they have many more dirty tricks than the Jews. This time, they distorted Ronald's intention to acquire United Artists into a cooperation with them to acquire MGM, which surprised other potential buyers who wanted to acquire MGM.

To put it bluntly, Kerkorian still did not want to buy back MGM at a price that was more than 10% higher than the market price. He wanted to spread the news of Ronald's cooperation with himself to scare off potential buyers such as Disney and Time Warner. By reducing the number of competitors, he could force Credit Lyonnais to surrender at a transaction price close to the market price.

"No, I did meet with Kirk, but I can tell you clearly that I have never, will not, and will not plan to acquire MGM. You can be sure that my IQ is higher than Forrest Gump's. I will not buy an empty shell just for the name of MGM."

Ronald immediately and completely denied his interest. Anyway, his plan was to acquire the United Artists label. United Artists was United Artists and MGM was MGM. Although the two had now merged, Eisner would understand what he meant.

"Really? If your DDH could own some of MGM's overseas distribution channels, wouldn't that be a great complement to your business?" Eisner was now suspicious. This year's media industry and Hollywood had reached an important juncture of mergers, acquisitions, expansions and reshuffles. Everyone was trying to find ways to make themselves fat so that they would have enough fat to avoid freezing to death when the media underwent major changes in the future.

In addition to MGM, there are several other delicious hunters on the market, waiting for some big players including Disney to seize the opportunity and take action.

First, the financial situation of several national television media outlets, including ABC, CBS, and Ted Turner's Turner Media (including CNN), is at a critical juncture as advertising revenue is slowly declining and their broadcasting equipment and networks are facing new technological upgrades and urgently need large amounts of cash.

Television media has always been an asset-intensive industry. In addition to the very expensive hosts, there are also densely populated broadcasting facilities in New York and Los Angeles, as well as the purchase of a variety of TV series, which are all horrific financial expenditures.

In such fierce competition, if you only rely on your own business to maneuver, you may run into big problems and fall into a financial trap if you are not careful.

Among them, CBS is facing a huge revenue crisis. The broadcasting rights of the NFL professional football league, which they have always broadcast, were snatched away by Fox Television, owned by Australian tycoon Rupert Murdoch, for a sky-high price of US$1.5 billion over four years.

Fox is a new TV station that was only formed in the mid-1980s. It does not have much historical baggage and needs to expand subscriptions, so it can afford a high price. Relying on this new broadcasting contract, Fox has widened the gap with other local TV networks and officially caught up with ABC, NBC, and SBC in terms of audience numbers and ratings share, officially becoming the fourth largest TV network.

Ted Turner's Turner Broadcasting System (TBS) was in another trouble, that is, insufficient cash. He expanded too fast in the past decade. CNN, as a 24-hour news network, became famous in the Gulf War. However, the operating cost of cable TV is much higher than that of wireless TV, and the huge audience did not bring the expected huge income.

Moreover, Turner has also invested heavily in two other areas of attracting audiences: sports event broadcasting and old movie reruns. Turner Classic Movies (TCM) is the party that acquired the MGM film library, and TNT has also signed a contract to broadcast NBA professional basketball games.

He also invested a lot of money to shoot many original TV series instead of adopting the purchasing system commonly used by other wireless TV stations.

It has to be said that Turner has a good vision, and the TV series he produced and the old movies he acquired are all classics. However, the rapid expansion in the short term is not something that Turner's financial resources can support. In addition to the previous incident of not being able to pay the final payment to MGM, there are also many rumors about his financial difficulties.

Under such circumstances, major media groups are keeping an eye on these old TV networks to see if there is any opportunity to acquire them.

If Ronald and Kerkorian could swallow up MGM together, they would be a potential rival. Although MGM is seen by industry insiders as a garbage can with no valuable assets. Now Ronald and Kerkorian would not have enough money to buy any TV network even if they joined forces.
But considering what Redstone did last year, the financial market does not price in this logic. If MGM becomes valuable through some "creative accounting methods" in their eyes, then Ronald will have the possibility of using high leverage to leverage a TV station as collateral.

"Ha, you wait for me for two days, no, one day."

Ronald didn't want to get involved in this matter right now, so he called Ed Bastian immediately. The next day, the Wall Street Journal published DDH's denial of interest in acquiring MGM.

Bastien said that MGM is the miracle of Hollywood, and its classic films are the collective memory of the American people. However, DDH's development strategy is not to be a classic big studio. Instead, DDH wants to be a production company that provides a platform for many artists.

The company has no plans for any new acquisitions in the near future, which is equivalent to denying the rumors through official media channels.

At the same time, Ronald also passed his anger to Kerkorian.

He formally informed Credit Lyonnais that he could not participate in any way in the initiative to acquire MGM.

After receiving Ronald's anger, Credit Lyonnais took immediate action, doubling the anger and passing it on to Kerkorian.

The French newspaper Le Figaro published a report that according to an unnamed insider, the acquisition of MGM previously supported by Credit Lyonnais may have involved improper fraud.

At that time, the Italian-American financial fraudster Giancarlo Paretti was also misled by the then owner of MGM. It was reported that the sale transaction at that time was suspected of violating the financial laws of the United States and the SEC information disclosure provisions of the United States.

The two countries are considering adding him to the wanted list and prosecuting him in both places. People familiar with this Italian-American financial practitioner said that Giancarlo Paretti might agree to become a tainted witness in exchange for the withdrawal of the prosecution against him...

"Ronald, how could you do this? Didn't you promise me that you would buy Lian Yi?"

As expected, as soon as this statement came out, Kerkorian seemed to have hit the critical point. He immediately called and angrily accused Ronald of betrayal.

