Chapter 350: Agree

[Chapter 350: Agree]

Michael Lynn hesitated for a moment, then quickly nodded, a wry smile appearing at the corners of his mouth. This matter was no secret; many old employees from New Line were aware of it.

At that time, Michael hoped Robert Shea would wait a little longer. New Line, although much less profitable than Firefly Films, was in good operating shape. Firefly, on the other hand, had little to show aside from the rights to a few blockbuster films; it was basically just an empty shell. Therefore, Firefly's need for New Line's well-established distribution channels far outweighed New Line's need for Firefly. If they could hold off for another year and a half, Firefly would surely offer a higher price.

After the release of Teenage Mutant Ninja Turtles, Robert Shea expressed his regret to Michael at a party. If he had followed Michael's advice and Teenage Mutant Ninja Turtles had been successful, New Line's value would have at least doubled. But now, it was too late for such talk.

"Eric, that's true," Michael agreed, nodding and making no attempt to defend himself.

Eric did not mind Michael's cold response. He smiled and said, "Michael, I think I can guess why you initially stopped Robert from selling New Line, but he didn't listen to you. Do you know why?"

Michael lifted his gaze to Eric, waiting for him to continue.

"Because I told him that time was short for us second-tier film companies. If we didn't seize the opportunity to expand to a sufficient scale, we would eventually face the fate of being swallowed by the big film giants. Last year, Columbia Pictures was acquired by Sony, and recently, MCA, the parent company of Universal Pictures, was also being bought by Japan's Panasonic. Meanwhile, Warner Bros. merged with Time Warner. This whole series of consolidations proves my point from last year."

"Eric, I don't quite understand," Michael finally spoke up.

"No, you definitely can understand," Eric replied. "You should see the purpose behind my acquisition of New Line. My original plan clearly defined Firefly's role. Robert was to manage operations and oversee film distribution, expanding Firefly's distribution network worldwide in the shortest time. I was to handle production. From the start, my goal was for Firefly to expand rapidly. But now, Robert has veered off course."

Michael lowered his head, unwilling to meet Eric's fiery gaze. The look in Eric's eyes carried the weight of authority, far removed from the youthful naivety of a twenty-something.

A scrap of paper had somehow landed on his knee, standing out starkly against his gray pants. Michael lightly lifted his arm to swat at it, but the paper stubbornly clung to the fabric, so he gave up.

"Michael, I know you and Robert have been very good friends for a long time, so I hope you can talk to him. It wouldn't be appropriate for me to confront this issue personally, as it might cause misunderstandings between Robert and me. But you're different; you've been partners for over a decade, so he should be more open to your words. If he focuses all his energy on what he should be doing, I might even transfer a portion of shares to him."

"It won't work, Eric," Michael said, finally raising his head. "I know Robert well after all these years we've worked together. I can't influence him. The reason Robert and I became friends is that I never threatened his authority. Put simply, I have no say with him."

Eric put away the sample box of tissues in front of him and pulled out a document from a nearby file cabinet, sliding it across the table to Michael. "Then you can take a look at this first."

The cover held no title, and Michael suppressed a flicker of expectation as he opened the first page.

It was a stock transfer agreement for a 2% stake, effective at the end of the year, with the selling party able to terminate the agreement at any time before that.

"Michael, I know you probably can't come up with cash to buy this 2% stake in Firefly, but I can help you secure a loan for it without any legal risks. You must have seen Firefly's financial statements from last year. As long as Firefly maintains its current growth, you could repay this loan with just two years of dividends, and then you'd be one of Firefly's shareholders."

Michael pressed his dry lips together, gripping the contract tightly. Although 2% didn't seem much, given Firefly's current profitability, he could expect nearly ten million dollars in dividends each year. This was several times more than his annual salary, and the stake itself was valuable. From Eric's words, he understood that this stake was essentially being given for free.

