Chapter 501: Target Changed?

After watching Harry Potter and the Half-Blood Prince with Emily Blunt, the two returned to Emily Blunt's apartment in Notting Hill.

After a session of cuddling on the sofa in the living room, Charles leaned over to the lady and reminded her to change outfits!

It was night in London, but it was still afternoon in New York, with a seven-hour time difference. At the Pennsylvania Philadelphia headquarters of Comcast...

Comcast Chairman Brian Roberts sighed, "GE directly refused!"

Comcast had just made an offer to purchase 51% of NBC Universal Entertainment from General Electric (GE) for $14 billion - $6.5 billion in cash and $7.5 billion in Comcast's cable TV assets.

Vice Chairman Steve Burke looked at Brian Roberts, "Charles Capet was right, we really underestimated Capet's power."

"He's got $6 billion in cash from Vivendi for 20% of NBC Universal, and now he's offering GE's board $24 billion, half in cash and half in stock. Jack Welch, the former chairman of GE, and Barry Diller, the former chairman of Fox TV, are both lobbying GE's top brass!

Not only that, the antitrust investigation committee is also reviewing us, and several major Wall Street firms are supporting Capet's acquisition of NBC Universal," Brian Roberts shook his head.

"The number of GE shareholders supporting Capet's acquisition of NBC Universal is also growing. Our argument that Capet and Universal, both being part of Hollywood's Big Seven, would create market imbalance and monopolization isn't convincing," Steve Burke confessed, showing his helplessness. After all, Columbia Pictures had just controlled MGM a few years ago.

"And Capet Pictures' performance is outstanding. That colossal money-making ability is envy-inducing to anyone."

Brian Roberts silently lit a cigarette and took a puff, "Is Charles Capet still in Europe?"

"In London. This year, he acquired the NBA's New Jersey Nets, planning to build a new sports arena in Brooklyn, New York, to cooperate with Forest City Group's Atlantic Yards project. The new stadium has deep ties with British Barclays Bank, and he also owns a Premier League club in London itself!"

"It's astonishing when you think about it. Charles Capet has a lot of assets, including last year's record-breaking acquisition of the NFL's Miami Dolphins."

Brian Roberts's eyes sparkled, "Remarkable indeed. Entertainment, finance, politics, the internet, plus sports and real estate. He's not even 30 yet, and he already has substantial data under his control!"

Steve Burke nodded, "Maybe we should shift our target. Capet is determined to get NBC Universal. Let's take a serious look at MGM!"

"MGM?" Hearing the name brought a headache to Brian Roberts. MGM's debt crisis had emerged last year, and Quantum of Solace only delayed it by a few months.

Back then, Sony combined forces with Comcast, Texas Pacific Capital, and other Wall Street investment institutions to hold shares in MGM but failed to pull MGM out of the quagmire.

"MGM now has a $3.7 billion debt, which is a severe financial crisis. The MGM holding group is now owned by creditors. The MGM board is looking for a new CEO to replace Harry Sloan to help with the debt restructuring plan; otherwise, MGM might even lack operating funds!"

Steve Burke was closely watching. MGM now only had a distribution agreement with Sony for two more James Bond films, with no other ties.

"Previously, Tom Cruise joined MGM's United Artists. Merrill Lynch gave United Artists a $500 million credit limit, but unfortunately, Tom Cruise's developmental projects Lions for Lambs and Valkyrie didn't yield good profits. Last year, Tom Cruise and his partner Paula Wagner went separate ways and left United Artists as well. The $500 million credit line from Merrill Lynch was also canceled!"

"Who's the new CEO?" Brian Roberts inquired, given that Comcast was one of MGM's shareholders before.

"Stephen Cooper, the professional who helped Enron during its bankruptcy reorganization," Steve Burke answered.

"MGM pays over $100 million annually just in interest. Their net profit mainly comes from their film library. They don't have extra funds to develop new films. Even the cash cows like James Bond and The Hobbit series lack the funds for development!"

Brian Roberts knew MGM's most critical asset was its film library. MGM's library wasn't like Lionsgate's indie films.

Even Universal's library of 4,200 films couldn't compare with MGM's 4,500-plus films in terms of value. Universal's library was worth less than two-thirds of MGM's.

Previously, Universal was one of the 'Big Three' in the Hollywood Big Eight, similar to United Artists and Columbia.

MGM and Paramount were the true giants, even though MGM's current library was incomplete, missing many of the classics from before 1948.

Ted Turner's group bought MGM from Kirk Kerkorian, but soon resold it back due to a lack of funds, holding onto the pre-1948 classics.

Films like Tom and Jerry, Gone with the Wind, and The Wizard of Oz are now owned by Warner Brothers after Time Warner acquired Turner Entertainment.

If Comcast wanted to enter the content production realm, buying a Hollywood film company was the most direct method.

If not NBC Universal, shifting focus to MGM might indeed be viable.

"Alright, let's focus on MGM. They need to resolve their debt crisis and don't have many options. They can either sell assets or bring in capital," Brian Roberts concluded.

However, MGM didn't have NBC Universal's vast assets and businesses, meaning more companies could certainly join the MGM acquisition race.

*****

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