Chapter 383: Galaxy and NBC
[Note: For those who are concerned of the chapter count compared to the original, this chapter is actually 428th on the original novel.
While translating, I deleted some parts of chapters and after that , if the content is not enough, I include the next chapter as well.
By doing so, as of now, there is a gap of 45 chapters.]
"Wait, did you just say General Electric's chairman Jack Welch invited me?" In the morning, inside his Upper East Side townhouse in Manhattan, Arthur Smith lay in bed, having just received a call from his assistant.
"Yes, Mr. Welch invited you to Long Island for the weekend!"
"Alright, got it," Arthur responded, although he didn't know why Jack Welch wanted to meet him. General Electric had investments in media, so was he interested in Galaxy MGM?
"Ah," Arthur sighed as he put down the phone. Moments later, Jennifer Aniston, who had been under the covers with him, came out looking flushed.
Lying on Arthur's chest, she breathed heavily.
"Arthur, was there something important just now?"
Feeling Jennifer Aniston's chest on him, Arthur began to caress her smooth back. "My assistant just informed me that Jack Welch, the chairman of General Electric, invited me to his Long Island mansion for a party!"
"General Electric, huh," Jennifer Aniston knew about them since they became the highest valued company in the U.S. last year, nearly worth 90 billion dollars.
"Tomorrow, let's go to Long Island together and meet Jack Welch," Arthur was intrigued.
After all, GE currently held the highest market valuation, followed by AT&T, ExxonMobil, Coca-Cola, Altria Group, Walmart, Merck, IBM, and Procter & Gamble.
This year, IBM became the first technology company to enter the top 10 U.S. market caps, but Microsoft and Intel were developing quickly and would soon make the list.
Jack Welch, 59 years old, had been GE's chairman and CEO since 1981. He had grown the company's market value from 13 billion dollars to 90 billion dollars, making it the largest enterprise in the U.S.
In Long Island, Brentwood, at Jack Welch's mansion, there weren't many guests. Arthur showed up with the stunning Jennifer Aniston.
"I'm heading over there for a bit," Arthur told Jennifer Aniston, separating from her as the host's butler invited him to the study.
"Go on," Jennifer Aniston kissed Arthur, "I'll wait for you outside!"
Arthur followed the butler to the upstairs study, where, besides Jack Welch, another man was present, Bob Wright, chairman of NBC.
"Arthur, Bob needs no introduction, right?" Jack Welch invited Arthur to sit down.
"Good evening, Mr. Welch, Mr. Wright is quite familiar with Hollywood," Arthur embraced Bob Wright.
Bob Wright chuckled, "Galaxy's broadcast rights aren't cheap!"
After the butler served three cups of coffee and left, closing the door behind him, Jack Welch began, "Recently, Disney refused the decision to co-operate with GE on NBC. They've started talks with Capital Cities/ABC."
With new media financial legislation passed, TV and movie company mergers had become inevitable.
TV stations, being the stronger party, always liked to take the lead.
Arthur took a sip of coffee, "Yes, I know this. It seems Sid Bass and the other shareholders didn't agree to buy only half the shares. Disney's shareholders want to fully acquire a broadcast network. Even if Michael Eisner is willing, he has no choice!"
Michael Eisner held less than 5% of Disney shares, too little to influence such a large acquisition. The shareholders meeting could support him as CEO, but with opposition from shareholders, he couldn't proceed.
Bob Wright glanced at Arthur, "Galaxy has invested heavily in cable TV over the past few years, showing definite interest in broadcast networks. But the foundation and other preparations are insufficient, making it hard to realize!"
Bob Wright and Jack Welch exchanged looks. "If Galaxy merges with NBC to form a new media group, the development prospects would be tremendous."
"Merge Galaxy with NBC?" Arthur gave them a meaningful look. That proposal was indeed constructive!
"What are you suggesting?" Arthur figured the two couldn't ignore Galaxy's momentum, while NBC's growth wasn't stellar.
Jack Welch smiled, "NBC and Galaxy merge to form a new company. The original Galaxy stakeholders would hold 49% of shares, and GE would hold 51%. The new company would be co-led by Bob and you. Bob would be the chairman and you the CEO. Company development and operations would still mainly be under your control!"
Arthur remained unmoved, "Gentlemen, Galaxy's revenue last year exceeded 3.5 billion dollars, with Hollywood's best profit margins."
"Of course, Arthur, GE would provide you with a substantial amount of funds as compensation. The exact amount will surely satisfy you," Jack Welch knew that Arthur Smith's approval was crucial; without his agreement, nothing could proceed.
Arthur shook his head, "Galaxy's controlling stake won't change. Everyone knows how NBC under GE is performing lately. At this stage, aside from theaters and video tapes, the fastest-growing business in Hollywood is commercial cable and satellite TV. While the robust marketing mechanisms of broadcast networks are indeed beneficial for film groups, content is fundamental!"
Otherwise, why would Paramount and Warner Bros. create UPN and The WB networks themselves?
When a film company and TV station merge, the leading party must be the film company. The crucial role of films can't be replaced.
"Arthur, won't you reconsider?" Bob Wright was keen on merging NBC with Galaxy. With Galaxy MGM's strong content production capabilities, NBC's growth could skyrocket.
NBC's extensive television network could promote and license Galaxy MGM's content more effectively.
Arthur smiled, "I actually have a thought: Galaxy could acquire NBC through a mix of cash payment and stock swap. GE would still be a significant shareholder in Galaxy, and with NBC's support, Galaxy would dominate Hollywood quickly!"
"Whoa," Jack Welch and Bob Wright were surprised. Did Galaxy plan to acquire NBC now?
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