Chapter 675: Future Affairs

[Chapter 675: Future Affairs]

The accusations against Michael Ovitz made headlines across all the major media outlets the next day. As a former key figure who co-founded CAA and significantly raised production costs in Hollywood through bundling practices, the controversy surrounding the claims of Ovitz's 'incompetence' was highly discussed.

The outside world struggled to grasp what exactly had transpired in Hollywood; they could only rely on the media to understand that the internal conflicts Universal had long tried to hide had finally erupted. Michael Eisner's previous denials of any discord with Ovitz had now been confirmed.

While most could only see the surface of events, Eric managed to learn the detailed backstory that very evening. Eisner was eager to leverage the Seagram acquisition of Universal to eliminate Ovitz from the studio and solidify his own power. To minimize the cost of firing Ovitz, Eisner concocted a plan to have Panasonic cover Ovitz's severance pay, even preparing a document to this end.

Panasonic, Sony's fierce rival in the electronics industry, was not willing to play the fool as Sony had. Instead, they leaked the documents that Eisner had intended to use as negotiation terms to the press. While Panasonic didn't issue any public comments, their actions conveyed a clear message: "This is your Hollywood internal squabble, don't expect us to pick up the tab."

Panasonic adopted a "we're out of here" attitude, leaving Hollywood in chaos. The document alleging Ovitz's incompetence was filled with Eisner's personal biases, but the facts presented were not fabricated. After verifying the authenticity, Sony immediately abandoned any plans to place Ovitz in charge of Columbia. Just the mention of Ovitz's previous $2 million office renovation at Universal was enough to dissuade Sony, which was still reeling from Peter Guber's extravagant spending.

For Universal, the irreconcilable conflicts between its two leaders tore the organization apart, leading to the collapse of the near-final negotiation between Panasonic and Seagram. Both parties understood that without resolving this matter, the final deal would be elusive.

Having been splattered with 'dirty water' by Eisner, Ovitz realized that finding another position would be incredibly challenging, with hopes of returning to the agency business appearing dim. He reacted like he did during his phone outburst at Eisner, showing up at Universal every day as if he truly intended to 'bind' himself to his office desk. However, communication between him and Eisner had completely broken down.

With a golden parachute agreement to protect him, Ovitz resembled a prickly hedgehog at Universal, making it nearly impossible for anyone to 'bite.' Although Eisner felt a tinge of regret for hastily releasing the documents, he couldn't concede fault, as admitting wrongdoing typically came with the expectation of taking responsibility, often leading to resignation for a leader of a large company. This was a conclusion Eisner was unwilling to face. Thus, during subsequent interviews, he completely abandoned any claims of his steadfast friendship with Ovitz and publicly affirmed the correctness of the accusations.

...

After spending Thanksgiving amidst the media uproar, Eric hurried back to New York to finalize post-production work for the upcoming Victoria's Secret Fashion Show airing on December 6. Despite this, his gaze remained fixated on the City of Angels on the West Coast.

A few years prior, Eric would have found himself merely a spectator to all the chaotic happenings in Hollywood. However, now he contemplated how to further interject himself into changing the landscape of the industry. Firefly Group had reached new heights, and Eric's plan was to gradually seize control of all of Hollywood. This seemingly far-fetched ambition wasn't as unrealistic as it appeared; he had sufficient financial resources. Even without considering the assets held by Firefly Investments, the media branch of Firefly Group boasted approximately $2.5 billion in free cash flow this year from two asset sales and operational profits, giving the entire group three times that in operating cash flow.

With over a ten billion dollars in cash reserves, if Eric desired, Firefly could package and buy Columbia and Universal from the Japanese hands. However, should Firefly indeed pursue this route, it would certainly incite unease and wariness throughout Hollywood and trigger antitrust investigations. Thus, everything would need to be approached gradually and subtly. On this front, Eric had a key advantage: time. Even if gaining control of Hollywood took a decade, he would still only be thirty-five, an age at which many people were just starting their careers.

...

While Los Angeles enjoyed its year-round sunshine, the East Coast welcomed its first significant snowfall after Thanksgiving. Early that morning, a black Chrysler pulled up outside a high-rise apartment adjacent to Central Park on Sixth Avenue. Kelly stepped out with documents in hand, instructed the driver and her assistant briefly, then hurried with her head tucked low onto the snow-laden street, entering the high-rise and reaching Eric's penthouse door.

Taking a moment's hesitation before pressing the doorbell, her assistant produced a key and opened the door.

The cold light of the morning sun filtered through the glass walls, filling the spacious living room, which was cluttered with disorganized files. The laptop sitting on the coffee table was still lit, presenting a chaotic scene unbefitting such a luxurious penthouse overlooking Central Park. Kelly almost felt as if she had stepped into a mad scientist's lair.

After shrugging off her heavy coat and boots, Kelly changed into slippers at the entrance and entered the living room, noticing Eric curled up beneath a blanket on the couch, fast asleep. The sight brought her both amusement and confusion; this man, who sometimes demanded high standards of living like a gentleman from an affluent family and exhibited clear signs of obsessive cleanliness, could also be so casually laid-back like a vagabond, seemingly content if he could just eat and sleep well.

