Chapter 455: Why Should I Play with You

[Chapter 455: Why Should I Play with You]

Jeffrey Katzenberg lived up to the title of workaholic. It barely took two weeks from the time he and Columbia finalized their collaboration intentions to iron out a specific cooperation agreement. Two weeks might not seem short, but with a partnership that would last three years and involve hundreds of millions of dollars, reaching a detailed agreement in that timeframe could only be described as lightning-fast.

At the same time that they finalized the deal, Columbia's CEO, Peter Guber, couldn't wait to share the news with the media, a significant positive development for the company.

...

"...I hope this movie can be shot on location and filmed in black and white documentary style. Oh, and the investment can't be less than $30 million," said Steven Spielberg from his office at Universal, discussing the adaptation of the book Schindler's Ark with Michael Eisner.

After some time, Michael Eisner finally reached an understanding with Spielberg. At least Spielberg no longer regarded him with disdain. Despite Eisner being at the pinnacle of Hollywood power, having Spielberg, who since the 1970s with Jaws had brought enormous profits to major studios, in his corner was crucial. In Hollywood, everyone from studio CEOs to actors needed to curry favor with Spielberg. Even though the recent film Hook hadn't performed well, it hardly dented Spielberg's standing.

Eisner listened with a smile as Spielberg laid out his conditions, quickly considering that with Spielberg's intentions of filming Schindler's Ark in black and white and wanting to use German and Polish dialogue, those desires could nearly close off any chance of the film turning a profit.

Additionally, while a $30 million investment didn't seem excessive, for Universal, which already faced a 45% debt ratio, that was no small sum. Although Eisner was also Jewish, he lacked a strong sense of historical responsibility; his priority was to excel in his career and help Universal rise again, reclaiming the glory and status he had lost.

"For the sake of collaborating with you, Steven, I can agree to that. We'll also try to reach out to Poland to seek local support," said Eisner after considering Spielberg's requests for a moment. He then looked at his watch and added, "It's almost five. How about we go out for dinner?"

Just as Spielberg was about to decline, someone knocked urgently on Eisner's office door.

Eisner frowned, slightly annoyed, and apologized to Spielberg before he gestured for the person to enter.

"Mr. Eisner, I think you need to see this," the assistant said, noting Eisner's displeasure but understanding that if he didn't inform him immediately, his job could be at stake.

Eisner took the evening paper from the assistant and quickly glanced at the headline, his eyes widened in shock. "How is this possible?"

Spielberg noticed the usually composed Eisner's look of disbelief and leaned in to see what he was looking at.

"Firefly Films teams up with Sony Pictures to develop five films over the next three years."

The bold headline jumped out at Spielberg. He wanted to continue reading the article, but Eisner had skimmed through it rapidly.

"Sorry, Steven, I may not be able to make dinner after all," Eisner said, standing up after finishing the article.

Recognizing the situation, Spielberg stood as well, leaving Universal's headquarters with Eisner.

After personally seeing Spielberg to his car, Eisner shook the newspaper he still held and asked the assistant, "Is there anything else besides this?"

The assistant shook his head. "No, but this news is definitely accurate; it was revealed by Columbia's CEO, Peter Guber, to a reporter. He wouldn't lie about something like this."

Eisner grabbed the mobile phone from the assistant and dialed Guber's private number without needing to check the contact list. Unfortunately, the line was busy. After trying for over ten minutes, he moved on to calling Jon Peters, but the same issue arose. It appeared both men were preoccupied with handling various inquiries.

"Make sure someone collects all the details about this matter as soon as possible. The more detailed, the better," Eisner instructed, hanging up the phone after another unsuccessful attempt.

"I've already sent someone to do that," the assistant replied, with a hint of pride in his voice.

However, Eisner was too preoccupied and didn't respond. He quickly turned and rushed back to his office for urgent discussions with Universal's executives.

To many observers, given the recent acquisition of Disney, it seemed Firefly Films would normally refrain from cooperation with other film studios. The priority was developing and integrating Disney in a strategic direction.

Eisner knew all too well that even if Firefly wanted to work with any other film companies, Sony-Columbia would likely be the last choice. After all, Columbia's leadership had turned the company into a mess. Partnering with them would be a foolish move -- this situation clearly was more complex than it appeared.

However, the evening paper only contained basic, practically worthless public relations jargon; other than stating Sony Pictures would collaborate with Firefly Films on five films over the next three years, there wasn't any significant information.

...

At the Liberty City Manor, a fax machine on the round table buzzed softly. Eric sat with his legs crossed in a space chair by the glass wall, gently swaying his body as he read through freshly faxed documents on his lap.

This was a preliminary cooperation agreement from Katzenberg, but it was substantially a finalized agreement since Sony Pictures' board was under the control of Peter Guber and Jon Peters. The contract would pass the board's approval without any hurdles. As for communication with the Japanese, it was merely a formality to inform them about the deal.

