Exploiting Hollywood 1980.

Chapter 1597 The Balance of Power
After a while, Eisner still did not come out to support Ovitz. Ovitz felt betrayed. In this case, if he were at CAA, he would have spoken up to clarify their reporting lines and help them determine their levels.

Seeing that Ovitz seemed incompetent and was speechless, General Counsel Sandy Litvak thought that he was really the kind of wimp that Stephen Bollenbach had described, and quickly joined the battle, "I am responsible for the legal affairs of the entire group, and I don't report to you..."

"Daxmn it!" Ovitz understood that this was a showdown planned by Eisner, deliberately putting himself in a situation of being besieged. After all, Ovitz had just taken office and had not made any achievements. It was impossible for him to have any prestige within the group at this time.

At this time, facing the direct provocation of his subordinates, the correct approach should be for Eisner to step forward and mediate the conflict as the person in the highest position.

However, since this was most likely something Eisner had specifically planned, it would be difficult to expect the other party to come to the rescue.

Sure enough, Ovitz looked towards where Eisner was, but he just turned his back, pretending not to see anything and not caring about Ovitz's predicament of being besieged.

Ovitz knew that he was the only one he could rely on at this time. He said to the two fools, "Listen, I will be the CEO of the new Disney, and you will report to me soon. But please don't misunderstand and think of the reporting chain as a pure superior-subordinate relationship. This will be a new type of colleague relationship. I am just there to provide necessary help."

“CEO, huh…”

The group's CFO, Stephen Bollenbach, sneered. When he joined Disney, Eisner hinted to him that he was to take over Frank Wells's position as the second-in-command of the president. Who the hell are you, Ovitz?
"No, we always have and always will report directly to the board of directors." General Counsel Sandy Litvak also saw through Ovitz's weakness. Eisner was watching the show anyway, so if he didn't fight for his own power now, when would he?
In this way, the three people, each with their own hidden agenda, argued for a long time like chickens talking to ducks, and no one could convince the other.

If Ovitz only had the title of president and COO but did not have the reporting chain authority for the heads of other functional departments, then he would be downgraded within Disney to the same level as them, and everyone would report to Chairman Eisner.

At most, your title of president is nominally half a level higher than that of CFO, financial director, and legal director. But in such a large company, nominal power ranking is the most useless.

At CAA, with the absolute controlling stake, Ovitz is like driving a bus. Sitting in the driver's seat, he determines the direction of the bus. As long as he turns the steering wheel, everyone will follow him involuntarily.

But Disney is a public company without an absolute controlling shareholder. To manage such a company and be its president, COO, or even CEO in the future, is more like being the captain of the Titanic.

On the bridge, Ovitz's order was just a verbal order. All orders had to be passed through the first officer, second officer, third officer and a whole set of management systems on the bridge, and then conveyed to the engine room, the steering wheel, and various functional departments.

If they obey your orders and communicate them accurately, then the ship can go in the desired direction.

But Ovitz was new here, and he didn't know anyone on the bridge, and no one was his friend. No one could hear what he said outside the bridge. He was just a ridiculous puppet waving his hands and screaming desperately.

In the end, everyone had no choice but to walk towards Eisner.

At this time, Eisner was no longer in the study where he had met them, but had returned to the bedroom he and his children shared. The three executives rushed in, causing him to panic.

Stephen Bollenbach took the initiative and said in front of Eisner that he was the more qualified candidate to succeed Frank Wells. General Counsel Sandy Litvak was more cautious. He asked Eisner to clarify the reporting chain of the three people in person. Should they be in charge of their own functional departments and then report to Eisner, or should they report to Ovitz first and not directly to Eisner?
Eisner used his usual tactics, shaking hands with the three executives, stroking their forearms, and saying soothingly, "Everyone has their own autonomy!"

But how is it possible that everyone has autonomy?

Bollenbach and Litvak got the promise they wanted, and left triumphantly without reporting to Ovitz. Ovitz was relentless and demanded an explanation from Eisner.

Eisner is still the same as always, treating every subordinate with an attitude of "You will inherit Disney in the future."

"They are both from functional departments. One came from real estate, and the other came from litigation.
Neither of them had experience in handling talent, nor in producing and distributing movies, television, or books. Only you have this most important experience, and you will definitely be the CEO in the future..." Eisner still wanted to use the old method to appease.

“I need your support, Michael…” Ovitz felt like a soldier walking on a frozen lake, with the sound of cracks suddenly appearing under his feet. Disney was not what he had imagined.

Moreover, a manly CEO would never allow Bollenbach and Litvak into his bedroom, let alone allow them to ambush him without a reprimand. Ovitz began to wonder if Eisner was a weak man who could only balance the various powerful local princes at Disney.

"Don't worry, Michael..." Eisner responded by continuing to give assurances, even though these assurances were not safe at all.

"I'll take care of it all." "Steve and Sandy don't have your creative background, you're the right person for this job. During this time, you'll report to me first, and when you're familiar with how to drive a multinational company, you can report directly to the board of directors. I'm doing this for your own good. You've been leading small companies like CAA in your previous career. Leading a large company requires learning, and I believe you can do it..."

Ovitz was choked up. He didn't expect Eisner to easily deprive him of his position as the second-highest reporting officer in the chain of reporting. Was coming to Disney a good choice?
"Let me make a phone call..."

Ovitz went to another house and called his wife, "Judy, Michael just threw me under the bus, and no matter what I do, I'm going to fail at this job. I think I just made the biggest mistake of my career..."

