Chapter 659 Suspend Expansion

The news of the successful auction of Disney's animation division with a sky-high price of 2.5 billion US dollars has once again caused a lot of media reports.

After the successful signing of the contract between the two parties, Summer Redstone announced the establishment of Paramount Animation while the iron was hot, and appointed Roger Ehlers, the director of "The Lion King", as the Paramount Animation department. At the same time, Viacom also announced that it will rely on the huge channel of Blockbuster chain stores and content departments such as Paramount Animation, Paramount Film, and MTV TV to jointly enter the lucrative film and television peripheral industry.

Roger Ehlers held another press conference the day after he got the contract of Paramount Animation, announcing the three sequels of "The Lion King", "Pocahontas" and "Mulan" brought from Disney. A 2D animation project was launched at the same time, which is quite aimed at the old club Disney.

The continuous positive news in a short period of time directly pushed up Viacom's stock price by 7.6%. The high stock price made Viacom shareholders who were originally critical of Redstone's aggressive expansion strategy changed their minds. They all praised Redstone's wise and decisiveness.

Some people are happy and some people are disappointed. The most unfortunate is undoubtedly the time Warner Terry Semel who lost to Redstone in the process of bidding for the Disney animation department.

Although Seagram, 20th Century Fox and other companies that failed in the competition were more or less discussed by the media, the tone of the media's comments on Time Warner's defeat in this competition was almost ridiculed After all, Time Warner's overall strength is more than twice that of Viacom, and Time Warner's previous sluggish performance in the film business has given it a good reason to grab Disney's animation division. therefore. The impact of this failure on Time Warner was even greater than the mere failure itself. Many media even doubted whether Time Warner had a financial crisis.

Firefly suddenly announced the means of extending the payment deadline on the day of the auction. Disrupting all of Time Warner's carefully considered bidding strategies. Although Terry Semel is the number one leader of Time Warner, his authority in the Time Warner Group is far lower than that of the previous generation leader, Steve Ross. This also made it impossible for him to flexibly change his strategy because of the firefly's sudden attack, which eventually led to Time Warner's failure in this auction.

Although the ultimate cause of this failure is Time Warner's shareholders and board of directors' constraints on Terry Semel, it is clear that Time Warner's shareholders and directors will not take the initiative to take responsibility, and this black pot will eventually be Button on Terry Semel's head.

Time Warner's stock has been falling for several months due to the dismal summer box office. With the failure of this auction, Time Warner's hopes of entering the field of animated films were dashed, and the negative impact of this incident caused Time Warner's stock price, which had stopped falling because of the summer season, to begin to slide again.

In the face of increasing pressure and busy work, Terry Semel even had some thoughts of resigning. Of course, this idea is only fleeting,

Not to mention the lucrative salary brought by the position at Time Warner, and the taste of power brought by the position of the helm of a large media group, no one will voluntarily give up. As a result, Terry Semel is left with pain and addiction to find a solution to his current predicament.

certainly. As a seller, Firefly Group has harvested a huge cash of $2.5 billion because of this business. But there is not much congratulation in the media's attitude towards Firefly.

Most of the media generally believe that the $2.5 billion auction price of Disney's animation department is still far below its actual value, and there is no need to pay attention to the future. The "Lion King" that is still in theaters can prove this, "The Lion King" three The expected net profit of 1 billion US dollars during the year means that the average annual net income of Firefly will be more than 300 million US dollars. According to the general rule that the company's market value is usually more than 10 times its annual profit, the media believes that the actual value of Disney's animation department is absolutely Should be over $3 billion.

Compared to Terry Semel, who had to go into battle in person to accept interviews with major media in an attempt to reverse the recent decline of Time Warner, Firefly only held a regular press conference when signing with Paramount, and then did not discuss it again. any response to media remarks. This also reflects the benefits of non-listed companies, which do not have to bear the pressure from the media and capital because of factors such as stock prices and financial reports.

Moreover, although the media has abandoned the Disney animation department because of the Firefly Group, there has been a negative voice for Disneyland, Disney Store and other businesses. But in fact, the development rhythm within the Firefly Group is very clear.

Immediately after spinning off the hand-drawn animation division, Katzenberg began work on rebuilding Disney's animation division.

Although most of the best digital animators are concentrated in Pixar, in recent years, there have been numerous advertising design companies and special effects studios using computer graphics technology. Professional and technical personnel are trained, and it is easy to restart the Disney animation department in the short term. Firefly Software and Pixar Studio can also provide a full set of mature animation technology and some management talents for the new Disney animation department.

Under the personal control of Katzenberg, who once dominated the revival of Disney's animation department, if all goes well, the new Disney animation department will be able to launch its first work within three years, so Disney's animation release The rhythm will only be in There was a brief hiatus in 1996, and then it was able to resume the best production state of Pixar and Disney alternately producing works.

The continuous divestment of two businesses, the sale of paper media assets and the hand-drawn animation department, made the cash reserves of Firefly Group skyrocket again. However, Eric has no intention of rushing to expand again.

Although the merger process was very smooth, there were no violent shocks. But at this time, the Firefly Group is like a huge media machine that has just been assembled. This media machine has just realized the most basic operation, and there is still a long way to go to achieve the highest operating efficiency. Many issues need to be resolved if these are ignored entirely. Can't wait for the next expansion. Then the final result is only two. One is that the group expands too fast and becomes more and more bloated, and internal problems accumulate, eventually causing the entire business to collapse and fall into operational and financial crises. inevitable decline.