"Really? What I promised was to buy United Artists, and what I announced was that I would not participate in the acquisition of MGM. What's the problem with that?"

"Nonsense, United Artists is now a part of MGM." Kerkorian blushed immediately. When he was acting like a hooligan, he met a young man who was actually playing word games with an old hooligan like him?

"Why, you want to clarify this in the media? No problem, I'll call the Wall Street Journal and do an exclusive interview with you..."

"This……"

Kerkorian didn't expect Ronald to be so tough, as if someone was backing him up. This wasn't just a stun, this was him being arrogant to an old rogue like him!
Seeing this abnormal situation, Kerkorian calmed down. The intuition he developed from doing business in Las Vegas for many years made him feel that there was more to Ronald than he had imagined, and he was not just a young man who made his fortune by relying on his director's memory and luck.

"Why, you don't like the Wall Street Journal? Never mind, I can call Mrs. Graham. She just complained to me last week that there wasn't enough heavyweight news. What do you think of the FBI and SEC investigating the fugitive Italian Ponzi schemer? They are willing to cooperate with the French Le Figaro to report this news. I think it's heavyweight enough..."

Ronald almost told Kerkorian that he had fabricated the news about the investigation of Giancarlo Parretti. You want to play the game? Then let's play it according to the standard of the American politician game. It starts with the authoritative media leaking the news, then the investigative reporters who are getting closer to the truth, and then the powerful departments such as the FBI, SEC, and IRS intervene in the investigation. Whether you can get away with it depends on how many real friends you have on Capitol Hill.

"Ronald, that's not what I meant..." Kerkorian's face began to turn pale again, and beads of sweat kept falling down his entire back. Fortunately, he was protected by Nevada state law, and those business financial documents were not subject to federal jurisdiction.

"If I were you, I would call my congressman and the two senators from Nevada and ask them what procedures are needed to make federal law prevail over state law when state law conflicts with federal law... Let me think about it, my lawyer told me that you should check Article 6, Section 2 of the First Amendment..."

"What is Article 6, Paragraph 2?" Kerkorian actually called in a lawyer to ask them to explain.

This clause is also known as the override clause. In unspecified areas such as family marriage, education, and minimum wage, state law can have absolute jurisdiction.

However, once interstate commerce is involved, federal law can override state law when it conflicts with state law. The business activity of selling MGM is exactly interstate law and involves transnational business activities.

Although there are many legal clauses and forms that can be challenged, once powerful departments such as the FBI, SEC, and IRS are involved, these businessmen in Las Vegas are often the weaker party. They understood this as early as the Prohibition era and understood that they should not go against federal law enforcement agencies.

Kerkorian actually called two federal senators whom he had always supported, especially Harry Reid, who had a higher status in the party.

As a result, Harry Reid's assistant said that the boss was not in the office, was discussing important matters, and could not answer his call.

This sobered Kerkorian up a bit, and he started calling his subordinates to resume negotiations with Credit Lyonnais. Harvey Weinstein had recently been showing off his photo with the current president, William, in the circle. Hollywood also has a tradition of being close to the White House. If Ronald had power that he could not imagine, it would not end well.

"Right? I didn't lie to you, did I? It has nothing to do with me. My only mistake was talking to Kirk on the phone about MGM. I shouldn't have answered his call. Anyone who gets close to this person will get into endless trouble. I still haven't learned my lesson. I was fooled by him before."

At this time, Ronald was already playing golf with Disney's Eisner.

Ronald had just started learning to play golf, but fortunately the foundation he laid from wrestling when he was young was still there. He had great absolute strength and the skills to control his strength, so he soon learned how to play well.

"You do have room to learn in this position. Ronald, I hope you won't be unhappy to hear me say this. Being a director is one thing, but managing a large company is another. Haha..."

Eisner was dressed in golf casual attire. The light-colored suit mixed with linen fabric fit him well. He hit the ball high and far with one shot...

"The media industry is undergoing mergers and acquisitions right now, and everyone's nerves are on edge..." The two men walked closer to the green, and Eisner apologized in disguise for his doubts.

"Indeed, CBS and TBS are both in trouble... Now someone is here to buy them, which is a favor to them..." Ronald looked up at the weather, which was sunny. No wonder the top executives like this kind of sport, with blue sky, white clouds, fresh air and sunshine, and no need for superhuman physical fitness. It is indeed the favorite of these executives who have spent most of their lives in offices.

"What? You are also researching television?" Eisner's suspicious nature began to set in again.

"Of course, don't forget that I am the owner of two professional sports teams in New York. The broadcasting contracts for the new season need to be renegotiated, and TNT and ESPN's bids are both good. But the players' union wants us to raise the minimum wage, and there may be a strike."

"Ha, those people are all millionaires, right? Why are they on strike?" Eisner's suspicion was somewhat relieved. He and Ronald chatted about CBS, TBS, and NBC, and ended the meeting happily.

"This old fox, I'm afraid he's targeting ABC..."

After returning, Ronald and Ed Bastian talked on the phone again. If Eisner acquired ABC, it would be another giant merger and acquisition, which would probably surpass Viacom's merger and acquisition record.

"Ronald, you have an invitation to participate in the regional bridge competition organized by ACBL." After the call, Richard suddenly came and brought Ronald an invitation.

"Who invited me? Oh, the American Contract Bridge League (ACBL), why did they choose me? I'm not a professional player."

After Ronald looked at the invitation, he realized that it was Gates of Microsoft and Buffett of Berkshire who recommended him, which led to the ACBL inviting him to participate in the celebrity game in the Los Angeles area.

"Hmm..." Ronald thought about it. He had to find a partner. "Call the counselor in DC for me..."