Chapter 731: The Gap

[Chapter 731: The Gap]

"Becoming someone like Buffett is indeed tough. In reality, for most people, if they could attain his level of status and wealth, it would be nearly impossible for them to maintain the same undivided focus on one thing for decades," Eric said, gazing at Caroline's lovely face. "However, I see certain qualities in you that are similar to Buffett."

Ordinary people often grapple with too many distractions and desires, which can actually become the biggest obstacle preventing someone from making progress.

Yet, Eric hadn't seen any of that in Caroline. From their first meeting two years ago until now, her simple and pure nature hadn't changed much. Coupled with her exceptionally bright mind, Eric believed that if Caroline dedicated herself to developing into an investor like Buffett, she would undoubtedly achieve remarkable success in the future.

Feeling a bit shy from Eric's praise, Caroline wasn't as familiar with Buffett as he was; she didn't see the similarities he pointed out. Fidgeting with the hem of her professional outfit under the desk, she hesitated to ask and finally said, "Eric, if there's nothing else, I need to get back to work."

A grin spread across Eric's face as he teased, "Don't you want to chat with me?"

Although she knew Eric was joking, Caroline couldn't help but shake her head seriously. "But it's work hours now."

Eric found her somewhat old-fashioned demeanor amusing and continued, "You're my assistant. Anything I need can become part of your job, including chatting."

"That's not how it works," Caroline shot back, blinking her eyes.

But as she protested, thoughts of Kelly -- a capable and charismatic senior colleague of hers -- suddenly popped into her head. She recalled the playful affection displayed between Kelly and Eric, as well as their not-so-hidden relationship, which sparked a rather absurd notion in her mind: was that also part of a female assistant's job description? If so, what if Eric proposed...

As this thought deepened, Caroline's cheeks flushed bright red without her realizing it. She stole a quick glance at Eric but quickly looked away.

Noticing Caroline's inexplicable blush, Eric chuckled and asked, "What naughty thing are you thinking about?"

"N-Nothing," Caroline stammered, shrinking her neck before standing up. "I'm going back to work now."

With that, she turned and hurriedly left Eric's office, as if fearing she might be restrained by a wicked overlord if she lingered a second longer.

Ah, daring to be so negligent with her boss, Eric mused, maybe it was time to dock her pay as a punishment.

Amused by his own thoughts, he pressed the call button for the desk phone and instructed the secretary outside to deliver the notes Caroline had left on his desk.

...

In July, most companies started tallying up their revenues for the first half of the year, and Firefly was no exception. With the rapid recovery of the American economy, Firefly's businesses -- including films, television, theme parks, and retail stores -- were experiencing a strong growth compared to the same period last year. Though the relevant data was still being compiled, it was already certain that the Firefly Group's overall revenue for the first half of the year would exceed $10 billion.

Meanwhile, Fortune magazine released its first global 500 rankings in July, previously only counting American companies' top 500.

Despite enduring a bubble burst in the early '90s, Japan still claimed six spots in the top ten of the global 500. General Motors, ranked first among American companies, held only the fifth position on the list, with the top four entirely comprised of Japanese conglomerates. Firefly's annual revenue of around $20 billion seemed rather insignificant when compared to the leading Mitsubishi Corporation's $175.8 billion.

While Eric pondered the vast gap between his company and these world-class corporate giants, he didn't belittle himself. He believed that once all companies within the Firefly system grew to full potential, they would undoubtedly become behemoths that everyone else would look up to. With rapid advancements in high technology, he knew that day wasn't far off.

...

At the Liberty City Shell Manor, Eric lounged on a sofa by the curtain wall, flipping through Fortune magazine when Natasha walked in with Amy Pascal. After preparing coffee for the two of them, the twins quietly headed upstairs. It was July 9th, with the Yahoo annual meeting starting the next day. Eric was soon flying to Boston, and Drew and the twins were upstairs helping him pack.

Amy settled on the opposite sofa, took a sip of her coffee, and glanced at the magazine in Eric's hand, saying with a smile, "Eric, I think you'd prefer Forbes more."

Eric understood that Amy meant the Forbes billionaire list. "Keeping an eye on those often makes it easy to lose ambition. I need to face reality and motivate myself."

Amy shook her head, exclaiming, "You've already made yourself someone others aspire to. It's hard to imagine where you'll be in the future."

"Ultimately, I don't have a habit of stopping to wait for others," Eric smiled and asked, "Drew said you talked to Kevin Costner about the Mission: Impossible sequel yesterday. How did it go?"

The $175 million film Waterworld had premiered two days ago, bringing in only over $6 million on its opening day. Although this number was similar to that of Forrest Gump, the weight and reputation of both films were worlds apart. Adding to that, Waterworld had received scathing reviews and it faced fierce competition from both currently released and upcoming blockbusters, making its future look bleak.

After the dismal opening day box office, Kevin Costner's last shred of hope shattered. He proactively reached out to Flower Films, wanting to initiate the Mission: Impossible sequel to maintain his popularity.

"We only had preliminary discussions," Amy replied. "I hope to secure contracts for both sequels at once, but Kevin only wants to sign for one and they aren't willing to make significant concessions on the salary."

Even with the flop of both Wyatt Earp and Waterworld, Mission: Impossible had just tasted great success last year and was still riding high on its popularity. It wasn't surprising that Kevin was reluctant to compromise too much.