Ovitz came out of Eisner's mansion and immediately called three of his subordinates who came to Disney with him for an emergency meeting. His only question was whether to activate the nuclear option, give up the opportunity to go to Disney, and instead find a way to get back CAA, and if necessary, take legal action to get back the CAA he had just sold.

Among the three, Bob Goldman was pessimistic about the prospect of going to Disney, but he did not let Ovitz give up because the possibility of them returning to CAA was almost zero. Sandy Kleeman took a wait-and-see attitude, thinking that the situation at Disney was not that bad; finally, Ray Kurtzman thought that Ovitz should do his best.

The three of them were basically in agreement. No matter how dire the situation at Disney was, the only option was to go ahead. Ovitz looked at the three people's faces, and their expressions were clearly similar to those of the young people who stayed at CAA.

He was shocked. He had gone too far on this road and could not turn back. Especially since he had abandoned the negotiation with Universal Studios at the last minute. If he gave up again, he would be a laughing stock in Hollywood. No self-respecting studio would respect him like it did with CAA.

Everyone would say that Ovitz was a clown. Ovitz had no choice but to agree bitterly. Disney was a big company and he didn't believe that no one would come to join him.

Although, it is now certain that after going to Disney, I will no longer have Eisner's support, and it is likely that he is just playing the game of balancing power.

……

“I think I can offer $2 million, but I want to keep the domestic distribution team at United Artists and my seat on the MPAA board.”

At the same time, Ronald was on a three-way phone call with Credit Lyonnais and Kerkorian to discuss the sale of MGM.

Credit Lyonnais and Kerkorian are in a legal battle over their last sale of MGM. Credit Lyonnais accused Kerkorian of not keeping clear accounts in the company he handed over to them, and that many assets had been sold in advance. Kerkorian accused Credit Lyonnais of neglecting the management of the entire company during its trusteeship of MGM, and that many assets disappeared inexplicably.

In fact, both sides have their reasons. Rick Corian did a lot of things when he sold MGM. And the accounts of Credit Lyonnais were a mess during the period when they financed the acquisition of MGM and finally had to take over MGM. No one could figure out when some assets disappeared from MGM's books.

At this time, Ronald brought them together again and suggested that they ignore the messy accounts for the time being. He was very interested in the old brand United Artists acquired by MGM, and hoped that both parties could divest this asset and let him buy it.

In 1980, United Artists went bankrupt after the $4000 million production cost of Heaven's Gate, directed by Michael Cimino, was wiped out. Having just experienced the blow of the departure of the main management team and the establishment of Orion, the parent company of United Artists could no longer bear it and sold it to MGM under Kerkorian.

Although United Artists still maintained a certain degree of independence in production, its distribution team had long been absorbed by MGM, and the two companies shared a distribution team. As MGM's business conditions gradually weakened, United Artists rarely got any good film projects.

In movie theaters in America, the dark background of United Artists and the two capital letters UA at the beginning of the company logo are seen less and less.

"How will you pay?" The people from Credit Lyonnais were very concerned about Ronald's payment method. As the owner of MGM-United Artists, payment terms were very important. If they could get cash, it would be like getting a sum of money to ease their predicament, which was like the first sip of water for people in the desert.

"Cash..." Ronald said that he was not playing tricks. Two hundred million dollars in cash was a huge discount compared to the remaining value of Lianyi, which was about 5 million. But the problem was that apart from Ronald, there was no buyer that Lyon and Kerkorian could trust.

"We may not be able to agree to your request because we have reviewed MGM's operating conditions over the years and found that almost all of the original United Artists distribution team had resigned during Menahem Golan's tenure." Lyon really wanted to make this deal, so they tried to tell Ronald the truth.

They were not experts in running Hollywood companies, and they did not want the deal to fail because of intentional or unintentional lies involving a big expert like Ronald.

"It doesn't matter. What I need is the United Artists label. I know that all the distribution teams have merged with MGM or resigned. But my request is that if anyone is still willing to rejoin United Artists and return to an independently operated studio entity, don't stop them."

Ronald's real purpose was not to make any special demands on the distribution team, but to keep United Artists' seat on the MPAA board. To resume independent operation, United Artists must be a studio that integrates production and distribution.

The seven major Hollywood studios do not have a monopoly on the domestic distribution network. What they really care about is the international distribution network, because that is related to their international financing capabilities and their bargaining power when facing bank loans.

This is the main difference between a large studio and a small or medium-sized studio. Even if you don’t have a domestic distribution department or an independent studio, it is very convenient for you to contact theater groups in various places by yourself. It is not very difficult to set up a temporary distribution team.

Just like now, in addition to the seven major studios, even Harvey Weinstein's Miramax, which operates as a subsidiary within Disney, also retains a very capable domestic distribution team dedicated to distributing artworks.

New Line Cinema, American Film Corporation, and other established medium-sized production companies also have their domestic distribution teams in operation. There is also a Canadian-based company, Cinépix, which is also quietly building an American distribution network.

"I have no problem..." Lyon was satisfied with the offer.

"I have a question about United Artists' film library and intellectual property rights?" Kerkorian was unhappy. The reason why he acquired United Artists that year was to cover up the fact that he had sold many valuable assets of MGM, such as MGM's film library and the shooting rights of many series of movies.

"Why, do you want to take away some movie rights?" Ronald laughed. After Kerkorian moved into MGM, he only wanted to run the casino that had appropriated the MGM name. Filming was just a cover.

"At least, I can't go without any compensation..." Kerkorian said he also wanted something.