From the documents, it was clear why some in Hollywood referred to Katzenberg as the "golden retriever" for his fierce methods. If the Japanese were wise to the intricacies involved, they would understand they were losing a hefty piece of their pie.

The agreement stipulated that in three years, they would jointly develop five major films, with each budget ranging between $50 million and $100 million.

However, the first unfavorable clause for Columbia was that the film production would be led by Disney, and Columbia would need to utilize its available resources to cooperate fully.

Although the established financial oversight made budget tampering unlikely, outsiders who thought so would be sorely mistaken. For instance, the special effects for these blockbusters were bound to be developed by Digital Domain, a subsidiary of Firefly. This meant there was great leeway regarding pricing. Ultimately, Firefly would merely be moving money between its own hands while Columbia's contributions wouldn't return to its pockets. The share of special effects costs, even if it wasn't as staggering as some would envision, would definitely exceed fifty percent.

Additionally, Columbia only retained ownership of forty percent in the five films. Although revenue from box office, video sales, and TV broadcasts would be divided based on the stakes, ancillary revenues, such as toy licensing, stage plays, and likeness rights, would be completely monopolized by Disney. While both parties were collaborating on live-action films, the peripheral profits wouldn't be as substantial as animated films, but they would definitely reach into the millions.

The most significant stipulation, however, was regarding the film rights. Katzenberg cleverly structured the licensing like comic book companies do. Though the contract prescribed that both parties would share rights based on their investment percentages, if no sequel agreement was reached within five years after a film's release, Columbia's share of movie rights would automatically revert to Disney.

This clause essentially granted Disney exclusive rights to the films, with Columbia only marginally ahead of external investors regarding rights. They would only have an additional five years of rights due to their investment. If a film became a hit, unless Columbia relinquished a substantial share of profits for sequels, Disney could simply delay their decision for five years, at which point the rights would revert to them. At that stage, they could enjoy the profits without concern for Columbia.

As Eric read through the 'unequal contract', he didn't feel much surprise. After being in Hollywood for a few years, he'd learned that flexibility in film investment collaborations was vast. As long as both parties were willing and didn't obviously break federal laws, any bizarre agreements could be drafted.

From Columbia's perspective, even the Japanese were likely to accept this deal. After all, collaborating with Firefly, which consistently achieved box office success, would seemingly guarantee better returns than the films that had led to immense losses in the previous years.

Moreover, during these years post their acquisition of Columbia, the Japanese weren't as focused on financial gain but hoped to break through with successful projects. This 'unequal agreement' might seem perfectly 'normal' to them, asserting that when others are having fun, you can't expect to play along without contributing something extra.

However, they remained unaware that behind this seemingly 'normal' contract lay another hidden agreement that would significantly enhance Firefly's position. Columbia's well-established global distribution network would be thoroughly dismantled once this agreement was executed.

With these thoughts in mind, Eric grabbed his Motorola, which had been shut down to avoid interruptions. After a moment of contemplation, he stood up to fetch an alternate phone. Once powered on, he successfully connected with Katzenberg after several attempts.

"Jeffrey, I've reviewed the contract... I'm really sorry; I just turned off my phone. You know, things are still up in the air, and I didn't want to be subjected to tentative inquiries. Here's my alternate number if you want to take note," Eric casually rattled off his phone number. "I don't have any issues with the terms, but did you manage to get the details on Columbia's overseas distribution network? ...Oh, in that case, have them fax me a copy. I want to check it out... Sounds good... No, you go alone tonight; I'm not looking to crash the party, haha. So, goodbye for now."

After hanging up, Eric placed the Motorola MicroTAC aside and resumed studying the agreement.

Minutes later, the fax machine buzzed again.

...

"Why do you need to drag me into your snooping? Emma is still at home!" Julia complained as she arrived at the Liberty City Manor in a bright red BMW, noticing Elisabeth honking the horn frantically.

Recognizing the two ladies inside, the security guard quickly opened the gate, as Elisabeth stepped on the gas and drove in, saying, "If I came alone, he'd surely have a go at me."

"Just because we're together means he won't?" Julia asked, taking off her sunglasses and surveying the surroundings. It had been so long since she last visited here, and her feelings toward Eric had always been complicated; she tended to avoid encounters with him.

"He definitely will, but you can help me endure some of it, right?" Elisabeth said with a cheeky grin.

"Ugh, knowing you has been the greatest misfortune of my life."

Elisabeth parked the car, shaking her head. "Wrong. Knowing Eric is the real issue."

"You both are," Julia remarked, grabbing her bag and stepping out of the car alongside Elisabeth.

Arriving at the villa, Julia watched as Elisabeth deftly entered the code into the front door lock. A hint of envy arose in Julia as she realized she didn't even know the code.

"It's his birthday -- just backward," said Elisabeth, glancing at Julia's expression and giving her a playful nudge.

"Not my concern," Julia feigned indifference, all the while committing the information to memory.

*****

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