Chapter 379: Then Let It Be

It was probably because they sensed that the Westeros Corporation was no longer closely associated with the Reynolds Nabisco Group, the Hearst family waited until October 3rd to respond to the conditions proposed by Simon Westeros.

William Hearst III did not intend to share the news resources of the San Francisco Chronicle, but indicated that the Hearst Group's Los Angeles Herald on the West Coast could engage in comprehensive content cooperation with Igritte.

The Los Angeles Herald might sound like a serious newspaper, but in fact, it was similar to News Corp's New York Post, focusing mainly on social news and entertainment gossip.

Igritte's portal aimed to be a comprehensive information platform, primarily targeting the affluent middle-class elite, thus striving for professionalism and seriousness in its news content.

While entertainment news was also covered, Simon had no intention of turning the Igritte portal into an entertainment gossip hub.

Most importantly, William Hearst III's offer to collaborate with the Los Angeles Herald was merely to 'save' the newspaper, as the Hearst Group had already planned to shut down this perennially underperforming paper. Now, if it could secure financial support through cooperation with Igritte, the newspaper could undoubtedly continue to survive.

This clearly showed William Hearst III's lack of sincerity.

Simon then took a step back and, through James Rebould, informed William Hearst III that the Igritte portal only needed access to the domestic news section of the San Francisco Chronicle, and did not require other sections like international news, local news, entertainment news, or sports news.

The proposal was still rejected.

On the other hand, after more than a month of negotiations, America Online finally reached an exclusive agreement with Bell Atlantic, Bell Pacific, and NYNEX, three regional telecommunications operators.

The negotiations were arduous, especially over the individual user buyout price of $1.50, which was a sticking point.

The operators insisted on an exclusive fee of $1.50 per user from America Online, 50% more than the $1 price America Online's team had anticipated.

When the operators thought they had America Online and the backing Westeros Corporation completely cornered, Steve Case used a divide-and-conquer strategy to break the deadlock, claiming if the operators insisted on the $1.50 buyout price, America Online could not afford it and would choose only two out of the three companies.

Simply by opening their network lines, with America Online's current scale, it would virtually incur no costs yet could bring in tens of millions of dollars in funds, and the price could be renegotiated in a few years as America Online grew. The operators actually cared quite a bit about this deal.

After the 1984 divestiture, the Bell System could not remain united, and once they confirmed that Steve Case was not making empty threats, they eventually compromised.

Thus, the final price settled was $1.30 per user.

Bell Pacific, Bell Atlantic, and NYNEX, including both residential and business users, totaled 23.61 million, initially requiring a total annual exclusive fee payment of $30.69 million.

Moreover, the exclusive agreement was set for 10 years, only half the initially anticipated contract term, with both parties renegotiating the exclusive fee price every two years, with each price increase not exceeding 50%.

After the agreement was signed, America Online would be able to directly utilize the operators' network lines to provide its own internet access services. However, outside of their existing network lines, the operators would not provide additional equipment or technical support to America Online. If America Online needed such services, they would have to pay separately.

Although the terms of this contract seemed very favorable to the operators, as long as the exclusive agreement was signed, in Simon's view, it was a victory.

The potential of the internet industry was still vastly underestimated by the operators, as America Online's user base continued to grow rapidly in recent months.

This was unimaginable for a newcomer like Simon, but just as HP once failed to recognize the significance of a personal computer invented by an employee named Steve Wozniak, and Xerox made a similar mistake, the first developer of a graphical user interface operating system only received a 'very convenient' comment from the company president before being copied by two companies, one called Apple and the other Microsoft.

Ultimately, except for Simon, no one else in this world could see the future so clearly.

Even if the re-negotiation price increases reached 50% five times, America Online's annual payment for the exclusive rights would not exceed $200 million. But if it completely took over these 23 million users, America Online could generate several billion dollars a year just from internet access services.

Moreover, within 10 years, as long as the U.S. telecommunications industry's regulations could be reopened like in the original timeline, Simon was confident enough to turn the currently clinging America Online into a dominant player absorbing the big trees it once relied on.

