Exploiting Hollywood 1980.

Chapter 1584: Fighting for CAA's Future Partner
"Mr. Li, I'm glad that you can take the time to see me and use your resources to help a small agent like me." Kevin Huwen, one of the partners of CAA, came to Ronald's home and sincerely thanked Ronald for taking the time to help him solve the financing problem of purchasing CAA's shares.

Among the group of young agents known as the Young Turks, who are about the same age as Richard Levitt, Kevin Hoover is the closest to Ronald. When Richard went to help deal with the host David Letterman's affairs, Kevin Hoover even represented Ronald's agent business for a period of time.

When Michael Ovitz thought he was smart and announced ambiguously in the company that someone was trying to recruit him but he hadn't made a decision yet, these young agents had already regarded Ovitz's sale of CAA as a 100% certainty.

So everyone looked for opportunities to go to banks or wealthy people to find ways to raise funds, and tried to use cash loans to buy the shares that Ovitz had spit out.

However, although these agents usually have a lot of say with stars and film studios, in the eyes of banks, the equity of the agent business is not a good collateral.

First of all, banks don't know much about the unpopular business of brokers. In Hollywood and the entire United States, there are only four or five relatively large brokerage companies. And such partnership companies generally don't come to banks for loans.

So as managers of the lending department of commercial banks, they have no idea how much a partner of a brokerage firm will be worth in the next five years?
Their favorite loan borrowers are those with actual assets that can be mortgaged, such as a steel plant or a real estate company. If they want to calculate the price of the mortgage, they can quickly determine it based on the futures price of the day or the sale and rental price of the property in the market.

An agency needs to understand a lot about Hollywood business and the income structure of agents, as well as whether the agency's business will expand or shrink in the next five to ten years.
If he really had this ability, he would not be a manager of a small lending business in a commercial bank.

Of course, as CAA is a well-known and largest agency in Hollywood, there will definitely be some commercial banks that would be interested in mortgaging their shares.

However, the valuation of such equity mortgages is based on the account flow of CAA's business operations in the past few years. As a private company, CAA has no obligation to disclose financial reports. It is almost impossible to determine the value of a company without looking at its accounts.

But Ovitz has not officially announced the sale of his shares in CAA, so CAA's books are still confidential. They are not open to anyone. These poor young partners cannot obtain the loans they need to purchase equity from normal commercial bank channels.

But the opportunity to buy equity doesn’t come around often, and given Ovitz’s personality, he wouldn’t give these young partners too much time to raise funds. So during this period of time when the announcement hadn’t been made, everyone wanted to find money and get ready to run.

Whoever can find more money first can buy more shares of CAA. Those who don't have time to apply for bank loans may only be able to get a minimum equity. Originally, everyone was an equal partner, but because of the difference in the speed of finding money, they became superiors and subordinates. Which young Turk can stand it?
Borrow from parents, celebrity friends, or other wealthy people, or even have one or two handsome partners, or even think about hooking up with those wealthy middle-aged Hollywood female stars.

At the critical moment, Richard suddenly extended an olive branch to Kevin Hu Wen. Ronald had a way to borrow enough money to buy the shares at an interest rate slightly lower than the market rate.

Although he didn't know how the matter was handled in the end, Kevin Hu Wen was extremely respectful when he met Ronald. After all, this was a big shot who would decide his future career and wealth level.

"First of all, Kevin, I'm very happy that you came to me for help. This shows that I am a trustworthy person in your heart..." Ronald just smiled, then poured him a cup of black tea and asked him to taste it.

"As a film director and producer, I have received a lot of help from agents, whether it is my agent Richard, Niceta, or a young and promising agent like you. If Ovitz wants to sell its shares, it should be taken over by a backbone like you. I don't want CAA to be taken over by a group of rich laymen who don't understand the agent business. After all, professionals like you understand Hollywood, and it is convenient for me to communicate. You understand my needs, what kind of actors and staff I need... Don't you think so?"

"Of course, if there is anything I have learned at CAA, it is to always have good relationships with the best directors in Hollywood, listen to their needs, and meet their requirements. The filming of movies and TV series is like an army fighting, which requires a strong general...ah, no, director."

Kevin Huwen understood very well. He knew that the price Ronald offered was that he had to listen to him on important matters in the future. There was no problem with this. He wanted to curry favor with a super producer and director like Ronald, but he couldn't.

"Very good. I have a good relationship with some bankers at Goldman Sachs. I told them about your predicament and they recommended a commercial bank with a good reputation to give you a very suitable loan. For these bankers who are willing to enter the Hollywood industry, this is also a long-term investment."

Kevin Hu Wen went to handle the procedures happily. In addition to him, a partner who was on good terms with Richard and another partner who worked happily with Niceta all got loan opportunities from Ronald.

This commercial bank is the Southern California National Bank. It has a big name, but it is actually a local community bank based in Torrance, California, and its main business is within California.

This bank was indeed recommended to Ronald by bankers from Goldman Sachs. However, the purpose of the recommendation was certainly not to make a few small loans, but because Ronald wanted to start intervening in the financial industry. He planned to acquire two small community banks and build his own branch business in the financial field.

Although Southern California National Bank has a small business, it has a very obvious advantage, that is, it has passed the federal charter issued by the Federal Office of the Comptroller of the Currency (OCC). Although it is a small local bank, it can conduct business throughout the United States.

