Chapter 251: Warner Bros.

Los Angeles, Burbank, the headquarters of Warner Bros. Pictures. Warner Bros. President Jeff Robinov had just left CEO Barry Meyer's office and bumped into COO Alan Horn.

"Wanna grab a drink at my place?" Alan Horn suddenly proposed.

Jeff Robinov smiled and nodded. The two went straight to Alan Horn's office.

"This summer season, we've failed. This year's results are going to be ugly," Alan Horn said a bit helplessly as he poured Jeff Robinov a drink.

"Superman Returns, only $200 million in North America, $190 million overseas. The movie's production budget, due to the changes in several writers, directors, and lead actors, cost $300 million. With a global box office of $390 million, I don't know what to do with it," Horn continued.

Jeff Robinov was worried. The Superman reboot was considered a failure. Next year, they hoped for better with the second installment of the Batman series, The Dark Knight.

"Poseidon cost $160 million to produce but only brought in $60 million in North America, and $200 million globally.

Then there's the horror film Lady in the Water and the 3D animated feature, The Ant Bully. Our four major summer releases this year were a complete disaster," Alan Horn laughed helplessly. Warner Bros. didn't have a Harry Potter film this year either. Harry Potter and the Order of the Phoenix would be released next year.

"How's the deal with Paramount for The Curious Case of Benjamin Button?" Jeff Robinov asked.

"A $150 million production budget. Directed by David Fincher, with Brad Pitt as the male lead, and Cate Blanchett as the female lead. Paramount is handling the North American market, and we are handling overseas," Alan Horn explained, taking a sip of his drink.

"What about the project 10,000 B.C.? Roland Emmerich also needs over $150 million for the budget. Since we've given it the green light, the project progress must speed up to ensure it can be released by 2008," Jeff Robinov said, as he always appreciated directors who could deliver their films on time and within budget.

Not only disaster film master Roland Emmerich but also old cowboy Clint Eastwood had such qualities.

"10,000 B.C. is a collaborative project with Legendary Pictures. A $150 million budget isn't a big issue," Alan Horn said, glancing at Jeff Robinov. "Judging by this year's performance, Capet Pictures might surpass Sony and us!"

Jeff Robinov nodded, "Capet Pictures' performance this year has been crazy."

"Barry is very focused on Charles Capet now."

"Our group's businesses are too diverse: AOL, Time Warner Cable, TBS Broadcast Group, film and TV entertainment, media magazines, games, and so on. Plus, we've sold Warner Publishing and Warner Music Group in the past two years," Jeff Robinov shook his head.

"Over-diversification has become a burden for us."

"A media and entertainment division composed of Warner Bros., TBS television, and HBO should be our focus. Plus, our famous magazines like Time, Fortune, People, Sports Illustrated. But as for cable operations and game production, I think they're just distractions," Alan Horn, as Warner Bros.' COO, had always been serious about movies, pursuing a high-concept model of big productions, big stars, and big promotions.

Alan Horn, just being an executive at Warner Bros., a subsidiary of Time Warner, of course, couldn't decide the group's strategic direction.

However, Alan Horn was dissatisfied with Warner Bros.' head Barry Meyer because he thought Meyer was too cautious.

Just like former Paramount Chairwoman Sherry Lansing's attitude towards movie budgets, Meyer preferred to spread risks by collaborating with other studios.

Jeff Robinov believed in Alan Horn's bold approach, but Barry Meyer had been at Warner Bros. for years and his performance wasn't lacking.

"The group has decided to merge WB Television Network and UPN (Paramount's TV network) to form the sixth major broadcast network CW," Jeff Robinov reminded him. "As you know, Warner Bros. accounts for less than 30% of the group's business. The majority is still TBS and HBO!"

TBS includes TNT Sports Channel and CNN, both among the top-rated cable channels in the U.S. HBO is currently the king of pay TV.

Warner Bros. Television is also the largest TV production group currently, and Warner Bros. Pictures competes internally with New Line Cinema, another subsidiary.

Alan Horn sighed, "Charles Capet lavishly created Marvel Studios. That's where our focus should be, not trying to drag Capet Pictures down. You've all seen Charles Capet's rise in these years. He's exceedingly controlling and likes to take the lead. Small obstacles don't faze him much."

"DC Comics and Marvel Comics have been rivals for years. Charles Capet didn't hesitate to acquire Marvel Entertainment and will surely make Marvel Comics his cornerstone."

"You really believe in Iron Man?" Jeff Robinov frowned.

Alan Horn shook his head, "I'm not sure, but Charles Capet is terrifying. Have any movies he's led failed?"

"Besides, Iron Man has a budget of $150 million. Do you think he'd allow it to fail?"

Jeff Robinov opened his mouth to argue but couldn't find a counter-argument. BNP Paribas, Merrill Lynch, J.P. Morgan, Nomura Securities, Credit Suisse, and others are all supporting Capet Entertainment financially.

Capet Pictures might lack heritage, but now they can release over ten films a year, including several blockbusters.

They've already built a North American distribution network. With content and financial backing, forming an independent overseas distribution network isn't that difficult.

Especially now that Paramount has exited UIP and is setting up its own independent overseas distribution channels.

Capet Pictures truly isn't much inferior to Paramount besides brand recognition and heritage!

"As for DC Comics, we might need to change our strategy. Without a unified outline, tragedies like Superman Returns will keep happening!" Alan Horn said to Jeff Robinov thoughtfully.

*****

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