But there was no such thing as a free lunch. Accepting this stake would mean he would have to completely betray Robert Shea and side with Eric. Moreover, the clause about the agreement's effectiveness at year-end suggested that if Robert dug in his heels, Eric would push him out of Firefly, and Michael would then need to help stabilize the situation at Firefly to avoid severe repercussions from any desperate actions by Robert. That was clearly not an easy task.

"Eric, this isn't an easy thing," Michael said after several minutes of silence.

"Well, how about this," Eric nodded and pulled another file from the cabinet, handing it over: "What about this time?"

When he opened it, the conditions were almost identical, but the transfer amount had changed to 3%.

Michael forced a smile, trying to laugh but feeling the muscles in his face tense uncomfortably. He wanted to throw the document back at Eric in youthful outrage, but he was no longer the impulsive kid he had once been.

"Eric, I..."

"This is my bottom line, Michael. Jeffrey also only received 3%."

Eric didn't present another offer because, in his mind, Michael Lynn was worth just that much. He had done a thorough background check on Michael, knowing that he was Robert Shea's classmate at Columbia University, with a doctoral degree, and had entered the industry almost concurrently with Robert. With over a decade of experience in film distribution, Michael had the capability to succeed Robert's position after he departed.

Moreover, unlike the power-hungry Robert Shea, Michael didn't possess such ambition. Such a personality suited the role of CEO at Firefly, assisting Eric in its growth.

Film company executives often received stock options. Just as Eric had previously converted Jeffrey's dividends into a 3% equity stake, by selecting Michael, Eric was essentially offering a good price for what Michael would receive in the future.

Michael didn't hesitate long; he flicked the annoying bit of paper away from his pants and smiled as he raised his head to ask, "Eric, aren't you afraid I might ultimately refuse and tell Robert about this?"

"I rarely undertake anything without confidence," Eric said, seeing that Michael had made the decision he hoped for. With an easy demeanor, he continued, "If you tell Robert about this, you won't gain anything. I doubt Robert would hand over 3% of the shares for nothing. In that case, I would also have to risk a tumultuous upheaval at Firefly to get rid of both of you. Do you think you could recreate a New Line from that?"

Michael shook his head with a bitter smile. "I just think this would be too... cruel for Robert."

"The competition in Hollywood is inherently brutal. If I hadn't survived the chaos earlier this year, Firefly would already have become a subsidiary of the Seven."

Michael sighed, finding a pen on his desk. He signed the agreement. Eric quickly handed over the duplicate for signature, then took back his copy after Michael signed.

"Now, Michael, starting today, I expect you to utilize the next six months to seize control of all resources Robert has at his disposal. I believe Robert won't be overly guarded against you. I don't want Firefly's operations to halt in any way after Robert leaves. Of course, regarding the old New Line employees, I anticipate that with your promotion and generous dividends by year-end, they'll choose not to leave with Robert."

"I understand," Michael nodded, picking up the agreement. "Eric, if there's nothing else, I have to get back to work."

"Yes, Robert will likely make another movie next semester, so you have ample time to accomplish those tasks. I'll do my best to cooperate," Eric added. Watching Michael nod and leave, Eric finally let out a deep sigh of relief. This issue had finally been resolved.

His caution wasn't unwarranted; Miramax was a prime example. The departure of the Weinstein brothers due to disagreements with Michael Eisner caused Miramax's operations to stall, and after struggling for several years, Disney had no choice but to shut down and sell Miramax at a loss.

Even a behemoth like Disney could be at a loss with its subsidiary. Robert Shea held resources that were truly a match for Eric, especially in film distribution. Since their companies had merged not long ago, Eric had yet to involve himself in distribution matters. If Robert left suddenly, it was entirely possible that Firefly's distribution network could collapse without warning -- this was exactly what Eric wanted to avoid. But given Robert's current behavior, dragging this out was not an option for Eric. The longer they waited, the greater the potential backlash from Robert's dismissal would become.

*****

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