Exploiting Hollywood 1980.

Chapter 1558 Secretly crossing Chencang
Ronald was satisfied after mobilizing some of his private wealth to buy some stocks recommended by the two richest men.

After all, a person's wisdom is limited, not to mention that he is just a filmmaker. In traditional American society, film directors are not a very respected role.

As late as the 1960s, when Peter Bogdanovich wrote biographies of some of the most outstanding directors in Hollywood history, John Ford called his old friends Howard Hawks, George Cukor and others, and expressed his surprise that someone was now treating them with the same respect as a true artist.

This situation did not change until the 1970s, when Coppola's The Godfather, Spielberg's Jaws, and finally George Lucas's Star Wars made movie fans begin to worship the directors.

However, this kind of worship is still limited to the fan groups of specific movies. The whole society, especially the so-called high-end social circles, have not changed their views on these entertainment industry practitioners.

However, the situation of old money is also changing. The richest people in America back then were called robber barons. There were those who worked in match factories, rubber sellers, steel, finance, and chemicals, all of which had close ties with the government and monopolized the market. For example, the families of Vanderbilt and others who were engaged in ferry and railroad businesses have fallen into decline, and their descendants have become ordinary rich people.

The new rich are not engaged in such monopolistic industries. Buffett gained wealth through his investment vision, while Gates is even more unique. In his thirties, he became the second richest man in the world by relying on software, an industry that had just been invented not long ago.

Ronald also did not have any government assistance, but became a successful person by relying on his unique vision and luck in a competitive industry. Therefore, the three of them had some sympathy for each other, and their attitudes towards each other were different from those of others.

None of the three were Jewish, nor did they rely heavily on politicians, and they benefited from chatting about business with each other. Friends of this level broadened Ronald's horizons.

For example, Ronald learned from Buffy that Disney's Eisner would most likely acquire ABC.

Among the possible acquisition targets, NBC has General Electric as its only controlling shareholder, so it is impossible to sell. CBS actually has the problem of aging audiences, which can be said to be a fatal mismatch with Disney's target audience.

It can be seen from the broadcasting of professional sports events by the two major companies that CBS has always been the broadcaster of NFC among the two major leagues of the NFL, which is in line with their older audiences (NFL audiences are relatively old and are entertainment for middle-aged and elderly men).

Fox snatched this part of the broadcasting rights from them. The remaining AFC league of the NFL will not have its broadcasting contract with NBC expire until a few years later. CBS may have to pay a sky-high price to get it.

The audience of ABC TV Network is relatively young. The success of their previous hit drama "Growing Pains" shows that the average age of the audience is relatively low.

In addition to the overall audience age, ABC's parent company, City Capital, also has a dedicated children's channel and a growing sports broadcasting channel, ESPN. They hold half of the broadcasting contract for the basketball league NBA (the other half is Turner Broadcasting's TNT).

In addition, Tom Murphy, the owner of ABC/City Capital, had worked with Eisner during his time at Paramount, broadcasting classic Paramount movies on ABC. President Dan Burke was also an old acquaintance of Eisner and they had always had a good relationship.

Buffy also saw this, and as a major shareholder of ABC/City Capital, he had some inside information. He asked Ronald about the film industry, especially the key points of Disney's operations, and also indicated that this might be the largest merger and acquisition in the media industry, and ABC, not CBS, would be the protagonist.

In fact, Eisner had already made his ideas clear. When they met, he drew a blueprint for the post-merger merger to Tom Murphy, which was called vertical integration of "content + channel".

Since its establishment, Disney has a large number of film and television content, as well as a number of cartoon characters with intellectual property rights, which will become the best content for children and teenagers.

What attracted him most was the Saturday morning children's program time slot on ABC. This time slot is when children and their families watch TV together. For manufacturers of household products, this is a godsend advertising time slot, which can cater to both children and teenagers who buy the products and parents who pay for the products. One time slot can serve these two major groups of people.

You know, the biggest spenders in the advertising market are the advertisers in the fast-moving consumer goods industry with the largest sales volume. Eisner's dream is to firmly grasp the content and distribution channels of these two groups of people.

He summarized the entire strategy as "children, youth, families..."

After understanding all this, if Disney wanted to acquire another national TV station, it would face long-term operating liabilities and the upcoming cost of a major equipment upgrade. Only by buying ABC could Disney's story be recognized by Wall Street.

