Chapter 30 New Developments in the Film Industry

When Zhang Lexing left the 3DO company's new product launch conference, he did not have a 3DO game console in his hand, because at this time, Tripp Hawkins only had a few engineering prototypes in his hands, but he promised that after the official production, the first 3DO game console off the assembly line would be given to Zhang Lexing, which is a good collection.

Back in San Jose, Zhang Lexing fell into thinking about the development of DreamWorks. DreamWorks is far from being strong, and although it can make a few films a year, the lack of its own distribution channels is always a hidden danger, but fortunately, with Spielberg's good relationship with Universal, there is no need to worry about distribution for the time being. As a result, DreamWorks' annual film production has become a big problem, relying on the current shooting speed, there are only three or four movies a year plus one TV series, although it can make money, but this speed is too slow, and if it continues to develop like this, sooner or later it will become a vassal of others.

Increasing the investment in DreamWorks is a way, but it requires the consent of other shareholders to increase the capital, Zhang Lexing was originally the company's major shareholder, and if the capital increase falls in the eyes of others, it will become the intention of monopolizing DreamWorks, which is not a good thing, and it is impossible to enhance the company's strength immediately by increasing investment. Zhang Lexing couldn't help but think of Mak Jiajun's mantra, "mergers and acquisitions are the medicine for the company's rapid development", and he could consider acquiring one or two independent film companies, plus Pixar to set up a DreamWorks Film Group, so that the overall strength would be greatly enhanced.

Of course, Zhang Lexing is not a reckless person, taking advantage of the time to participate in the Visual Software Group operating system seminar, he consulted many people, such as Yang Xinxin and her friends who are engaged in business management, and Mai Jiajun joined in if it was not unexpected. Everyone supported Zhang Lexing's idea of strengthening DreamWorks through acquisitions, and Mak Jiajun was even more eager to try to do it himself, but he was talking about big companies such as Paramount and Twentieth Century Fox, which immediately scared Zhang Lexing away.

Now it's time to look for acquisition targets, and it's time for Russell Market Research to step in. A phone call came, but Zhang Lexing was not asked to wait too long, and more than a week later, an investigation report of an American independent film company came to Zhang Lexing's hand.

The report reads: "...... The more well-known independent film companies mainly include Miramax Films, IFC Films, Samu Goldwin Films, Palm Pictures, Thought Films, New Line Pictures and other companies. These include distribution-focused films such as IFC Films, as well as Nu Skin Pictures, which spans production and distribution...... Among those eligible is Miramax Films, founded in 1979 by brothers Bob and Harvey Weinstein, one of the independent film production and distribution companies in the United States, which is currently being acquired by Disney Company for around $70 million...... In line with the acquisition requirements are also New Line Pictures, founded by Robert Shea in 1967, the company's initial business was the distribution of some low-cost films, and after 1979, it began to get involved in film production, and since 1984, it has been famous for film production with the "Ghost Street" series, and in 1986, New Line Pictures went public, and in 1990, it established its position in the industry with the introduction of the film "Teenage Mutant Ninja Turtles". Overseas distribution, etc. In order to raise funds to complete the development goals, Robert Shea, chairman of New Line Pictures, intends to transfer part of the equity (about 30%~35%) for external financing, according to the investigation CNN boss Ted Turner is in contact with it, and it is possible to buy part of the equity of New Line Pictures, and it is estimated that the purchase price may reach about 400 million US dollars...... Also eligible for the acquisition is ......"

After watching it, Zhang Lexing put his main goals on Miramax Films and New Line Pictures. Miramax Films Zhang Lexing is not familiar with it, and he doesn't know what achievements he will have in the future, mainly because the acquisition price is relatively low, and the introduction materials of Miramax Films mentioned that he has actually released Hong Kong films such as "Flying Eagle Project" and "Smiling Proud Jianghu 2: Undefeated in the East", which aroused Zhang Lexing's interest. As for the price required by the new line films, it is a little higher, but I have a little impression of this film company Zhang Lexing, the famous "Lord of the Rings" trilogy in the future is from this company, plus the "Ghost Street" series that he has now, it is difficult for Zhang Lexing not to be tempted by the new line pictures.

Now that the goal has been set, it is necessary to send people to negotiate next, but fortunately, there is no shortage of good negotiators in the Red River Fund, plus professionals from DreamWorks who understand the film industry, two new negotiation teams have been formed, and they went to Miramax Films and New Line Pictures respectively, but unfortunately there are people competing in both of them, and Zhang Lexing can only be prepared for bleeding.

……

Bob and Harvey have been very distressed lately, and the two brothers have been working on Miramax Films for more than ten years, and they are in a better mood when they see that they will fall into the hands of others. This thing started three months ago, everything was fine, although I borrowed a lot of money from the bank for the development of the company, but according to the plan, it should still be able to repay, but those banks that provided loans suddenly offered to recover the loan in advance at the same time, and they did not hesitate to lose the interest on the loan. The bank's attitude was unusually resolute, and the repayment cycle was almost a year ahead of schedule, which disrupted the plans of the two brothers, Bob and Harvey, and most of the funds on hand were arranged for film distribution and filming, and the rest was just a little money left for daily expenses, not even a loan from one bank, let alone several banks at the same time.

