Chapter 951 Viking Records
Eric was a little puzzled: "Viking's director, why do you want to help us match up and buy our own record company?"
Katzenberg replied: "Barry said that the other party is also at the top of Virgin Records. Before EMI acquired Virgin in 1992, the development of Virgin Records was still very good. However, since it was acquired by EMI, Virgin and these It has been going downhill since 2008. He should want to get rid of EMI and seek better development space. Barry should know more about the specific situation.”
Eric thought for a while and said, "Let Barry come over for lunch at noon, let's discuss it carefully."
After sending Katzenberg away, Eric continued to work on his work and did not leave the office until twelve o'clock noon.
Barry Weiss has rushed over from the headquarters of the Firefly Group in Burbank. Because he wants to talk about business, Eric took him and Katzenberg to the restaurant of the "Titanic" exhibition hall. Got a box.
Barry Weiss was obviously very well prepared, and shortly after sitting down, he started to introduce the ins and outs of this matter to Eric.
"Virgin Records was originally an industry under the Virgin Group founded by British billionaire Richard Branson. In 1992, Virgin Atlantic was in trouble. In order to raise funds to save Virgin, Richard Branson Sencai had to sell Virgin Records. That is to say, from the beginning, this transaction was not actively facilitated by EMI Records, they just felt that after acquiring Virgin Records, they could expand their own strength.
However, the reality is not as good as imagined. Although the scale of Virgin Records is far from that of the world's major record giants, it has a very complete music production and distribution network, and its business scope also covers most singers and record types. It is almost a mini EMI. record. Therefore, EMI has no way to split Virgin Records and integrate it into its own group system, and doing so will only be worth the loss.
There is no way to split, EMI can only let Virgin Records continue to maintain an independent operating model. But in this way, because most of the business of Virgin Records and EMI Records overlap, EMI Records will only tend to the business development of the parent company itself, not only will not give enough support to Virgin Records, but will seize the original Virgin Records resources. Therefore, in the past few years, Virgin Records has not only failed to grow, but has declined. "
After listening to Barry Weiss, Eric asked, "Who are the pop artists under Virgin Records now?"
"If you talk about the pillars, it's probably only the Rolling Stones, and other singers can't be considered too good," Barry Weiss shook his head: "However, the Rolling Stones have been the most popular in the world since their establishment in 1962. One of the most famous bands, but they have long passed the peak of popularity and creation. Moreover, the band signed with Viking only after the acquisition in 1992. Since its inception, the Rolling Stones have released 40 A record, but Viking only has the copyright of the five records after they signed, and the rest or some of the most classics are all in the hands of other record groups.”
Eric was a little excited when he heard the name of the Rolling Stones, but he was disappointed when he heard what Barry Weiss said later.
The Rolling Stones' position in the history of world music is self-evident. If Virgin Records owns a large number of Rolling Stones' recording rights and wins this record company, the Yahoo Music Store will add a large number of classic music content.
However, Eric is satisfied that Barry Weiss did not hide the status of the Rolling Stones from himself in order to facilitate the deal,
Just this, he has basically agreed to this transaction in his heart. Firefly Group has grown to the current scale, and Eric cannot take care of more and more businesses. Therefore, in Eric's mind, the professional ethics of department managers is even more important than their own abilities.
Barry Weiss couldn't guess Eric's inner thoughts, noticed the disappointment on his face, but became nervous, and quickly added: "Eric, I think the greatest help Virgin Records has for us is that it has The music distribution network. In addition to the UK headquarters, Virgin Records has branches in Germany, France, the Netherlands, Italy, Belgium, Luxembourg, Spain and other countries. This is a record distribution system that perfectly covers the whole of Europe. In addition , it also has branches in North America and Japan. It is not impossible for Firefly Records to catch up with other major record giants in the future by winning Virgin Records and combining the advantages of Firefly Group’s media resources.”
Eric felt the ambitious tone of Barry Weiss, looked at Katzenberg and nodded, then turned to Barry Weiss and said, "Barry, how much do you think it takes to buy Viking? money?"
Realizing that Eric had agreed to the acquisition, Barry Weiss suppressed his excitement and said: "One billion dollars, Eric, although Virgin Records is a dispensable for EMI today. Cumbersome, it has been going downhill in recent years, but its foundation is still there, and it is impossible for EMI to understand our intention to buy Virgin Records. Therefore, although we will shout lower when we quote, but we want to impress When EMI changed hands with Virgin Records, I think the final transaction price would need to be at least $1 billion, maybe even higher.”
Eric smiled helplessly, and he also knew that what Barry Weiss said was the truth.
Compared with other media giants, the Firefly Group, which has grown rapidly in recent years, is simply a local tyrant in the eyes of everyone. Such a powerful tycoon has launched an acquisition of his own industry. .
Eric was thinking about this, when Katzenberg interjected: "Eric, after the repayment of this year's due bonds, Firefly's debt will be reduced to $7.5 billion, I think the acquisition of Virgin Records will , we can completely raise funds by issuing debt.”
The $7.5 billion in debt is not high even for other major media groups. Compared with the valuation of Firefly Group of US$100 billion, the debt ratio of 7.5% is even lower than that of peer companies. The bond interest can be used to offset the tax. The acquisition is carried out by issuing bonds. Firefly is almost equivalent to using an interest-free loan for this acquisition.
Eric's concept of the company's debt management has long been less conservative than he was at first, and it would be better if he could spend other people's money to do his own thing without paying too much.
Nodding his head, Eric said, "You should contact EMI as soon as possible. It would be better if the deal could be negotiated before the Spice Girls release their first album in April."
Even if the acquisition negotiation is completed before April, the Firefly Group will need enough handover time to completely master Virgin Records, but as long as the agreement is reached, the Spice Girls' first album can be licensed to Virgin Records for agency distribution, which is comparable to Firefly Records Doing it yourself is much more done with less effort.