If it were CBS, many of its viewers would be grandparents, and telling this story would be ridiculous...

Although CBS's price is much lower, Eisner's purchase of a TV station is not entirely for Disney's business. His dream of a so-called "comprehensive entertainment empire" focuses on the empire, which needs an emperor...

Because of this, Eisner is not comparable to the rich second generation like Redstone. The situation he faces is much more dangerous. When making an acquisition, in addition to facing external competitors, Eisner also has to face the betrayal of internal people at any time and the intention to oust him.

After evaluating the overall situation, Ronald gave up the idea of ​​making a fortune by shorting the stock market in the same way as when Redstone acquired Paramount.

When this matter was known, Redstone was at most upset with him for a while. He did not make any money directly from Redstone, but the shareholders of Paramount and Viacom paid for it. The two did not have a deep hatred.

However, if the attempt to short Disney or ABC was exposed, Eisner's dream of becoming the emperor would be ruined, and he would have a mortal enemy. Eisner might be impeached by the opposition led by Walt Disney's nephew who still held some shares in Disney because of the failed merger.

The most dangerous thing was that Disney's nephew was not strong enough and hated Eisner very much, so it was very likely that the battle would end in a draw, with neither being able to do anything to the other. At that time, he would have to face a crazy Eisner who still held the position of chairman of Disney, which would be very unwise.

There are many ways to make money, and Ronald felt that there was no need to wade into this muddy water. So he did not devote more energy to this merger and acquisition case.

However, he was always concerned about the progress of another merger and acquisition case, and he did it in a very covert way, hiring a group of practitioners in the consulting industry to provide information and analysis to him, an anonymous client.

This was the acquisition of MCA, the parent company of Universal Pictures and Universal Music, led by Seagram's Edgar Bronfman Jr.

Since Ronald paid a large sum of money and hired the industry's top consulting firm, not only information related to the acquisition, but also some other Seagram developments were sent to Ronald.

Among them, there was one piece of news that aroused his strong interest.

When Bronfman Sr. was managing the company, he had made several attempts to acquire large companies through the open market in an attempt to gain controlling rights.

In addition to the attempted and failed acquisition of MGM, another acquisition that had a huge impact on the financial industry was the acquisition of Continental Petroleum in 1981.

Continental Petroleum was an important supplier of chemical raw materials at the time, so DuPont was also interested in acquiring such an old oil company. They raised about 80 billion in funds to buy them.

At the same time, Seagram also participated in the competition. He and JPMorgan Chase formed an acquirer and took the initiative to acquire a lot of Continental Oil shares. Finally, DuPont did not have enough cash and had to convert Seagram's Continental Oil shares into DuPont shares through stock swaps.

This move by the elder Bronfman was even better than the acquisition of Continental Oil. Their shares, in the end, accounted for 24% of DuPont's total shares, and they had a high voice in the board of directors. Later, they used this voice to enjoy DuPont's high dividends for many years.

DuPont, on the other hand, hated this group of vampires. They were not good at anything in the board of directors, but they were always bad at everything. All they did was to divide the money. This caused DuPont's reinvestment ratio to drop to an unprecedented level.

As an asset-heavy multinational chemical company, such behavior can be said to be sucking blood from DuPont without making any contribution. The most disgusting thing is that other DuPont shareholders have also benefited from this for many years.

And just in these few days, a rumor has been circulating on Wall Street that Seagram might sell all of his DuPont shares and exchange them for cash and leave.

The current value of Seagram's shares is about 70 to 80 billion US dollars. It is impossible to sell them directly. Otherwise, even the market maker would not be able to take up such a large number of shares.

Therefore, even if they want to sell, it must be a very complex transaction structure involving warrants and repurchase agreements, which is very complicated. This complexity itself may lead to uncertainty and different interpretations among investors, thus affecting trading behavior.

Therefore, it is unlikely that Seagram's decision was kept secret from the industry in advance. The consulting report also mentioned that recent signs, including JPMorgan Chase and Andersen, have large teams working overtime day and night, as if they are working on a very large project.

Of course, this cannot completely rule out the possibility that the rumor was leaked intentionally, so the report did not mention death.

However, Ronald believed it to a certain extent. The Japanese people who led the purchase of Universal MCA in Panasonic wanted to make sure that the deal could not lose money. They paid $60 billion to acquire MCA, which was exactly the amount that Seagram was rumored to have paid for the sale of DuPont.

