Heads Up Hollywood

The matter of the banning order is only a struggle at the top of Hollywood, and it has no effect on the ordinary class.

Tang En Pictures' acquisition of Good Machine Films and Dick Clark Television Production Company is proceeding in an orderly manner.

The acquisition process of Good Machine Films is going smoothly, and it will definitely be completed within this month; because Dick Clark Television Production Company is a listed company, the privatization process is relatively long, and it is estimated that it will take more than 3 months.

When he arrived at the company, Bill McNick told Twain that he had already talked with the heads of several major film companies, and everyone generally expressed their support for Twain Films.

This was the result that Tang En had expected a long time ago. He snorted coldly, "The cat cries and the mouse pretends to be merciful!"

Bill McNick was slightly taken aback, "You are..."

Tang En said: "Let's leave this matter to Mr. Ovitz. The inside story will be discussed later. Bill, I need a document now. Please help me prepare it. I will go to Michael Ovitz this afternoon."

"Preparing Files?"

Bill McNick was a little surprised. He was the president of Dunn Films, not Dunn's secretary. He didn't need to appear in person for such trivial matters as preparing documents, right?

Tang En explained: "You used to be in charge of Twentieth Century Fox. I need a copy of Fox's profitability in the past few years. It doesn't have to involve commercial secrets, mainly the internal rate of return of the film. And you have a wide network. I also figured out the situation of a film company."

...

At 2 o'clock in the afternoon, Tang En went to the AMG brokerage company with the documents he had sorted out and accompanied by his secretary.

Michael Ovitz also sorted out a thick stack of documents and waited for a long time.

Today's meeting is very important, not only to come up with a solution to help Tang En Pictures solve the current predicament, but also to plan a correct development path for AMG Brokerage Company.

The two met, exchanged a few simple greetings, and then got to the point. Michael Ovitz said: "The situation of Tang En Pictures is very serious now. The six major companies are likely to cooperate with each other, and the momentum will be stronger than the suppression of DreamWorks." Still violent."

Illa Fisher, the little secretary sitting next to Tang En, looked a little nervous, and the pen holding the conversation record in his hand was trembling a little.

Tang En's expression was as usual, and he said calmly: "There are no permanent enemies, only permanent interests. There is no room for relaxation in the conflict between Tang En Pictures and Disney. Even if Disney stops, I will not let it go! Therefore, we must let others The Big Five companies see real potential benefits."

Michael Ovitz glanced at Tang En appreciatively, "That's right, that's what it means! These established film and television companies have a huge foundation and a huge audience, and they might not take the benefits of playing small things to heart. "

Tang En nodded, "That's right, there must be enough benefits to make them tempted!"

"Film company, what is the most lacking?"

Michael Ovitz was not in a hurry to say the answer, he glanced at Tang En, and Tang En also smiled slightly, the two of them spoke in unison, and said one word: "Funds!"

That's right, it's money!

Regardless of the movies produced by Hollywood, they account for almost one-third of the total global box office every year, but can movies really make money through the box office?

Twain obtained clear data showing that in the past few years, less than 7% of Hollywood movies have generated profits through box office revenue!

In other words, if there is no peripheral copyright income, more than 93% of Hollywood movies will lose money!

This is also the reason why traditional film companies are either acquired by media giants or transformed into media giants themselves. Because movies want to make money, they rely on the income from intellectual property rights driven by a wide range of channels.

Therefore, for large groups such as Sony, Time Warner, Viacom, and Disney, they do not rely on their film companies to make money at all. In fact, the income of the film market including Columbia, Universal, and Paramount is not optimistic.

The reason why these large groups are keen on the film industry is because films can bring unparalleled advertising effects and company prestige. In other words, making films is the "image project" of these companies!

Such a reason has led to a result: the head office will not invest money in the film company. Anyway, the film company has very little output in a year, so it can survive, keep making movies, and do a good job of "image project" for the head office. "That's fine, don't expect this industry to make money.

Therefore, the problem of funding is a difficult problem that every film company must face.

Tax rebates and pre-sale copyrights are the best financing methods.

For example, Warner Bros.' disaster blockbuster "The Perfect Storm," released this summer, had a budget of $140 million!

Even the well-established Warner Pictures would not be able to place such a big bet. In fact, Warner only paid $65 million of the $140 million cost.

Where did the remaining $75 million come from?

Warner received $25 million in tax rebates from Germany and the United Kingdom. Especially the German tax refund is very important. Back then when Twain filmed "Spider-Man", he took advantage of this legal loophole because of insufficient funds.