"But the initiative is still in our hands, so let's take it slow," Eric said after hearing her out.

Amy nodded and continued, "I ran into Joel Silver yesterday. He asked me if last year's agreement still stood."

Amy's tone held a hint of confusion, clearly indicating that Joel hadn't explained things to her fully.

Last year, at the wrap party for True Lies, Eric encountered Joel Silver, who happened to be a former producer for The Matrix. Eric had thought about bringing Joel over to oversee that project. He briefly outlined the situation to Amy, saying, "Though Fair Game failed, it's undeniable that Joel Silver is highly skilled at making action films. I think he'd be perfect for handling The Matrix series."

After hearing that, Amy shook her head, "Eric, I don't think it's a good idea."

"Why is that?" Eric asked, puzzled.

"Do you remember Peter Guber and John Peters?"

Eric nodded. After leaving Columbia, the two faded from the Hollywood scene. Very few were willing to invite these two spendthrifts back to be producers. However, Hollywood still remembered their 'illustrious record' of flushing away over $2 billion of Columbia's assets.

Amy continued, "Sony had initially poached Peter Guber and Jon Peters from Warner Bros. to serve as CEO and president at Columbia. They were under contract with Warner at the time, but Sony paid $200 million to acquire their production company, who were still linked to Warner. Later, they also had to compensate Warner $800 million. Joel Silver's connection with Warner is even tighter; his production company is also affiliated with Warner, and he's still under a long-term contract. For years, he hasn't produced any films outside of Warner. Warner is currently in a tough spot, and if Firefly attempts to poach him, they certainly won't just let him go without a fight. The cost for Firefly won't be any less than what Sony paid."

Eric begrudgingly shook his head after listening to Amy. While he wouldn't mind paying Warner a reasonable termination fee if Joel Silver could transition to Firefly, he wouldn't pull a stunt like Sony did.

Although the summer blockbuster season hadn't ended yet, Eric thought Warner's strategy of substituting quantity for quality to improve performance was bound to fail.

They had released three out of five planned films, but aside from Batman Forever, which performed decently, both Fair Game and the recent Waterworld had bombed.

Though they still had Arnold Schwarzenegger's Eraser and the star-studded Heat coming out in the next two weeks, Eric recalled that neither film had particularly high box office potential.

The box office results for Eraser were likely to be similar to Fox's Die Hard with a Vengeance, belonging to the type of old-school action films that perform modestly domestically and a bit better overseas. While Heat was a classic, its nearly three-hour runtime would vastly limit its box office potential.

Considering none of the five movies had that overseas blockbuster appeal and Batman's international box office allure had dimmed compared to North America, the combined global total they could hope for seemed to be around $1 billion. This figure was just a tad above Firefly's Jurassic Park 2's global earnings.

With its outstanding reputation and accumulated fanfare from the first film, Jurassic Park 2 might not reach the first film's billion-dollar mark but it would be very close. Moreover, the total production and marketing cost for Jurassic Park 2 was approximately $150 million -- its box office alone already ensured massive profits for Firefly.

In contrast, Warner's average production cost was already nearing $100 million, with total production and marketing expenditures hitting a staggering $700 million. Securing around $1 billion in global box office revenue would be far from enough to cover those immense costs.

Compared to last year's minor loss of $90 million, Warner's losses this year would only deepen due to the drain from their movie business.

Perhaps it was time to test if there was any possibility of the Warner board splitting its business.

With the second-largest cable operator in the U.S., several well-known cable channels had varying degrees of stakes with Warner. That was a sector where the Firefly Group had gaps.

"Eric, what are you thinking?" Amy's voice interrupted his train of thought.

Snapping back to reality, Eric offered an apologetic smile. "Nothing, let's talk about MGM."

They had touched on a few topics casually earlier, but Amy's main purpose for being there today was the acquisition of MGM by Flower Films. Taking advantage of Eric's break from Los Angeles, Amy made a special trip to discuss these matters with him.

Amy nodded, refraining from asking why Eric had been distracted, and said, "The potential offers from our trio -- Viacom, Kirkorian, and us -- hover around $1.5 billion for MGM. After the rumors about Flower Films and DreamWorks possibly ending their collaboration with MGM, the other two haven't put in new offers. Both Viacom and Kirkorian's executives reached out to me. They hope to meet with you as they know Flower Films lacks sufficient funds for acquisition, so they're interested in collaboration. Credit Lyonnais had put down an offer of $1.8 billion, and everyone is currently at a standstill."

Eric quietly listened to Amy and calculated quickly in his mind.

Even if the final acquisition price remained around $1.5 billion, it wouldn't be easy for Flower Films to scrape together the necessary funds.

He had planned for Firefly Group to set aside $300 million to buy out the overseas, video, and television rights for Forrest Gump. The income from the Mission: Impossible released last year would serve to repay previous film financing, while the upcoming Night at the Museum had been collateral for regaining the Marvel superheroes' rights, yielding limited revenue for Flower Films. Besides, the earnings from Night at the Museum wouldn't be settled until the end of the year.

In total, the funds available to Flower Films were limited to the domestic box office receipts from Forrest Gump and the buyout revenues from Firefly -- roughly around $400 million -- not nearly enough for the $1.5 billion target.

*****

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