Chapter 897: Actions in the film industry

After Rhodes Saxon left, Xia Yu did not plan to visit Ronald Reagan right away. He had to wait until Rhodes Saxon had demonstrated his talents and changed Ronald Reagan's opinion before going. Only then could he most confidently push Rhodes Saxon up.

The most urgent task now is to seize the time to quickly improve the layout of the film and television industry.

After reading so many days of data, Xia Yu has understood the current structure of the American film industry.

There are still eight Hollywood giants, and United Artists has not yet been acquired by MGM, and MGM and Columbia have not been acquired and integrated by Sony.

Because the ranking of the eight Hollywood giants can easily change due to a single movie, the ranking of the Hollywood giants is not fixed.

For example, Universal Pictures, although the oldest, sometimes jumps to the top, sometimes it has been investing a lot, and even once fell to the second-class citizens of Hollywood, but now backed by the powerful MCA Group, and signed a lot of influential Hollywood directors, now in the first tier.

In general, the current Hollywood production field can be divided into two tiers.

The first tier is Warner Bros., 20th Century Fox, Paramount Pictures, Universal Pictures, and Columbia Pictures Industries.

Although there are differences in strength between the five, they are all capable of competing with each other because they are not just limited to film production, but also have complete distribution channels, are involved in other related industries, have strong risk resistance capabilities, and have a great influence.

The second tier includes Disney, MGM and United Artists.

Disney's trump card is animated films, but the output in recent years has been really low. As for family films, they have long been unpopular with audiences, but Disney has not been keen to realise the shift in market sentiment in a timely manner, and has naturally lost its audience groups of young people and adults.

Furthermore, the founders of the Disney company died one after the other. Roy Disney also died in 1978. At this time, the president of the Disney company was Walt Disney's son-in-law, Ray Miller. Only a small number of members of the Disney family are in the company. Nowadays, the company is seriously divided and has not found a way out. Therefore, the influence of the Disney company in the film industry is declining.

Xia Yu saw that the report stated that the income from Disneyland and its sister project Disney World accounted for almost three-quarters of the entire Disney company's income, barely keeping the production department afloat. This shows the predicament of the Disney company.

And MGM?

Once the undisputed number one in the golden age of Hollywood, it produced 'Gone with the Wind', created 'Tom and Jerry', initiated the establishment of the Academy of Motion Picture Arts and Sciences, and launched the Academy Awards. To date, MGM has won the most Oscars of any Hollywood studio. It can be said that MGM is a symbol of the golden age of Hollywood.

However, with each successive change of ownership and acquisition, MGM has been tossed around and gradually dragged into the mud.

In particular, after it was bought by Las Vegas gambling magnate Kirk Kerkorian as a money laundering tool in 1970, MGM's development took a sharp turn. Kirk Kerkorian sold MGM twice and bought it back twice.

Last year, Kirk Kerkorian even publicly announced that MGM had become a hotel company, and the film business only accounted for about 3% of the entire film market.

Once the number one giant in Hollywood, it has fallen to such a state that Xia Yu can only marvel at Kirk Kerkorian's prowess.

As for United Artists, the film company founded by Charlie Chaplin to escape the shackles and exploitation of the major film studios, it was taken over by Wall Street capitalists during the Great Depression, and has since changed hands several times, with its shares widely dispersed.

And because United Artists is the purest production company, its distribution channels can be said to be the worst among the eight giants. Therefore, in recent years, after continuous investment failures and losing its influence in the circle of independent producers, its influence has now been greatly weakened. At present, United Artists' market share in the film market is also about the same as MGM's, about 3%, which is pitifully low.

The report analysed that most of United Artists' assets today are virtual assets, and the most valuable ones are its huge film library and the copyright of the James Bond series.

And since United's current shareholders are basically financial investors from Wall Street who don't understand movies, the company's senior management's knowledge of investment far exceeds their knowledge of the film industry, so the acquisition value is very low. Even if an acquisition is made, a complete overhaul is required.

What Xia Yu also knows, but what is not written in the report, is that if no interference is made, MGM will acquire United next year in 1981, and from then on the eight major Hollywood giants will become seven, and United will gradually disappear into history.

In addition to the current eight giants of Hollywood, there are other players in the American film market, such as Lucasfilm, which has relied on the Star Wars series in recent years and is no less influential than United Artists. However, its distribution channels are completely dependent on 20th Century Fox, and most of the copyright to the Star Wars series is in the hands of 20th Century Fox. Lucasfilm simply cannot dislodge United Artists.

Therefore, Xia Yu doesn't really care about film companies other than the eight major Hollywood giants. With his current strength, film companies outside the top eight are not worth his time.

In the entire film industry, in addition to production and distribution, there are two other important aspects: talent management and cinemas. These are also areas that Xia Yu needs to focus on.

In the field of celebrity management, CAA, the future Hollywood overlord, had only been established for less than five years at this time. Although it had already shown signs of rising, it was still just a small player, having signed only a few big names. The company's annual revenue was only 15 million US dollars, and its net profit was less than 5 million US dollars.

Today, in this field, Universal Pictures' parent company MCA Group is the undisputed leader. CAA's later world-famous one-stop service model of "actors + directors + screenwriters + behind the scenes" was made mainstream by the MCA Group.

Today, CAA is not even in the top ten, let alone the top five, in the field of American celebrity management.

Finally, there is the cinema market.

At this time, the American cinema market was in chaos. Forced by the Paramount Act, the Hollywood giants could not own cinemas. Although many of them secretly invested in some cinemas or reached cooperation with some cinemas, they were all handcuffed and unable to deliberately manipulate the cinema market from behind and carry out large-scale integration. The cinema market is still far from the era of oligarchy.

In later generations, the three cinema giants of North American Emperor Entertainment, AMC and Cinépolis once accounted for more than 50% of the number of cinemas and screens in North America, and more than half of the box office. The power of the cinemas was not ordinary.

However, according to a survey report, there are now more than 10,000 cinemas and 17,000 screens in North America, and the number of cinemas and screens of the top five cinema chains combined accounts for less than 20% of the market!

The chaos in the cinema market is exactly what Xia Yu wants to see, because it means that integration will be very difficult. As long as you are willing to spend money, quickly and secretly enough, you can acquire and integrate a huge cinema company at a tremendous speed.

Based on the information Peter Lynch collected, Xia Yu quickly came up with a plan of action.

On the movie company side, he would do his best to acquire MGM and United Artists, which would be the easiest to acquire, and integrate them to compete in the movie industry again. He would even make preparations to acquire the Disney company, whose brand value was seriously underestimated.

For the brokerage company, the focus was on the future. They used capital to pry open the doors of CAA and make Michael Ovitz their own.

In the cinema sector, the simplest and most crude method was used to create a cinema chain that spread across the United States.

And considering that Ronald Reagan had not yet relaxed his policies on the film industry, in order not to touch the Paramount Act, the cinema company had to be set up separately.

After making the decision, Xia Yu immediately went to Polaris Capital to form a team to acquire United Artists and The Walt Disney Company.

At the same time, he arranged for a shell company to be registered offshore by Xiangjiang Universal Cinema Company, and this shell company would then commission North Star Capital to acquire the cinemas.

Next, he commissioned Goldman Sachs to acquire MGM Studios from the gambling king Kirk Kerkorian. As for the MGM Hotel of the same name, it was not within the scope of the acquisition and certainly could not be bought.

Finally, Xia Yu personally went to Hollywood with some subordinates to meet the uncrowned king of Hollywood.