[Chapter 584: Count You Brave]
Even though Berkshire Hathaway, owned by Warren Buffett, and Tom Murphy's trodia didn't have absolute control over ABC, the fact that the two companies held close to 40% of the shares ant that it would be quite easy for Buffett to convince the board after he ca to a private agreent with Firefly Films.
However, ABC was not entirely united. While Buffett's stance was firm, it didn't an that other major shareholders at ABC were uninterested in reaching a deal with Firefly, especially considering that Firefly had been turning huge profits ever since its inception. In fact, towards the end of last year, during Buffett's private discussions with Firefly, so shareholders openly expressed dissatisfaction with Buffett's secretive negotiation tactics.
After Firefly released its financial report for 1993, many investnt firms holding shares in ABC beca more eager to facilitate the transaction. After all, so benefits appeared to be easy to calculate. With Firefly's profitability, even if ABC's original shareholders only retained a 30% stake in the rged company, as long as Firefly's profitability didn't drastically change, the annual profit dividends for shareholders would be nearly the sa as they received while holding ABC shares. In addition, they could acquire a significant amount of cash through this equity transaction for other investnts.
Following Firefly's open invitation for acquisition talks after negotiations with Buffett fell through, the ABC board swiftly passed a resolution to initiate formal negotiations with Firefly.
...
On February 10, after receiving an official reply from ABC, Jeffrey Katzenberg and Firefly's lead attorney, Edward Lewis, led the acquisition team to New York to comnce formal acquisition discussions.
Unlike the straightforward equity and debt situation at Firefly, ABC's circumstances were more complex. Chris had facilitated the involvent of a Morgan Stanley team as consultants.
In the initial acquisition of Disney, both parties had enjoyed a very pleasant collaboration. Although Firefly had changed dramatically since that ti, the company's extensive administrative resources ant that it wouldn't have to fully rely on Morgan Stanley. Nonetheless, Morgan Stanley remained enthusiastic, and the entire Wall Street could see that this was a deliberate effort to curry favor with Firefly.
After negotiations, Firefly planned to implent a large-scale debt financing program for the acquisition, and that was a primary business for investnt banks, providing significant profits compared to occasional rgers and acquisitions.
Eric didn't head to New York with Katzenberg but stayed in touch by phone every day to communicate negotiation updates.
Before Katzenberg left New York, the higher-ups at Firefly had already discussed the acquisition's bottom line in detail. After several discussions, Eric authorized Katzenberg to offer a maximum of 25% of Firefly's shares, with the cash portion being flexible up to $10 billion.
That figure wasn't arbitrary, considering that both Firefly and ABC were performing quite well. Hence, no one doubted that their rger would have a synergistic effect. Under the best performance expectations, once they rged, Firefly's profits could potentially reach $2 billion in the following years. Thus, the shareholding returns of shareholders holding 25% stakes would be comparable to the annual earnings from ABC shares at that ti. This made the figure relatively easy for ABC to accept.
Of course, no one could predict the future, except perhaps Eric. The rged Firefly could either experience an explosion in revenue and profits or, under the burden of heavy debt from a $10 billion acquisition, spiral into ruin.
Eric remained optimistic about the deal. Although in the original tiline Disney faced years of poor performance after acquiring ABC, the main reason was Michael Eisner's managent issues. After Eisner left, Disney quickly revitalized, soaring ahead of rivals like Ti Warner and News Corp in scale and profitability. This all proved that the acquisition was correct. As for the heavy debt burden post-rger, Eric wasn't concerned. The late 1990s would be a period of rapid economic growth in the United States, with all sectors, including entertainnt, seeing substantial increases. Moreover, with Eric's layout in the technology sector, even if Firefly encountered trouble, he could easily raise enough funds through various channels to resolve any crisis. Besides, he felt the likelihood of such issues arising was low.
...
Since last year, Eric had repeatedly requested to expand Firefly's 3D animation division. However, during this era, 3D animation technology was just erging. Other than Pixar, there weren't any sizable 3D animation companies in North Arica or even worldwide, forcing Eric to adopt an internal training chanism. Alongside expanding Pixar, Disney's traditional hand-drawn animation departnt had stopped hiring and started training traditional animators and gradually began transitioning towards computer animation.
While keeping close contact with Katzenberg in New York, Eric had primarily focused his energy on his animation divisions. To that end, he personally led a collaborative eting between Pixar and Disney's animation departnts.
Disney's animation departnt had completed The Lion King and had begun preliminary promotions. Besides The Lion King, there were several other animated sequel projects, including Aladdin 2. Due to the longer production cycle of hand-drawn animation compared to 3D animation, these projects had already been confird before Firefly acquired Disney. However, Eric had stopped approving new hand-drawn animation film projects and had been quite clear that if Disney's existing traditional animators were unwilling to undergo training for computer animation, once their current projects were completed, they would only be left to work on low-budget projects for Disney Channel.
Most of the traditional animators at Disney were relatively young, and possessing highly skilled drawing abilities, completing training for computer animation software shouldn't be too difficult. To prevent a backlash from the hundreds of traditional animators, Eric promised to give them ample ti to learn and adapt, covering all costs associated with their training.
...