Furthermore, it is copyright pre-sale.

When the "Perfect Storm" project was established, Warner relied on its global influence and heritage, relying on the appeal of the male number one George Clooney, and played the routine of pre-selling copyrights.

Through the pre-sale of copyrights in Japan, Britain, Australia, Italy, France and other countries, it successfully obtained 50 million US dollars.

Although "Perfect Storm" will not be able to obtain box office revenue in these countries in the future, this greatly reduces the risk that Warner will take after "Perfect Storm" fails.

Facts have proved that Warner's strategy has been very successful.

The current North American box office of "The Perfect Storm" has earned 150 million U.S. dollars in revenue, and Warner Pictures has already paid back its capital through the North American box office market alone.

The remaining box office revenue from other overseas regions, as well as revenue from peripheral copyrights such as DVDs, video tapes, and TV broadcasts, will all be net profits.

But... "The Perfect Storm" is not representative of all Hollywood movies.

This type of "financing game" is only aimed at commercial blockbusters with a strong cast and a top-notch production team.

Because the tax rebate policy is aimed at the future profits of movies, how likely is it for niche movies to make profits in the future?

Moreover, pre-sale copyrights are usually purchased by overseas film producers after watching the sample films. Only a commercial blockbuster with a strong lineup will give overseas filmmakers enough confidence to dare to give money when the project starts.

"Hollywood's financing methods are too powerful." Tang En sighed.

Michael Ovitz shook his head disapprovingly, "Twain, it's the 21st century now, times have changed!"

"Oh? How do you say it?"

"I can give you a set of data. Ten years ago, Hollywood movies could get as much as 80% of their budget through pre-sales! There are even some movies that Hollywood can start without spending a penny. .But this year, do you know how much this data has dropped to? 47%!"

Tang En nodded suddenly, "This is the trend of the times. Ten years ago, Hollywood movies were synonymous with blockbuster movies, and the whole world flocked to them. But now, the movie markets in many countries have developed, especially in Korea, Japan, Australia, and Germany. , and in some Eastern European countries, the film industry is developing very rapidly, and Hollywood films no longer have the appeal of the past.”

"That's right, in order to encourage the development of domestic films, many countries have introduced policies to suppress Hollywood films, which makes it very difficult for Hollywood films to play the 'financing game' of pre-selling copyrights as in the past."

Michael Ovitz's words reminded Dunn of something, "I heard... Germany is actively changing the "Tax Law" so that film investment can no longer be hidden behind the "Copyright Law". If this road is dead In the future, it will be impossible for Hollywood movies to obtain a large amount of funds through the tax rebate policy.”

"That's true!" Michael Ovitz nodded again and again, fully approving, "After more than ten years of development, the Germans have figured out the Hollywood routine, and the Deutsche Mark is the one who has taken advantage of Hollywood movies. For example, "In the Disc" In Mission: Impossible 2, one-third of the budget was paid by German investors, but after seeing the benefits, Paramount directly kicked out the German investors in "Mission: Impossible 2."

Tang En sighed, "Money is the root of all evil. If Hollywood continues to develop like this, it will be difficult to obtain financing from overseas!"

Michael Ovitz said with a smile: "I just saw this sign, so I planned to create a one-stop shopping all-round service for AMG on the basis of the original CAA integrated package service."

Tang En praised: "This is a good idea, I support it!"

Now, overseas funds are tightened, and Hollywood is facing financing problems.

The financing here refers to the financing of the film, not the financing of the company.

Rich people in the Middle East and Asia are of course willing to raise funds for film companies and join the board of directors. With the help of the platform of big film companies, they have the right to speak in Hollywood.

But financing a film is different. To put it bluntly, this is venture capital. Investors have no right to interfere with the production of the film, let alone the running of the company. They can only get dividends, and they don't even have copyright.

In this situation, even if they can make money, the rich and powerful will not like it.

If Twain and Michael Ovitz could join forces to solve the financing problems for the major film companies, let alone suppress Twain Films, they would wish to confess Twain like their ancestors!

Michael Ovitz said bitterly: "This is a good idea, but the basis of one-stop shopping is to have enough stars and excellent agents. If you can't even do this, how can you talk about attracting investment?"

Tang En's eyelids flickered slightly, and a smile crossed the corner of his mouth.

For the first time since meeting Michael Ovitz, he developed a superior self-confidence.

Even in front of the super-capable Hollywood legend Michael Ovitz, Twain has enough capital to "guidance" the other party with his forward-looking vision.

This is the sense of superiority of foresight.