Chapter 279 Financial Report for the First Half of the Year
While the 10-film project was boiling over Hollywood, Daenerys Entertainment's mid-year financial audit was quietly over.
In addition to other tasks, Simon spent three days reading through dozens of pages of financial reports compiled by the company's finance department.
Overall, Daenerys Entertainment's revenue focus in the first half of the year is still "Scream", "Steel Magnolia", "Dead Poets Society" and "Rain Man" at the end of last year.
From January 1 to June 30, six months, the domestic box office portion of the four films continued to earn $263 million, and Daenerys Entertainment received $121 million from this part of the box office. The reason why it is lower than the average box office share ratio of 55% is mainly because of the ladder sharing scheme of theatrical screenings, and the box office share ratio gradually decreases after the release of a movie.
Overseas, the four films brought in a total of $356 million, including $95.15 million for "Scream," $12.37 million for "Steel Magnolia," $86.32 million for "Dead Poets Society," and $163.65 million for "Rain Man."
This box office figure will increase in the second half of the year, but the potential is already very small.
Compared with the data in the original time and space, the overseas box office of the four films has shrunk significantly, except for "Steel Magnolia", which has a huge gap between the overseas and local box offices, because the overseas audience of the subject matter is too small, the box office shrinkage of several other films is mainly due to the lack of overseas distribution capacity of Daenerys Entertainment and the fact that many overseas box office countries have not yet opened up the film market.
Moreover, in this era, even if most overseas box office countries have opened up their film markets, they still implement various restrictions on Hollywood films in order to protect their domestic film industry, such as low accounts, high taxes, and delayed schedules, and the average share of Daenerys Entertainment from overseas box office is only 33%.
In addition, some overseas box office warehouses that are too small or have stricter policy restrictions, Daenerys Entertainment can only carry out a one-time out-of-sale process, although the box office is still included in the total overseas box office data, but does not participate in the sharing.
In Simon's memory, the situation would improve rapidly after the nineties.
Calculated is a total of $116 million in overseas box office revenue for Daenerys Entertainment from these four films.
As for the new films released this year, as of June 30, the six films in the first half of the year, including "Thunderbolt Blue Angel" and "Metropolis Man", have earned a total of $123 million, and "The Sixth Sense" released on June 30 has been excluded from this count, and the cumulative revenue of the six new films is $73 million.
In the home entertainment business, "When Harry Met Sally," released late last year, sold 2.93 million cassettes in the first half of the year, or $87.6 million at a $29.9 cassette unit price.
Although 80 percent of the revenue from the videotapes is counted as a cost in the basic agreements with the various unions, and only 20 percent is divided, in practice, the studio's gross profit from the sale of each videotape is generally 40 to 50 percent of the unit price of the sale, and the gross profit percentage of the hot new film "When Harry Met Sally" is even higher.
As a result, the release of the videotape of the movie "When Harry Met Sally" alone brought more than $46 million in gross profits to Daenerys Entertainment.
Counting some other fragmented project income, comprehensive statistics, in the first half of the year, Daenerys Entertainment's film business generated nearly 900 million US dollars in the total industry output value of the box office, videotapes, etc., and the operating income attributable to Daenerys Entertainment itself was 395 million US dollars.
Behind the huge revenue, it also means huge expenses.
In the first half of the year, Daenerys Entertainment produced more than 10 films in various official production stages, of which the budget cost of "Batman" alone reached $50 million, and other projects such as "Bodyguard", "The Sixth Sense", "Uncle Buck", and "Scream 2" also required large expenditures.
At the same time, Daenerys Entertainment has also invested a large amount of money in the theatrical distribution of local and overseas films.
Finally, taking into account a series of large expenses such as the construction of Daenerys Studios in Malibu, the establishment of many overseas branches, the repayment of some due loans, and equally important tax factors, the net profit of Daenerys Entertainment's film business in the first half of the year was only $51.19 million, with a net profit margin of less than 13%.
Television business.
Compared with movies, the TV business in the first half of the year was a bit lackluster, and Daenerys TV's revenue focus is still four reality shows. Since the beginning of this year, the TV department has signed production contracts with TV networks for three new dramas, but last year's two dramas were also cut because the ratings were too low after the spring season.
According to this statistics, Daenerys TV Company currently has a total of 10 TV projects in operation, of which six are TV series and four are reality shows.