They spent a lot of effort to deal with the Office of the Comptroller of the Currency, the Federal Reserve, and the Federal Deposit Insurance Corporation, the three agencies that regulate federally-operated banks, but due to lack of funds, they made little progress in expansion.

Ronald invested less than $5000 million to acquire the controlling stake in the bank. Due to regulatory reasons, the bank could not be acquired through the DDH Group, so Ronald and his cousin's family set up a private company to control the bank.

Of course, he did not rest in New York. He also invested 5000 million US dollars to control a long-established and well-reputed community bank in Manhattan, called Manhattan Savings Bank. The bank gave Helen some shares, so that she and little Linda could live well with the bank shares even if other investments failed.

Moreover, as a bank based in Manhattan Island and used by those lower-level workers, it has a very good reputation locally. Although it is only a New York State chartered bank and cannot operate out of the state, it has the support of those secretarial assistants working in Manhattan Island, as well as many couriers, food deliverymen, catering industry practitioners, etc., who have deposits in Manhattan Savings Bank.

Ronald does not need to expand the bank's business scope. As long as he serves the existing customers and the mortgage clients from middle-class families well, he will be able to gain additional insurance in terms of public opinion.

From then on, whether it was newspapers (the New York Daily News), television (NBC local), sports games (two professional sports teams), or savings and loan businesses (Manhattan Savings Bank), the average middle-class family in Manhattan, Long Island, and Staten Island would deal with businesses owned by Ronald.

"There are also some agents who want to get this opportunity through me"

After Kevin Huwen left, Richard came over to report the situation to Ronald.

"Do you have a good relationship with them?" Luo Dade asked this because he wanted to know whether Richard could control these brokers after Ovitz sold all his shares?

"Of course, Kevin doesn't share the same interests with us..." Richard's answer was that as long as everyone shared the same interests, he could still win their votes. But if the interests were different, he was not as closely tied to the interest group formed by Ronald Richard and others as Kevin Huwen.

"Then I can't help them." Ronald felt that this kind of favor should be limited in number. Only the scarce ones can gain the gratitude of those who have received the favor. If everyone can get such a loan, then what can Richard Nicita and Kevin Huwen get in return for their previous support?

"Jay Moloney has also been given some opportunities, and I think he's also thinking about giving those opportunities to some of the people he's close with."

The Jay Moloney that Richard mentioned is a partner with whom Richard had a deep conflict when Richard was still an intern. Unlike Richard, Jay Moloney has some connections in Hollywood. In recent years, he has also been very close to Harvey Weinstein of Miramax.

The Credit Lyonnais, a bank that Ronald had dealt with before, now received a promise from former MGM owner Kerkorian to buy back MGM Studios. Their crisis was gradually eased, and they received the approval of the new leader of the country and were included in the national rescue plan.

After withdrawing from the Hollywood studio business, they did not completely abandon the Hollywood market. Instead, they had more cooperation with some independent producers and continued to provide bridge loans for their projects.

Miramax is one of their most important partners. Because Miramax's films usually participate in the three major European film festivals, and with the guarantee of winning awards at these film festivals, Credit Lyonnais is willing to issue bridge loans for these projects and wait for the box office returns after the films are released in the United States before repaying the loans.

Jay Moloney also negotiated some terms with Credit Lyonnais through Harvey Weinstein's relationship. Credit Lyonnais has a long history of film investment in Hollywood, so they know the power of CAA's partners in the industry. So they were willing to provide them with some loans without looking at the account books. Of course, the interest rates of these loans were much higher than those provided by Ronald.

But a high-interest loan is still a loan. For these young CAA partners who have nowhere to get financing, someone willing to lend them money is a victory.

If he continues to operate in this way, it is very likely that in the new CAA after Ovitz leaves, Jay Moloney, like Richard Levitt, will become the invisible superior of many small partners... and each of them will have a group of partners gathering around them.

What Richard meant was that Jay Moloney should not be allowed to get the title of managing partner. Otherwise, after Ovitz left, there would be another younger Ovitz, and the position of managing partner of CAA would not be very meaningful.

Jay Moloney admires Ovitz's business philosophy and often clashes with old-school agents like Richard and Niceta in the way they handle problems. Like Ovitz, he also likes to exert extreme pressure, whether it is on celebrity clients, production studios, or colleagues.

In order to save costs, Jay Moloney even dated several celebrity clients. He did everything he could to make more profit. Therefore, his nickname "Little Ovitz" is well known within CAA.

Ronald thought about it and made a few more calls. Finally, Ronald gave Richard two cards, each with a bank name written on it.

One is the East Coast Haifeng Bank, a wholly-owned subsidiary of a Hong Kong bank in the United States. They have also made a lot of investments in the film industry in Hong Kong. As a bank that really wants to enter the American film and television market, they provide CAA partners with loans at a lower interest rate than Credit Lyonnais, so there is no problem.

The other is East West Bank in San Francisco, California. This bank mainly does business with Chinese people in California. It has a complicated background, but its business is very good. However, it is difficult to expand its customer base beyond Chinese people. With Ronald's recommendation, there is such an opportunity, and they are willing to provide loans to some partners of CAA.

Of course, the amount they offered was lower and the interest rate was higher than the two banks controlled by Ronald.

With these loan opportunities with different levels of affinity, Richard felt that there should be no doubt that he could control the majority of votes at the CAA partner meeting after Ovitz left.