I am Hollywood

Chapter 379: Chapter 380: Target Disney



[Chapter 380: Target Disney]

"MGM had been around for almost seventy years now; the brand itself was its own value," Chris said, shaking his head. "But honestly, it wasn't really worth much anymore. So which company caught your eye? Columbia and Universal were definitely out of the running since the Japanese just purchased them and were gearing up for a big push. Warner Bros., forget about it; they're out of the question as well. That leaves only Disney, Paramount, and Fox. Well, Fox is also out of the picture, being supported by News Corp. Now, it's just Disney and Paramount. Disney is in a rapid growth phase. So, are you looking at Paramount?"

Eric countered, "Why not Disney?"

Chris wore a surprised expression. "Disney is currently in a fast rise, doing quite well. Not to mention, the CEO is Michael Eisner. After the incident earlier this year, while you two have seemingly reconciled, if you attempt to acquire Disney, Eisner will know what that means for him. He'll go all out to stop you."

Recalling how Paramount, once tethered to Viacom, had been overtaken by the less prominent Lionsgate and ended up dragging down the Viacom group, Eric shook his head. "Acquiring Paramount would indeed be fairly easy. I bet the shareholders would be more than willing to sell it to me. However, Paramount isn't a great choice; their development direction doesn't align with my plans. Their business is just too confined to film production. Disney, on the other hand, is different. Disney's all-encompassing operational strategy fits perfectly with my future expansion in Hollywood."

"If you insist, the amount you'll spend might exceed what the two Japanese conglomerates spent," Chris replied while he pondered his not-so-vast memories of Disney. "Disney's market value is roughly around $4 billion now. If you want to buy them, you can only go for a hostile takeover, which means a premium of at least 50%. It's tough to acquire Disney without at least $6 billion."

"If I don't strike now, in a few years, buying Disney will be out of the question," Eric stated. With the rapid growth of the American economy and the rise of Hollywood on a global scale, the market values of major film companies increased by over 30% a year. Even the struggling MGM eventually sold for over $5 billion a decade later. In memory, three years later, Viacom bought Paramount for $10 billion, and the current Paramount could barely reach a price comparable to that of Universal's parent company, around $6 billion max. While Barry Diller had some influence in that deal, it also reflected the soaring market values of the major studios as Hollywood expanded.

Although with patience, Firefly's potential suggested that in five years, it could stand shoulder to shoulder with any of the major studios, Eric also knew that if things continued as they were, all seven major studios would have integrated with media conglomerates by then.

Of course, during this process, Firefly would inevitably face 'coercion' by media groups, but that wasn't what Eric wanted.

What he aspired to be was a master, not a vassal. So, since there was an opportunity, he knew he had to acquire a major film company as the most significant bargaining chip to eventually evolve into a media conglomerate rather than be coerced. In his mind, the only company that had transitioned into a media group solely through its own strength was Disney; Time Warner could only count as half.

"If you want to buy Disney, you'll have to start preparing right now," Chris contemplated and said. "Our first step is to buy Disney stocks to gain a voice in their board. After that, because we wouldn't need to pay everything at once, $3.6 billion in cash would suffice. If necessary, we could even secure financing. With Firefly's results over the past couple of years, I believe any investment bank on Wall Street would love to get in on this deal. Many of Disney's shareholders would probably prefer equity over cash..."

As Eric listened to Chris' analysis, he scribbled something on a notepad resting on the coffee table. By the time Chris finished speaking, Eric had written out a check and handed it over, saying, "Let's not talk about that for now, Chris. This is your bonus."

Chris glanced at the check and quickly pushed it back. "That's too much."

"This is what you earned. If it wasn't for your help during the oil crisis, I wouldn't have made such profits," Eric insisted, blocking Chris' attempt to return the check.

"I really can't take that much. I know how much my contributions are worth," Chris firmly shook his head, adding, "And if Dad found out, he wouldn't agree."Nôv(el)B\\jnn

Thinking of Jeffrey, Eric contemplated. "How about this? I'll convert the amount into equity in Firefly Investment, say 3%, the same percentage as your father's stake in Firefly Films."

Chris thought it over and eventually nodded.

Currently, Firefly Investment mainly held a 23% stake in Cisco, and at Cisco's current valuation, that 3% wasn't much, considerably less than the cash Eric had initially offered.

But Eric knew how massive Cisco would grow in the future, so he didn't feel he was giving too little. Besides, in the future, he could always increase Chris' equity stake. If he gave too much now, what would happen when he couldn't provide more later?

While Chris had a reserved personality and their relationship was solid, no one could predict what might happen with the passage of time. In the past, Michael Eisner had transitioned from a brilliant leader who brought Disney to its pinnacle to a stubborn tyrant who ultimately lost the confidence of the board and was disgracefully ousted.

"Since you've just laid out some plans, why don't you take charge of this? Start acquiring Disney stocks from now on," Eric said, chatting with Chris while his mind drifted to that unresolved sore spot, the project Cutthroat Island.

If only they could throw Cutthroat Island at Disney. That summer, Disney had already lost over $100 million, and they'd likely struggle to recover from that loss through the second half of

the year.

Throwing Cutthroat Island at Disney could result in another $100 million loss for them. Two consecutive years of losses would significantly weaken Michael Eisner's standing at Disney, thereby reducing his control over the board. When the acquisition plan initiated, everything would become much simpler.

However, Michael Eisner wasn't an idiot, and pulling this off would be very tricky.

As Eric thought about this, he quickly recalled Robert Shea, who had been close to Michael Eisner since the turmoil earlier that year. Perhaps that was a potential avenue to explore.

*****

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