Because the profit figure of the reality show, which has the largest revenue, is basically determined, in the first half of the year, the total revenue of Daenerys' entertainment TV business was $232 million. Also after amortizing the large expenses, the net profit of the TV division was $36.82 million, and the net profit margin was also only 16%, which was not too high.
In terms of comic business.
Although the launch of the "Batman" project has drawn the industry's attention to Marvel Entertainment, in the first half of the year, the comic book company still maintained a low-key operation, with a revenue of $39.71 million and a profit of $2.26 million that had little impact on the overall situation of Daenerys Entertainment.
However, in the financial report for the first half of the year, there was no bright spot, that is, the consumer goods department led by Nancy Brill.
After several adjustments, Daenerys Entertainment Consumer Products is now mainly responsible for the development of peripheral products for a series of film and television projects, the distribution of soundtrack records and part of the advertising business.
Of course, the sponsorship advertising operation of several reality shows such as "Who Will Become a Millionaire" is still solely responsible for Daenerys Television Company, which belongs to the advertising department of Daenerys Television Company, and the consumer goods department is only responsible for the peripheral product development of several reality shows, and the so-called advertising business is mainly the product placement cooperation of movies and TV series produced by Daenerys Entertainment.
In the first half of the year, the energetic little woman led the investment in Blockbuster, established Daenerys Analytics, and launched Blizzard Studios.
Through the operation of peripheral products for the two key projects of "Scream" and "Beverly's Wife", the peripheral product business of the consumer goods department has opened up the situation in one fell swoop, and two projects for different consumer groups have successfully established two targeted retail channels for the consumer goods department, one for teenagers and one for housewives, which happen to be the two groups of people with the greatest consumption potential.
After the successful operation of "Scream" and "Beverly's Wife", the development of peripheral products for the company's other films has also been carried out more smoothly.
In terms of soundtrack records, although the original soundtrack records such as "Dead Poets Society" and "Rain Man" released by the record department are far from reaching the height of the original soundtrack album of "Bodyguard", they have also achieved decent sales. As of June 30, the sales of the soundtrack of "Rain Man" have exceeded 5 million copies, which is very rare for a pure music record.
In the final advertising business, in order to avoid the company's film and television dramas blindly carrying out advertising placement and causing disgust to the audience, Simon was very cautious in this regard.
Nancy Brill did not blindly pursue inappropriate advertising placement, however, due to the success of Daenerys Entertainment's series of films last year, there are countless companies that want to carry out brand cooperation with the company, and the prices are very generous.
As a result, the consumer goods department, which did not have much input last year, exceeded 200 million US dollars in revenue in six months in the first half of the year, reaching 207 million.
However, because Nancy Brill pursues more long-term business development than short-term profits, a large amount of money has been invested in product production, channel construction and publicity and marketing, and the company has even unknowingly owned a toy factory in Rhode Island on the east coast, plus the consumer goods division also needs to share the company's other expenses, so the profit margin is even lower, only 9.5%, and the net profit is $19.71 million.
In the end, overall, Daenerys Entertainment had total revenue of $873 million and a net profit of $110.78 million in the first two quarters of this year.
Compared to the huge gains that Cersei Capital has just made from the Japanese financial market, Daenerys Entertainment's net profit of $110 million seems somewhat insignificant. However, Simon has always been clear that this company is where he is based, and that opportunities in the financial markets cannot be available every year, and as he becomes more and more visible, it becomes more and more difficult to make a profit in the financial markets. Investment in the field of science and technology will generally not see the final results until ten or twenty years later.
Daenerys Entertainment's lower profit scale is mainly due to the need for Daenerys Entertainment's rapid expansion.
Moreover, the net profit of $110 million in half a year is definitely not low. Such a level of profitability can easily squeeze into the top 100 of the Forbes North American 500 list in this era.
More than fifty kilometers from the coastline of the city of Los Angeles, a luxury yacht with a length of more than 60 meters is quietly moored at sea level.
It's Sunday, August 6th.
This weekend, Simon did not work continuously, but chose to rest again.
However, this time it was not just a break.
James Raybould has been coming from New York in recent days to discuss corporate matters and to help Simon introduce some people, or politicians to be precise.
The location is arranged on this yacht.