The Pixar staff attending the eting gradually exited the Disney animation studio headquarters in Burbank. John Lasseter, who walked alongside Eric at the front, said, "Eric, although no one openly opposed the decision, I feel a lot of people in the studio are still very resistant to this change. You might encounter so trouble."
Eric was fully aware of this; Disney's animation studio had over 700 traditional animators. While more than 70% were around 30 years old, there were still so who were veterans from the Walt Disney era. These individuals would find it nearly impossible to adapt to the new animation production thods, and with that, being phased out was almost inevitable. In this context, no one would stand idly by. The reason there hadn't been any opposing voices earlier was largely due to the overwhelming advantages exhibited by Pixar's 3D animation. Also, Eric's sudden announcent left many unprepared, prompting no one to act as the 'early bird' without preparation.
"They all understand the advantages of 3D animation over hand-drawn animation. Both Toy Story and A Bug's Life have proven this, so this transition is inevitable," Eric said while walking with John Lasseter. "If they can't make this shift, Firefly will have no choice but to lay them off. I've done all I can to give them about two years' worth of traditional animation projects to work on. They have a good amount of ti. If they really get laid off, they surely won't be left without an option, as many TV channels need traditional animators for children's animated
shows."
Having worked at Disney for a long ti, Lasseter sighed inwardly at Eric's words. But he knew first-hand how ruthless capital could be. Although Eric was not a harsh boss, he wasn't a philanthropist either. Achieving such a balance was not easy. Other companies might have simply announced layoffs without granting employees such a generous ti to adjust.
...
It was still early. Due to their busy work schedules, Lasseter and others didn't plan to stay overnight in Los Angeles. Eric arranged for a private Firefly corporate jet to return the group
to San Francisco.
Eric initially intended to personally drive John Lasseter and others to Santa Monica Airport. However, as they entered the parking lot, he noticed Elisabeth, wearing sunglasses, stepping out of a red BMW and waving him over.
"Eric, I think we need to head to Santa Monica ourselves," Lasseter said with a smile, noticing Elisabeth's graceful figure, causing others to chuckle.
Once Elisabeth approached, Eric made the introductions. Seeing her hesitating to speak, he decided against driving Lasseter and the others. Thankfully, they were not overly concerned about the details. They bid farewell to Eric and got into their cars.
After everyone left, Eric walked with Elisabeth to her red BMW. He playfully knocked on the hood and asked, "New car?"
Elisabeth put her sunglasses back on and raised her chin teasingly, "I bought it six months ago. In your world, where you never care about others, calling it 'new' isn't wrong." Seeing no one around, Eric reached out and pinched Elisabeth's chin, grinning, "Don't you think if you need sothing from , you should keep your 'little claws' to yourself?" Elisabeth dramatically swatted Eric's hand away, replying confidently, "We already completed the acquisition of Miramax."
With work near the day's end, Eric didn't want to be the center of attention, so he opened the car door and got into the red BMW, inhaling the faint scent of perfu in the cabin. He asked Elisabeth, who climbed in behind him, "Oh, how much did it cost?"
Elisabeth started the car and slowly pulled out of the parking lot, stating, "$100 million for 90% of Miramax's shares, the Weinstein brothers retain 10% and continue to manage Miramax's operations."
"That's a bit pricey, but letting the Weinsteins keep so shares is a smart move. Otherwise,
if they left, Miramax wouldn't hold much value." Elisabeth replied, "If they both leave Miramax, the company's value would diminish anyway. With News Corp backing us, those profit-driven brothers won't leave easily."
Eric added, "The Weinsteins had enough of funding shortfalls in the past few years. Initially, they'd certainly cooperate well with 20th Century Fox, but everyone has ambitions. Once you can no longer accommodate these brothers' ambitions, things will fall apart." Elisabeth, who was personally involved in negotiating the Miramax acquisition, knew exactly what kind of people the Weinsteins were: "If it cos to that, we can let them go. Fox can't let
them take the lead."
As Eric watched Elisabeth turn onto the freeway, he rembered to ask, "Where are you
taking ?"
Elisabeth responded nonchalantly, "The higher-ups have decided to let the Weinsteins
personally oversee the production of Braveheart, which was your original idea, so we're all
going out for dinner to discuss it."
Eric felt taken aback by Elisabeth's assertive tone, hesitantly asking, "Isn't Firefly competing with Fox? Am I supporting the enemy by doing this?"
"It counts!" Elisabeth nodded emphatically. "If you don't want to, that woman nad Sophie
Marceau can just leave."
"Alright, I'll concede that you're tough."
"Hum..."
The eting took place at a fancy French restaurant in Beverly Hills. Upon Eric's arrival, the Weinstein brothers welcod him warmly, while l Gibson appeared rather aloof. Eric sensed that either he was lost in success or just lacked social skills. However, l Gibson's agent, Ed Limato, was exceptionally cordial.
Eric recalled that Limato had been l Gibson's manager since the early '80s, remaining with
him for over twenty years until his passing. Ed Limato was twenty years older than l
Gibson, and their relationship was as close as father and son. However, he couldn't quite recall Ed Limato's exact date of death. If Limato's passing coincided with l Gibson's career decline, it would mirror Tom Cruise's situation. It also served as a reminder of how crucial a
good manager could be.
*****
spatreon/Sayonara816.
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