Simon had been discussing acquisition plans for two

 companies with his team recently.

As he did not need to rush, he was still living with Janet at their Greenwich estate.

It was already October 5th, Friday.

Simon had just arrived at the Westeros Corporation's headquarters in Manhattan that morning when James Rebould followed him into the office with a copy of a newspaper article, saying, "Simon, take a look at this."

Simon sat behind his desk, took the newspaper copy, and just by glancing at the headline, he couldn't help but frown.

The article was titled "Beware of the Potential Monopoly in Emerging Internet Telecommunications," directly targeting the exclusive agreement America Online had just signed with the three major operators.

The content was evident just from the title.

However, this was not the most important part; the key was that the article came from the San Francisco Chronicle.

After skimming through the article, Simon shook his head and said, "The Hearst family doesn't want to pay any price, huh?"

America Online was still a company with less than 500,000 users, let alone AT&T; even any of the seven smaller Bells would be considered a behemoth in front of America Online at this time.

Moreover, similar exclusive agreements were not unique to America Online; many companies offering telecommunications-related services signed exclusive agreements with these giants to maintain their market advantages. Internet access services were still considered a part of telecommunications services.

Yet, the San Francisco Chronicle directly accused America Online of potential monopoly.

The impact of the AT&T divestiture case had not completely faded away, and telecommunications monopolies were still a sensitive topic that most companies did not want to touch.

Thus, the motives of the Hearst family were obvious.

Perhaps sensing Simon's proactive avoidance in acquiring shares of ESPN, and the refusal to cooperate on content sharing for the San Francisco Chronicle, dragging on until now, William Hearst III probably lost his patience and explicitly gave Simon a warning to force him to withdraw.

James also showed a wry smile on his face, asking, "What do we do now?"

Simon tossed the newspaper copy onto the desk in front of him and said, "Call Reynolds Nabisco over there; we're pulling out."

James was somewhat surprised: "Call now?"

Simon nodded, his tone calm, "Go ahead, there's no need to drag it out. Since the Hearst family doesn't want to work with us at all, then let it be."

James actually did not want to clash with the Hearst family either. Initially worried that Simon might act rashly due to his youth, seeing him so calmly give up, James felt a faint resentment towards the Hearst family.

However, James understood that from today onwards, the Hearst family would definitely be on their boss's blacklist.

After all, the Hearst family was not like Daenerys Entertainment's peers in Hollywood; this old family that had accumulated wealth over a century and controlled a vast network of print media was definitely something many people dared not provoke.

After James left, Simon calmly began preparing for the morning's meeting.

According to the latest news, this week, the president of Panasonic, Akio Morita, had a phone conversation with the chairman of MCA, Lew Wasserman, and perhaps the upcoming Panasonic acquisition of MCA might take an unexpected turn.

If so, Daenerys Entertainment must act early.

Combining the information from his memory and the current situation, Simon thought that the reason why Panasonic's acquisition of MCA took several months to finalize after it was officially announced was mainly due to the lack of competitors. Since there were no competitors, Panasonic could naturally take its time negotiating with MCA.

Now, with Daenerys Entertainment watching closely, although Panasonic was not determined to acquire MCA due to the economic situation in Japan, they probably still hoped to complete the purchase and would not continue to delay it for long.

The preparations for the acquisition of MCA had already been completed in advance; the morning meeting was still about the plan to acquire Bell Atlantic.

Over the past two months, affected by the Kuwait War, oil prices continued to rise, and the U.S. stock market was still declining.

The latest market value of Bell Atlantic had slipped to the brink of $5 billion, closing at $5.03 billion yesterday, continuing to fall by more than 10% compared to the start of the war.

Now was undoubtedly the best time to make a move.

With sufficient assets as collateral, Westeros Corporation's team had already solved the funding source problem, secretly contacting several banks that cumulatively were willing to provide up to $10 billion to Westeros Corporation.

Such a large-scale loan application was definitely not something that could be kept secret in financial circles.

Therefore, banks had more than once probed whether Simon planned to rely entirely on loans to acquire the company while keeping the huge funds overseas.