Simon does not intend to use illegal means in his political networking, everything is done in accordance with public rules such as the Federal Campaign Act. However, he also wants the matter to be as low-key as possible, at least he has no intention of appearing publicly with a politician in the newspaper media.
Over the course of two days, including David Dinkins, who is making final preparations for the New York mayoral race at the end of the year, Simon met with a total of six politicians who Westeros has confirmed to be funding. In addition to David Dinkins, the other five are a Senator from the California Senate, two from the California House of Representatives, one from New York State, and one from the California Congress.
These people are also Democrats, and since they have decided to take sides, Simon does not plan to bet on both sides in the short term.
Moreover, Simon did not pick those celebrity politicians who paid a lot of attention, and the few people he selected were basically potential stocks with good ability after careful investigation and no backstage determination. The biennial election of congressmen in the United States seems to be very frequent, but in fact, the chances of re-election are very high, and some 'evergreen' politicians can even serve more than 10 consecutive terms.
Nor does Simon seek these people to bring him an immediate return.
The first batch of 'investments' in the early days was mainly to establish contacts and avoid that once something happened, Daenerys Entertainment would be smeared in the eyes of the federal leadership.
In the long run, it was a good idea that in three or five years, these people would be good if they could support Westeros' expansion, and in ten or eight years, if someone could get into the heart of federal power and still side with Westeros, it would be a big profit.
In the evening, Simon finally wrapped up the last meeting of the weekend.
Personally sending the New York State senator away by helicopter, Simon and James walked to the table and chairs on the yacht's top terrace next to the tarmac.
As the sun sets, fiery clouds cover the horizon, creating a magnificent view of the sea and sky.
Jennifer personally brought a pot of coffee to the two of them, but walked to another set of tables and chairs next to them and sat down, quietly bowing her head to read a magazine.
James glanced at his daughter, sighed slightly in his heart, and continued to Simon: "There are some other shortlists, I will send you the information when I have time, and there is also a consulting company that provides election research and campaign plans for political parties, which has just been established, called Schlapp Consulting, and is headquartered in Greenwich, Connecticut, near New York. Even though it's new, the founder of this company, Joseph Schlapp, has a very deep family of political credentials and connections, and I think it's a good opportunity, Simon, that we can set up a special fund to fund this company for the long term. ”
It is impossible to seek direct monetary returns on political investment, and the establishment of a non-profit fund can also maximize the conversion of capital investment into tax-sheltered capital.
"I'll take the time to take a look at the information first," Simon didn't immediately nod his head, and said, "In addition, this time, I can probably transfer another $50 million from Daenerys Entertainment to you, and we will definitely not be able to use overseas funds within a year." ”
"$50 million is already pretty good. I also recently combed through the company's finances, in the first half of the year, the group of technology companies we invested in contributed about 37 million US dollars in dividends, which is a bit lower than last year, mainly because several companies of Microsoft that we have a heavy position in have not implemented dividends, but counting the original accumulation, this money is enough to maintain the company's operations. James said, remembering one more thing, and said: "In addition, among the remaining three companies that can reduce their holdings at any time, AMD's stock price has been falling recently, and now the market value is 50% lower than when we bought it two years ago, I don't think there is any need to stay." ”
AMD, naturally, is Intel's 'little enemy'.
I still can't help it.
I remember that when I bought AMD two years ago, the company was worth about $900 million, with a total investment of about $45 million. Simon hasn't paid attention to this matter recently, and at this time, listening to James, AMD's market value may have fallen to $600 million, compared to Intel's market value of $6 billion......
Well, it simply can't be compared.
However, think about the fact that AMD can survive for more than 20 years, there is no need to cut the meat and leave the market now, maybe when it will come back to the light, the loss will be made up.
Simon shook his head with a smile and said, "Our funds are not tight now, let's continue to hold them." ”
James nodded in agreement.
After finishing the matter, he casually chatted about the recent big moves of Daenerys Entertainment.
The two sat on the terrace for half an hour before the helicopter flew back and Simon, James and Jennifer boarded the helicopter to return to Malibu.
Back on shore, the Raybould father and daughter refuse Simon's invitation to attend the Warner Bros. party together in the evening and rush to dinner with Jennifer's uncle, George Norman's family.
Simon rested for a moment at his home on the west side of Cape Dume, and then set off for downtown Los Angeles.