Chapter 56: Overseas Rights

The next morning, Delon arrived at Seashore Entertainment at the agreed-upon time.

Looking at the simple office space, he couldn't help but reflect. The last time, it was Michael Davenport who had actively sought him out. This time, however, Delon was the one initiating contact.

The change in roles happened so quickly.

"Hello, Michael."

Seeing the young producer come out to greet him, Delon quickly stepped forward to shake hands. "We meet again."

Michael shook his hand and invited him into the office with a smile. "Please, have a seat."

Delon sat down and observed quietly. On the surface, the young man seemed unchanged from their last encounter. It was as if the box office success of "The Purge" hadn't affected him much.

"Michael, congratulations on the success of 'The Purge' at the box office," he said.

"Thank you," Michael replied, ordering some coffee to be brought in.

Delon didn't beat around the bush. New Line Cinema was a leading company in the middle-tier segment, so he got straight to the point. "I heard the overseas distribution rights for 'The Purge' are still in your hands?"

Michael smiled. "Yes, Lionsgate doesn't have overseas distribution capabilities."

Delon nodded. "How about letting New Line Cinema handle the overseas distribution?"

Michael responded with a targeted approach. "I would very much like to work with New Line Cinema."

"Eight million dollars," Delon offered tentatively. "Sony Pictures wants to buy out the overseas rights to 'The Purge.'"

To some extent, his thinking was still influenced by their previous negotiations for "Against the Odds."

"With all due respect," Michael maintained his smile, "your company lacks sincerity in this offer."

Delon's expression didn't change. As a seasoned negotiator, he had heard such comments many times before and was unfazed. He quickly responded, "Michael, we have had a successful collaboration before. We are trusted partners, something other companies can't compare to."

Michael could only sigh internally at the level of thick-skinned tenacity in the business world. During their talks about North American rights, New Line hadn't even mentioned this partnership.

"Sony Entertainment, Hollywood Pictures, Dimension Films, and Universal Pictures," Michael said half-truthfully, "have all contacted me about the overseas rights to 'The Purge.' But I chose to meet with New Line Cinema first because of our previous collaboration."

He continued calmly, "I am very sincere about this."

Delon realized that his earlier words had no impact and said, "Michael, name your price. New Line Cinema wants to buy out the overseas rights."

Michael smiled, "Forty million dollars."

"What?" Delon exclaimed, " 'The Purge' isn't worth that much!"

So much for sincerity! Where did your sincerity go?

Michael remained calm, "This is for a complete buyout of all overseas rights."

The price was far beyond what Delon's superiors had anticipated. He couldn't agree and countered, "Ten million dollars! Including the sequel rights!"

"I can only say no."

With such a vast difference in their expectations, the initial negotiation ended without an agreement.

Michael certainly wouldn't hang all his hopes on New Line Cinema's unreliable offer. In recent years, films that performed well in North America often saw even greater success overseas. The expanding overseas market for Hollywood films was a well-established fact within and outside the industry.

Aside from New Line Cinema, other distribution companies had indeed contacted him.

In the afternoon, Chris from Sony Entertainment visited in person to discuss the distribution rights for "The Purge."

This meeting had been arranged two days earlier.

"Forty million dollars is too much," Chris began, understanding that the current box office trend of "The Purge" put him at a disadvantage. Securing an overseas distributor for such a film wouldn't be a problem. He said slowly, "I think fifteen million dollars is a fair price."

Michael smiled, "This morning, right in this office, Mr. Delon from New Line Cinema offered twenty million dollars, and I turned it down."

Chris frowned slightly. Before coming here, Sony Entertainment had estimated the potential overseas revenue for this film to be far higher than twenty million dollars, but no one would reveal their bottom line upfront.

To be honest, failing to secure the North American rights but seeking the overseas rights put Sony in an awkward position. However, commercial interests took precedence over such concerns.

Sony Entertainment wasn't having an easy time, especially Columbia Pictures, which might end up being the sixth-largest Hollywood studio again this year.

The sixth among the top six.

"At twenty million dollars, we would struggle to make a profit," Chris said.

Who are you fooling? Michael laughed internally but kept talking, " 'The Purge' is sure to surpass fifty million dollars in North American box office revenue. In recent years, films with over thirty million dollars in North American box office earnings have usually seen higher overseas revenue. Moreover, this is for all distribution rights. The offline revenue will not be less than the theater revenue. With Sony Entertainment's distribution channels and capabilities, profitability is easy."

Chris appeared troubled, hesitating for a long time before saying, "Twenty million dollars is my highest authority."

Michael didn't believe this for a second, but he knew his forty million dollars asking price was high. He said, "Thirty million dollars."

Chris was about to refute, but Michael quickly added, "Hear me out. This isn't just for the rights to one film, 'The Purge.' It's for two films!"

"Two films?" Chris frowned. What other film had Seashore Entertainment produced?

Michael appeared quite generous, "Seashore Entertainment also holds the overseas distribution rights to 'Against the Odds.' For thirty million dollars, Seashore Entertainment will sell the complete overseas rights to both films to your company. We are very sincere about this collaboration."

Chris looked at Michael, who seemed to be indicating that he was getting a great deal.

'Against the Odds'? He vaguely recalled it—a film that had grossed eighty thousand dollars in North America.

Michael brazenly exaggerated, "The film is actually good. With proper promotion, it could generate several million, if not tens of millions, in overseas revenue."

If that lousy film could make tens of millions, he'd change his surname to match his Japanese boss's! Chris thought.

Michael spread his hands, "The overseas rights to both films for just thirty million dollars is not high at all."

Chris restrained his urge to walk out and said, "Sony Entertainment only wants 'The Purge.'"

That 'Against the Odds' can stay with you forever.

"Sorry," Michael said sincerely, "Seashore Entertainment is selling these two films as a package."

The bulk of the North American revenue from "The Purge" went to the distributor, so Michael was banking on overseas revenue to make money. Bundling the sales would effectively dilute the profits from "The Purge," reducing the share for investors.

A company that doesn't fleece its investors can't be considered a good company.

Seashore Entertainment wasn't the first in Hollywood to do this, nor would it be the last.

The most typical example was China Film Group Corporation. When they introduced a blockbuster film, they often had to buy several bad films as well.

At that time, cinemas would show some long-forgotten flops from North America, usually bundled with the blockbusters.

But those bundled films weren't free; they had to be bought with real money.

For film companies, bundling could not only recoup funds but also effectively dilute the profits of successful films.

In the increasingly finance-dependent Hollywood, low reported profits on films were often not a bad thing.

"The Purge" was also financed.

However, Michael had further plans and couldn't be as ruthless as many major Hollywood companies.

This initial negotiation didn't reach an agreement. Over the next week, Michael also talked with Dimension Films and Universal Pictures while keeping in touch with Sony Entertainment. After "The Purge" comfortably passed the forty million dollar mark in North American box office revenue, he finally signed an overseas distribution agreement with Sony Entertainment.

Sony Entertainment bought the complete overseas distribution rights for "Against the Odds" and "The Purge" for twenty-five million dollars.