Quietly tiptoeing over to Eric's side, Kelly gently placed the documents on the coffee table and carefully brushed his disheveled hair aside, smiling tenderly. She wanted to lean in and kiss him but feared waking him, so she instead stood up and headed for the kitchen.

Silently cutting bread and placing it in the toaster, she warmed up some milk, and just as she was about to fry an egg, she felt strong arms wrap around her from behind.

Turning her head, Kelly let Eric place a gentle kiss on her cheek and smiled, "You're awake; you should wash up. Breakfast will be ready soon."

Eric lovingly inhaled the scent of her neck before letting her go, wandering off toward the bathroom.

After a little while, Kelly set the breakfast in front of Eric and sat down opposite him before asking, "Why did you fall asleep on the couch last night? What if you catch a cold?"

As Eric picked up his utensils, he replied, "I was thinking about some things and dozed off on the couch without realizing it."

Curiously, Kelly asked, "Was it something important?"

He nodded but then inquired, "Any news from Hollywood today?"

Kelly agreed, saying, "Yes, Michael Eisner appeared on Larry King Live yesterday, and this time he accused Michael Ovitz of having personality defects and mental illness. I really don't know what he's thinking. If Ovitz were as incompetent as he claims, how could he have the current CAA?"

Eric nodded but made no comment, leading Kelly to continue, "Also, I heard from Columbia that their financial audit has concluded. You won't believe this, but they're facing a $2.1 billion asset write-down, the largest loss in Sony's half-century history. Although the news hasn't been made public yet, it's all anyone in Hollywood can talk about. Everyone's wondering if Sony is going to sell Columbia."

This time, Eric decisively shook his head, saying, "They won't."

Kelly showed a puzzled expression as Eric sipped some milk, then explained, "I reviewed the material you gathered on Nobuyuki Idei last night. We all know he's set to become the CEO of Sony Group; do you know what his management philosophy is?"

Although Kelly had been responsible for compiling the Idei materials, she hadn't paid much attention to them. She asked, "What's that?"

"Idei's managerial philosophy is to make Sony move towards digitalization and informatization. Simply put, he plans to shift Sony's future focus from being purely about electronic products to encompassing entertainment media, records, and even the internet sector."

Kelly blinked in confusion and replied, "But Sony's foundation is portable music players, VCRs, and gaming consoles. If they do that, won't it...?"

Eric chuckled and nodded, "You guessed it right. If Idei stubbornly pushes this approach, it will undoubtedly lead to Sony's decline."

As he spoke, Eric reminisced about the alternate timeline where, after the new century, Idei's neglect of Sony's core strategy resulted in the company consistently lagging behind competitors in MP3 players, personal computers, and mobile phones, leaving Sony with only high-end camcorders and the PS console to show for itself, still facing fierce competition from Microsoft's Xbox.

However, Kelly did not seem to possess Eric's certainty. She countered, "I don't think Sony would be that... foolish. Even if Idei wanted to pursue that path, wouldn't there be other executives opposing him?"

Eric explained, "The board composition of Japanese companies differs greatly from Western firms. Board members in Japanese firms are mostly internal management. Coupled with the cultural inclination toward obedience, opposition to higher-ups' decisions is rare. If there were opposition, it would've shown during Akio Morita's $5.5 billion acquisition of Columbia. However, I believe that with Sony facing this $2.1 billion loss, Morita, as the founder, is bound to step down from the chairman position. Thus, once Idei takes over, there won't be anyone to challenge his managerial strategies. Since Idei wants to digitize Sony, he certainly won't sell Columbia; for us, that presents a golden opportunity. The Japanese, unwilling to sell, will need a partner, and Firefly can continue to reap benefits from Columbia. I've already considered this carefully last night, and in the coming days, I'll discuss it further with Katzenberg. The fact that the Japanese remain will only benefit us. We need to actively drop some bait to keep them here longer."

Kelly smiled, seemingly hit by a sudden realization. After a moment's hesitation, she pointed out, "Eric, what you just said about the composition of Japanese boards is quite similar to Firefly's board."

Eric noticed Kelly's cautious demeanor and chuckled, saying, "I considered that issue last night as well."

Kelly looked surprised and asked, "What was the result?"

Eric shrugged, "The result is that I'm not even twenty-five yet, so I don't need to think that far ahead."

Kelly paused, and then laughter escaped her lips.

Indeed, Eric was still under twenty-five, not seventy-five like Morita. Firefly's growth momentum showed no signs of problems, and Eric didn't need to prepare for this area so prematurely.

"Actually, I'm also thinking about how I can maintain clarity now, but in ten or twenty years, I might stubbornly push for something ridiculous like overpaying for Columbia. And I realize that I'm starting to show tendencies in that direction already, so I've had a good self-reflection on it."

Kelly was surprised again, asking, "Really?"

"Qualcomm, do you remember?" Eric mentioned.

Kelly nodded, "You haven't brought it up lately; I thought you had forgotten about it."

*****

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