Chapter 238: Gerald Levin

In the afternoon, at the Los Angeles Country Club, after attending Steve Ross's funeral, Arthur and Time Warner's new CEO, Gerald Levin, came here to play golf.

"Arthur, think about it. Joining Time Warner doesn't mean being swallowed by Warner Bros., but maintaining complete independence. Time Warner will hold Galaxy, and you will still decide everything about Galaxy Films. The relationship with Warner Bros. will be equal, with independent movie production and distribution rights!"

Gerald Levin was straightforward; he indeed had his eyes on Galaxy. Movies like The Bodyguard, A Few Good Men, and Schindler's List were outstanding and kept coming out one after another.

How could Time Warner not be tempted? Globally, The Bodyguard even surpassed Batman Returns and Lethal Weapon 3 in box office performance.

"Whack," Arthur swung hard, and the golf ball flew out directly.

"Good shot, strong strike!" Gerald Levin said as he walked over with a smile.

Arthur looked at Gerald Levin, "Right now, Galaxy has a film department, invested in a TV station, and the TV department is preparing its first series. Last year, I bought a 3D animation company. We also have our own chain of theaters. Hollywood's Galaxy Cinema is doing well. Do you think I'd sell Galaxy now?"

Gerald Levin knew Arthur wouldn't sell Galaxy easily unless it faced a debt crisis or he got an offer he couldn't refuse.

"Arthur, consider it. With Time Warner's resource support, Galaxy's future will be limitless," he reminded again.

...

"How did the talk go?" In the car, on the way back to the company, Amy Pascal asked Arthur.

Arthur smiled, "Gerald Levin started his career at HBO. Otherwise, he wouldn't have pushed so hard for the merger of Steve Ross and Time Inc. He is quite visionary and has great faith in the future of cable TV!"

Amy Pascal continued, "BET went public this year, with a market value now reaching $300 million, becoming the first black-controlled company listed on the New York Stock Exchange. Robert Johnson has now become America's first black billionaire!"

Arthur rubbed his temples, "BET choosing to go public this year is great, gaining a lot of attention due to the Los Angeles riots."

Amy Pascal reminded, "John Malone reduced his shares in BET. What about us?"

"Reduced?" Arthur shook his head, "John Malone is busy selling TCI at a high price to Bell Atlantic and is under investigation by the antitrust committee.

BET shares shouldn't be reduced; they need to be increased. There's still significant room for appreciation in the current stock price. Send someone to contact John Malone and Robert Johnson. Galaxy's goal is to increase its BET stake to 25%!"

Before going public, Galaxy held 20% of BET's shares, which got diluted a bit after the IPO. BET is currently Galaxy's only channel with some say in cable movies, which is still useful.

Thanks to Galaxy Films' great performance, Galaxy's earnings are solid. The Bodyguard grossed over $400 million worldwide, providing Galaxy with over $100 million from cinema revenue, not to mention $60 million from selling overseas videotape and cable TV rights, and over $25 million from North American home video sales.

A Few Good Men grossed over $130 million domestically and another $100 million overseas, providing Galaxy with nearly $100 million in cinema revenue, $24 million from overseas videotapes, and TV rights, and over $15 million from the North American home video market.

Having just repaid a $100 million loan, Galaxy now holds considerable cash flow, with Schindler's List currently in theaters, and the highly anticipated sequel Scream 2 coming next, it's no wonder Time Warner was willing to offer $1 billion for 60% of Galaxy's shares. Galaxy's movies were just too successful.

Videotapes and laser discs can't compare to future DVDs in terms of price; the market for both sales and rentals is far behind DVDs.

Moreover, the cost of videotapes is much higher than DVDs. Currently, the value of new releases is the greatest, and Galaxy, a new company, has already surpassed the valuation of the veteran MGM.

"Fine, I'll arrange it," Amy Pascal didn't object, seeing Arthur's confidence in the future of cable TV.

"Also, urge the planning of the Glendale headquarters site. Galaxy urgently needs its own production base now that more movies are being produced. A production base with professional studios, recording rooms, prop warehouses, and special effects studios, among others, is very necessary."

Amy Pascal smiled, "Don't worry, we're already designing it, just waiting for the Glendale site to be settled and relocated. There's a small park inside, and the Glendale district council needs to discuss it!"

Arthur held his head, "What Los Angeles needs now is an economic recovery. Pressure them. If they waste my time again, I'll build Galaxy's new production base in Burbank. Burbank is no worse than Glendale; these guys must have shit in the brain!"

...

In the evening, Arthur drove to the USC School of Cinematic Arts to pick up Yu Feihong for dinner.

"Oh, you're at the library? I'll come to find you directly. Tomorrow is the weekend, and you're still studying!"

Before Arthur arrived at the library, Yu Feihong was already coming out with several books!

Arthur then got in the Acura NSX, and they left the USC School of Cinematic Arts.

"Let's go home."

"We're not eating out now? Going straight home?"

"Yes, I want to cook myself," Yu Feihong explained.

"Oh, even better."

*****

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