Eric spent a few days reading the script and budget of Sleeping Hollow in detail.
In the plan, the film will build dozens of real-life locations in the UK, including the complete Gothic Sleepy Hollow town. In addition, the film also needs to use a lot of CG special effects, which is actually the reason why the budget cost of the film reached 100 million US dollars.
Since the money could be used for filming, instead of just inviting sky-high stars, Eric agreed, and he didn't even plan to cut the budget.
The "Sleepy Hollow" project has been in the hands of all Hollywood film companies for a few times, and suddenly it was taken over by the Firefly Group. It is naturally impossible for other film companies to remain indifferent. After negotiating with Tim Burton and others for a long time, Paramount Pictures, which was about to win the project, immediately raised its stake and tried to save the project after hearing the news.
However, in order to help Tim Burton's film project find an owner, Johnny Depp has signed two film contracts with Firefly in advance.
If Tim Burton backs out, "Sleepy Hollow" can only change the male lead. The good brother has just stabbed himself in both sides, and Tim Burton obviously cannot stab his brother in the backhand, and Paramount's solicitation will naturally have no results.
After the "Sleepy Hollow" project was established, due to the need for a lot of preparatory work, the filming will not start until at least the second half of the year. During this time, Johnny Depp can just finish the shooting of "Midnight Bell". The production cycle of "Midnight Bell" is not long, and the schedule has been determined in July.
On the record company side, EMI also responded quickly to Firefly Group’s invitation to acquire Virgin Records. Firefly Group offered $700 million, but EMI openly offered a sky-high price of $1.5 billion.
If you want to win Virgin Records, this knife is almost inevitable.
Eric chatted with Katzenberg and Barry Weiss several times, determined that Firefly Group's asking price was capped at $1.2 billion, and then let go of the negotiation and handed it over to Barry Weiss.
After being tossed by EMI for so many years, the actual value of Virgin Records is actually only seven or eight billion US dollars. The $1.2 billion premium is also the upper limit that Eric can afford.
Exceeding this price, Eric would rather buy small record companies in various European countries for integration. Although it will take longer, the cost will definitely not be even 700 million US dollars. The premium offered by Firefly is actually more development time.
In the process of busy work, on January 18th, the important film awards of the awards season, the date of the American Film and Television Golden Globe Awards also came unknowingly.
Several film companies under the Firefly Group did not have any important award-winning films this year. The filming of "Elizabeth", which New Line cooperated with the British working-title film company, was just completed at the end of last year, and it is still in the post-production stage. New Line intends to release "Elizabeth" as an award-winning film by the end of the year.
However, New Line has a "Boogie Nights" directed by Paul Anderson, which has been widely praised by the media and filmmakers.
It’s just that this film only got two nominations for the best supporting role at the Golden Globes, and New Line has also carried out Oscar nomination PR for this film. It is expected to get a few more nominations, but it is basically impossible to win an award. .
Because this year Miramax has two popular award-winning films, "The English Patient" and "Good Will Hunting".
Miramax's original focus on award operations was "The English Patient". Although the Weinstein brothers were also quite optimistic about "Good Will Hunting", the film adopted a commercial release model. But the results were surprising.
The release date of "Good Will Hunting" was November 7 last year. After two weeks of small-scale screenings and enough reputation, the film's screening scale quickly increased to more than 1,700.
Later, under the influence of commercial films such as "Night at the Museum" and "Monster Film Company", which were scheduled at the end of the year, although the single-week box office of "Good Will Hunting" has always remained around 10 million US dollars, the highest single-week box office was only more than 14 million US dollars. , but with the excellent reputation that continues to ferment, as of the Golden Globe Awards, the film with a production cost of only $10 million has accumulated a total box office of more than $81 million, and the weekly box office remains at around $7 million.
This box office performance far exceeded Miramax's expectations for "Good Will Hunting", and the Weinstein brothers are naturally not people who don't know how to work around.
If a literary film is released for ten weeks, it can still generate more than 7 million at the box office in a single week. If it can win the Oscar, the final box office of this low-cost literary film will definitely exceed 100 million US dollars, and the later videotape revenue will be even more abundant.
In contrast, "The English Patient" completely adopts the standard award-winning film distribution model. It was released in early December, and the number of theaters for the film has always been maintained at around 500.
Although it has also been praised by the media and has become a big hit in the award season, at the box office, "The English Patient" is far behind "Good Will Hunting". It has only been released for six weeks, and the cumulative box office is only more than 25 million US dollars.
According to this trend, even if it can win multiple Oscars, the North American box office of "The British Patient" is difficult to have expectations of breaking 100 million. It is not bad to reach 80 million US dollars, but the production cost of this film is 27 million US dollars. Almost three times as many as Good Will Hunting.
Although it has won a lot of applause, whether it is "Good Will Hunter" or "The English Patient", the commercial achievements are still far from being comparable to several commercial films in the year-end schedule.
A week before the Golden Globe Awards, Firefly Group released "Jurassic Park 3" for four weeks, and the box office has reached 173 million US dollars, overseas box office has also exceeded 150 million US dollars, and the global box office has reached 323 million. Even for "Rush Hour 2", which was not very well received by the overseas box office market, its box office in North America in the fifth week of its release also successfully exceeded 200 million, reaching 207 million US dollars.
Moving forward, Firefly and MGM's two Thanksgiving films, "Monsters, Inc.," have grossed $251 million. The North American box office of "Night at the Museum 2" also reached 175 million. Although it was lower than expected, the overseas box office easily exceeded 200 million, and the global box office is expected to be close to 500 million US dollars. These are far from the literary films can be compared.