The two brothers also tried to raise money from other banks, but unfortunately none of them wanted to, and the two brothers, Bob and Harvey, were extremely uncomfortable when they saw that the company they had worked so hard to run was about to face bankruptcy and liquidation. At this moment, the representative of the Disney Company appeared, and he proudly announced that Disney had taken a fancy to Miramax Films, as long as the two cooperated a little and sold Miramax Films to Disney, then in the future, they would enjoy endless glory and wealth, and the tone seemed to be as if they were the saviors.

Miramax Films was created by two brothers, Bob and Harvey, and even the name of the company is very meaningful (Miramax is the abbreviation of his parents' names, Miriam and Max), and the two never considered selling the company, but in the current situation, the two have no strong confidence at all. After the first rejection, Disney representatives were not discouraged at all, came more diligently, and sometimes even coincidentally appeared at the same time as the bank collectors. Disney's aggressive attitude made the two brothers Bob and Harvey understand that the acquisition of Disney was a must-win, and the two even had malicious guesses that there might be a shadow of Disney behind the change in the bank's attitude. Having rejected Disney's offer time and time again, the brothers Bob and Harvey knew that this would not play a fundamental role, and that they would only delay for a while at best, but in this case, it would be a comfort for Miramax Films to stay in the hands of the two of them for an extra day.

Not long ago, a joint negotiation team formed by the Red River Fund and DreamWorks approached the two brothers, Bob and Harvey, expressing their intention to acquire Miramax Films, and offered quite attractive terms, which are much better than Disney's, and more importantly, Miramax Films will turn over from now on, and it is no longer time to be unilaterally oppressed by Disney. The sudden appearance of more competitors made the Disney representative dumbfounded, and he was forced to give up his original arrogance and became much quieter, and the mood of the two brothers, Bob and Harvey, also became happy.

After talking, Disney representatives had to slowly raise the price, but the Red River Fund and DreamWorks joint negotiating team were able to keep the offer slightly higher than Disney's, which is also due to the two brothers, Bob and Harvey. The talks took more than three months, and in the end, the Red River Fund and DreamWorks joint negotiation team defeated Disney with an offer of $80 million to acquire 85% of Miramax Films, and successfully mastered Miramax Films. The reason why the two brothers Bob and Harvey agreed to the takeover offer of the Red River Fund and the DreamWorks Joint Negotiating Group was partly because the other party promised to keep a part of the shares to the brothers and guarantee the independent operation of Miramax Films, and partly because they wanted to see the wonderful expression of the Disney representative after the complete defeat.

On the other side, New Line Pictures ......

This time, the opponent of the joint negotiating team between the Red River Fund and DreamWorks was replaced by CNN's boss Ted Turner, which was not an easy opponent to deal with, and the two sides used all kinds of means to fight, but there was a draw, and in the end they could only rely solely on the level of the offer to decide the winner, which happened to follow the wish of Robert Shea, the chairman of New Line Pictures. The two sides went back and forth, and the offer rose all the way, from the initial CNN offer of $320 million to acquire a 35% stake in New Line Pictures, and finally the Red River Fund and DreamWorks joint negotiation team decided to win the bid with a $550 million offer to acquire a 30% stake in New Line Pictures. After signing the relevant agreement, Robert Shea sold 8.83 million shares of New Line Pictures to Red River Fund at a price of $11.31 per share, equivalent to owning 7.24% of the equity of New Line Pictures, and then passed a resolution at the shareholders' meeting to raise $450 million by issuing 39.8 million shares to Red River Fund at a price of $11.31, thus Red River Fund achieved the goal of controlling 30% of New Line Pictures.

In the process of this transaction, Robert Shea, the old fox, not only raised the funds needed for the development of the new line, but also took the opportunity to earn nearly $100 million in the process, and also successfully maintained his voice in the new line of pictures. It's a pity that this kind of voice is not safe, according to Mak Jiajun's words, "as long as I give me 5%, I can leverage the entire board of directors", not to mention that Red River Fund holds as much as 30% of the shares of New Line Pictures, which is the second largest shareholder after the company's chairman Robert Shea, as long as there is the right time, it is probably not just the board of directors to leverage.

After completing the acquisition or holding of Miramax Films and New Line Pictures, Honghe Fund did not hold these two companies in its hands, after all, for these people who play investment, running a film company is too far apart, so in accordance with Zhang Lexing's previous instructions, a new company called DreamWorks Holdings was established. Pixar, as well as Miramax Films and New Line Pictures, all the relevant stakes were placed in it, and professional managers were hired to manage it, and DreamWorks Pictures Group began to take shape.

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