Just as Bronfman Jr. began to take control of Seagram, he made such a big decision to withdraw from the chemical industry and turn all his efforts into the entertainment industry.

Ronald has to admire such a brave strategy. He is indeed a rich second generation...

To be on the safe side, Ronald called his friends at Goldman Sachs to get more information. Unexpectedly, Goldman Sachs was also trying to get a bigger share of the deal...

Ronald's friend, Henry Paulson, who became the COO and was nominated as the CEO's successor for the first time this year, called Ronald and visited him at home.

At the "party" Ronald threw for him (to keep it a secret), Paulson and Ronald enjoyed fresh Italian salami and brandy together...

After that, the two of them had a secret conversation in the pavilion of Ronald Garden, separated by bodyguards. There was a nine-curve bridge and ponds all around them. Except for the frogs eating sugar water lilies, no animals could hear what they were discussing.

"It's really strange, a Goldman Sachs banker discussing with a film director how to facilitate a merger and acquisition?" Ronald made a cup of black tea with Gongfu tea set and offered it to Paulson.

The latter actually liked this brewing method very much. After smelling the aroma with a small cup, he drank the black tea like Ronald did, letting the tea soup roll back and forth in his mouth, fully enjoying the color, aroma and taste before swallowing it.

"This is not surprising. We have never really understood the Japanese's thinking. I know that you played a very important role in Sony's successful acquisition of Columbia Pictures, so I am not asking you for advice out of courtesy. On the contrary, this is a necessary skill for a successful banker. Only by knowing who to ask what questions can you get the truth!"

"Hey, do you want to know about this?" Ronald poured him a refill of tea. He did not hold any position in Sony Columbia, so Ronald thought that few people in America knew about his friendship with Ohga-san.

“Like I said, the most important job of a banker is to find the right people and ask the most important questions.”

"Hehehe..." Ronald poured himself another glass, then slowly looked at the scenery.

A few minutes later, Paulson showed no sign of impatience as he discussed with Ronald the techniques of Monet's water lilies and the differences between different versions, as if he was just appreciating the painting with a friend.

Ronald was impressed by this and stopped asking, "Henry, I'd like to know what question you want to ask me?"

"For this business, what terms will make the Japanese give up the deal?" Paulson finally asked the question that had always puzzled him.

It is much more difficult to communicate with Panasonic people than with executives of domestic companies. Most of the time, I am not sure what they are talking about. Just like in this discussion with them, the Japanese also talked about the past of the founder Matsushita Konosuke, how he was worshipped by all Japanese industrialists during the post-war reconstruction. Everyone was discussing Matsushita Konosuke's business law...

"Did they mention the founder, Mr. Konosuke?" Ronald saw Paulson nodding before he finished speaking, so he continued, "Did they mention that Konosuke was the first business god after the war?"

"Hiss..." Paulson closed his eyes and drank the tea in one gulp.

Sure enough, asking the right questions to the right people will yield very inspiring answers. In America, the first Japanese who are very good at business management is Akio Morita of Sony, followed by Kazuo Inamori of Kyocera Group. As for Panasonic...

"So what would make Seagram give up the acquisition?" Paulson felt that Ronald's understanding of Hollywood was much deeper than he thought, so he might as well listen to his evaluation of the buyer.

"He is a proud young man. What he can't tolerate most is a CEO who has too many ideas and goes against his own strategy..." Ronald smiled proudly. This was the opportunity he had been hoping for for a long time.

"How to say?"

"I understand that while Ovitz is working hard to make deals and is seeking a CEO position after an acquisition, he is known in Hollywood as a deal maker. In deals, what matters most to him is how much commission he can get as an agent, not the profitability of the film project or its box office success."

"What's your opinion?" Paulson's eyes narrowed behind his glasses. Does Ronald have any more ideas?
"There are many successful agents in Hollywood who are more familiar with the production business than he is. In fact, there are people in CAA who are much more familiar with the production business than he is..."

"Well... this kind of party is very interesting. I've also been to Mr. Ovitz's house. It was very boring there, and the Japanese garden style didn't seem to be well-learned. It's far inferior to the Impressionist-like scenery here. I wonder if there will be a chance to hold it again. I will invite my wife and friends to come..." Paulson seemed to understand what Ronald meant. As long as it wasn't Ovitz, he didn't care about anyone else.

"With pleasure..." Ronald seemed to understand... I'll help you find an opportunity for the parties to get in touch...