This speculation was actually very reasonable.

Transferring overseas assets back to the domestic market required a one-time payment of a hefty 28% capital gains tax. In contrast, obtaining funds through loans

 had an annual interest rate of around 5%. If the overseas funds could be properly managed to generate even a 10% return each year, this approach would be very cost-effective.

Simon had also considered this plan.

However, he ultimately gave it up.

On one hand, in the coming years, besides North America, no other market could accommodate investments that could bring Simon sufficient returns of several billion dollars.

On the other hand, this fund, or accurately, the tax paid when this fund was transferred back to the domestic market, also served as a chip, a chip that could push the federal government to approve Simon's acquisition plans.

After all, a one-time capital gains tax of around $2 billion was definitely not a small amount for the federal government, which was currently facing a severe fiscal deficit. If the federal government did not agree to Simon's simultaneous acquisitions of MCA and Bell Atlantic, Simon would definitely continue to keep the funds overseas, which was not something the federal government would want to see.

"We currently own 2.7% of Bell Atlantic's stock, and we will achieve a 4.9% stake by the end of the month. However, the main issue we face with Bell Atlantic is actually its management. If we can get the cooperation of Bell Atlantic's chairman and CEO Raymond Smith, with sufficient financial support, this acquisition should be very smooth. I don't think that given the current economic environment and the nature of Bell Atlantic itself, there will be other competitors coming out to compete with us for this company."

Having lunch with James, Simon listened to him and nodded, "Wait until the end of the month. If the timing is right, I will meet with Raymond Smith personally."

James said, "Raymond Smith is very interested in literature and drama, you two will definitely have a lot to talk about."

Simon had also reviewed the personal information collected on Raymond Smith and said, "That's still not enough, though. If he agrees to Westeros Corporation's acquisition of Bell Atlantic just because we have topics in common, I still have to consider whether to keep him after the acquisition."

James assured, "Raymond Smith's capability is unquestionable, but if you don't expect you two to reach cooperation just because of common interests, it will still require more effort from us."

Simon smiled, "A deal worth billions of dollars. If everything goes too smoothly, I'd even suspect I'm walking into some sort of trap."

As they chatted about these matters and finished lunch, Simon followed the schedule and rushed to Daenerys Entertainment's East Coast headquarters in Greenwich Village. After a week away in Los Angeles, there were a lot of issues accumulated there that needed his attention.

From arriving at one o'clock in the afternoon until nearly four o'clock, after three hours of busy work, he had roughly handled the work accumulated over the week. Simon leaned back in the office chair and picked up a draft plan for a documentary on Antarctica that was planned to be produced under the Highgate Films banner.

This was initiated during a lunch at Sophia's house last week, after Janet promised little Gemma.

Janet originally just planned to let some people going to Antarctica bring back some videotapes for the little girl, but Simon, recalling the documentary record set by "March of the Penguins" from his memory, decided to seriously shoot an Antarctic documentary.

However, Simon was not familiar with Antarctica, planning to start with an ordinary documentary to train the team, then bring out the shooting plan for "March of the Penguins" from his memory.

It was autumn in the Northern Hemisphere, but springtime in the Southern Hemisphere.

Starting preparations now would be perfect to enter Antarctica during the Southern Hemisphere's summer and finish shooting by autumn.

Flipping through the plan in his hands, Simon suddenly remembered Sophia.

Sophia had been busy preparing for Gucci's brand event in Manhattan tomorrow, and his work for the day was already done.

Hesitating for a moment, Simon dialed the woman's mobile phone number.

After chatting casually for a few moments, it seemed she was not too busy on the other end, so Simon asked Sophia if she wanted to come and have coffee together. The woman reminded him that he had been off coffee for a long time.

Then it became somewhat awkward.

After that, Simon simply put on his boss's hat and told Sophia to wait for him at his penthouse on Lexington Avenue, claiming they had matters to discuss.

Sophia asked what the matter was?

Digging to the root of the matter.

This, of course, would be discussed when they met. Isn't it a boss's prerogative to find tasks for his employees?

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