Eric hopes that the major departments of Firefly Group will be reorganized and coordinated to finally reach a perfect state that even if they encounter high-level iterations like Time Warner, they can still run smoothly.

therefore. While rebuilding the Disney animation department, in order to further connect the two major business sectors of film and television, Firefly Group is also constantly making business adjustments to TV networks, Disney Channel, espn, Marvel Entertainment and other departments.

Internal business adjustments often do not need to consume too much capital, and the internal operating cash flow of Firefly Group is fully sufficient to deal with these adjustments.

Under the circumstance that Firefly's various businesses still maintain strong profitability and just brought huge funds through the divestiture of two parts of assets, a huge cash surplus has emerged within the group. Firefly temporarily chose to extend the payment period during the auction of the Disney department, which was also considered for this reason, because too much money was made in a short period of time, and if it could not be put into operation, it would have to pay taxes!

If faced with this situation before, Eric's first reaction is often to choose to pay off Firefly's debt.

But after a few years of experience. Eric's original conservative business philosophy has also begun to change gradually, and he has gradually accepted the state of corporate debt management. Although Firefly's current debt has reached 10 billion US dollars, the debt ratio is only about 30%. For most group companies, this debt ratio is very healthy, and it also helps to use debt interest for tax avoidance.

In addition, although repaying the debt in advance can save some interest expenses for Firefly, even if all 10 billion US dollars of debt are repaid in the short term, the debt interest that Firefly can save is only about 5 billion US dollars, but using this 10 billion US dollars for investment, Within the ten-year long-term debt, there is absolutely no problem in multiplying the 10 billion US dollars with Eric's rebirth advantage. Therefore, it is almost completely unnecessary to choose how to pay off the debt and invest. things to consider.

Backed by abundant cash, although Firefly's internal expansion has temporarily stopped, Eric has accelerated the pace of investment in the high-tech field that he is familiar with. It is about to enter the second half of the 1990s when the high-tech industry is rising, and this is also the best opportunity to enter the game.

In order to support the technology research and development of Yahoo Advertising Alliance and Yahoo Technology Alliance, Eric once again injected 200 million US dollars into Yahoo's development funds.

The $200 million in debt financing promised to AOL also landed on the other side's account in one go.

At the same time, according to the angel fund plan that was originally drawn up to quickly promote the Yahoo Advertising Alliance, Eric began to speed up the injection of funds for those websites with good development potential.

However, these investments still only occupy a small part of Firefly Group's capital reserves. Of course, Eric will not blindly increase investment to take advantage of it. Therefore, leaving nearly $1 billion in cash after dividends from other shareholders has also become a more distressing thing for Eric.

"What a blissful distress," Eric said with emotion while sitting in the Firefly Studios office more than a week after the Disney animation department auctioned off the recent group financial statements.

Kelly, who had just opened the office door and walked in, glared at Eric lightly, came to the opposite side of Eric, handed a schedule to Eric, and quickly said: "I have already contacted a Gulfstream Business. The passenger plane, the Victoria's Secret team will be able to fly to New York tomorrow morning. Miss Brighton has already arranged a press conference there. In addition, the set of the Arsenal on Lexington Avenue in Manhattan has been laid out according to the drawings you gave, it's just you The camera remote control rail is still being customized, and it may take a week. There is also a headset recorder..." Having said that, Kelly paused and said, "I really didn't know you brought so many strange ideas. However, Motorola has offered to customize it for free, but they need to have a prominent Motorola logo printed on the device."

Eric nodded: "This is no problem, but they also have to hand over the equipment within a week."

"Of course, I have already told them," Kelly nodded, and added: "This is a Victoria's Secret business. In addition, Mr. Katzenberg's assistant just called, and he will also go to New York tomorrow."

Eric, who was looking at a document, raised his head: "What is he doing with him?"

Kelly did not tease Eric this time, explaining: "Tomorrow is the 19th, Monday, "Survivor" premieres on Tuesday, and Mr. Katzenberg should hope to see the ratings of "Survivor" as soon as possible. If there is some situation, it is also convenient to make adjustments as soon as possible.”

Eric nodded suddenly, he just remembered that "ER Story" and "Friends" aired on September 28th and September 29th, but ignored the premiere date of "Survivor" a week earlier.

After the pilot broadcast, there is not much concern about the ratings of "ER Story" and "Friends", but for "Survivor", a reality show with a very novel format, although this program is Eric himself Hand-picked, but many still have doubts. Moreover, because of the special program format, "Survivor" could not arrange a pilot episode. It is not surprising that Katzenberg wants to sit in the New York headquarters in person and make immediate adjustments to the possible consequences of this program.

Eric is not too worried about the show "Survivor". After all, the show in his previous life has already proved its popularity. Even more than ten years after the show was launched, various types of similar programs have appeared. Follow the reality show. However, Eric has no intention of interfering with Katzenberg's decision.

Seeing that Eric didn't say anything, Kelly handed over a thick document: "This is the information you asked me to collect. The products developed by this radio communication technology company completely deviate from the mainstream gsm format, but I didn't read it. There is no need to invest, unless you are confident that their communication system can completely replace gsm, but I think this is unlikely. The first generation of analog signal transmission took more than 20 years to be eliminated by gsm Even if this new communication format has more advantages than gsm, I don't think it can replace gsm in a short time. After all, all the major communication technology companies and mobile device manufacturers in the world now use It is the gsm standard and has invested a lot of R&D funds, and it is unlikely that these world-class electronics giants will allow the technological achievements just obtained to be replaced by other technologies." (To be continued.)

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