[Chapter 657: Sudden News]
After his heart bypass surgery, although Michael Eisner was repeatedly reminded by his family and doctors to rest, he found himself in his office at Universal headquarters before 7 a.m. on that new day. This morning at 10 o'clock, Firefly Group was set to officially auction off its hand-drawn animation division at the Beverly Hilton Hotel.
Opening the brand new IBM desktop computer on his desk, Michael Eisner quickly clicked the top link on Yahoo's entertainnt portal, reading the detailed asset list of the animation division set to be auctioned with mixed feelings.
Even now, Michael clearly rembered how in 1986, under the suggestion of Bill chanic, then head of the ho entertainnt division, the managent team had begun to release Disney's classic animated films despite pressure from all sides.
Before that, industry insiders and even those within Disney had estimated the value of the hundreds of films in the Disney film vault at only $200 million. However, Disney's first attempt to release the ho video of Pinocchio from 1940, which incurred a hefty marketing cost of $7 million, sold 1.7 million copies within a year, generating $51 million in revenue. Subsequent releases like Sleeping Beauty and Cinderella surpassed the $200 million valuation placed on the Disney vault.
Having witnessed the resurgence of Disney's 2D animated films at the end of the 1980s, Michael Eisner felt that he understood the value of Disney's animated films better than anyone else.
When Firefly announced it would package and sell its animation division, Michael's first thought was a determination to acquire it at all costs. Even without the box office bonanza of The Lion King, he believed he should pursue this goal.
However, the reaction of Panasonic, Universal's parent company in Japan, dampened Michael's spirits. Panasonic's interest in the entertainnt sector had never been particularly enthusiastic; they had originally followed Sony's lead in acquiring Universal out of concern about being left behind by competitors in the electronics industry.
In recent years, Panasonic had realized that owning a Hollywood studio did not significantly benefit its electronics sales, and they understood that from the start, they had been heavily taken advantage of by Hollywood. Unlike Sony, which still held onto so hopes, Panasonic had lost much interest in continuing to operate Universal and was unlikely to shell out tens of billions of dollars for an animation division.
After a month of futile trips to Japan seeking support from Panasonic, Michael Eisner finally saw a glimr of hope. The success of The Mummy brought Universal a very attractive financial report, and Panasonic decided it was ti to cash out on Universal. Coincidentally, the Seagram Group from Canada expressed its desire to break into Hollywood, and discussions quickly entered a secret negotiation phase.
As the captain of Universal, Michael Eisner was naturally part of those negotiations. During this process, he recognized the keen interest that Seagram's CEO Edgar Bronfman had in the dia sector and seized the opportunity to persuade Bronfman to acquire Disney's animation division before finalizing the deal for Universal. Encouraged by the success of The Lion King, Bronfman agreed without much hesitation.
As ti passed, Michael was pulled from his thoughts by a knock at the door from his secretary: "Mr. Eisner, Mr. Bronfman has arrived."
Michael stood up, adjusted his suit, and greeted the tall, bespectacled man with a beard who walked in.
After exchanging warm greetings, Michael said, "So, Edgar, let's head out now."
Edgar Bronfman hesitated slightly, replying, "Michael, shouldn't we wait for Mr. Ovitz?" Michael shook his head slightly, explaining, "Edgar, if you're sure about acquiring Universal, perhaps we should set aside so ti to discuss Michael's situation in detail. But today, let's focus on the Disney animation division."
From Michael's expression, Edgar realized that the recent rumors regarding Michael Eisner's rift with his long-ti friend Michael Ovitz were indeed true. However, after Michael's comnts, Bronfman did not bring up Ovitz again, and the two left for the Beverly Hilton together.
...
After spending a sweet night together, Nicole, although eager to attend the animation division auction with Eric, had to fly to New York early in the morning with her agent, Pat Kingsley, to discuss a film offer. Following the success of The Mummy, Nicole planned to take on an art film during the break before production of The Mummy sequel, both to hone her acting skills and improve her chances of a nomination, hoping to change her image as just another pretty face in the opinions of critics.
Eric kindly saw Nicole off at the airport before heading to the Beverly Hills Hilton.
...
Upon getting out of the car in the parking lot, Eric spotted Kelly approaching him with a blue folder. He said, "I'm really sorry, Kelly, sothing ca up."
Kelly noticed the faint scent of cologne on Eric and, though her expression didn't change, she couldn't help but remark, "You don't have to apologize to ; you're my boss."
Eric was surprised to see this typically sharp and capable assistant showing a hint of jealousy. He moved a step closer to comfort her by wrapping an arm around her waist when a black Cadillac pulled into the parking lot, ruining the mont.
Startled by Eric's move, Kelly took a step back, ready to protest, when several people stepped out of the Cadillac and walked toward Eric.
...
"Eric, long ti no see," Michael Eisner said as he approached, shaking Eric's hand. He introduced the middle-aged man beside him: "This is Edgar Bronfman, CEO of the Canadian
Seagram Group."
Eric, already familiar with the auction participants, responded warmly, "Hello, Mr.
Bronfman."
"Mr. Williams, great to et you," Edgar Bronfman said with a smile, although he felt a bit strange referring to this young man -- twenty years his junior -- as "Mr. Williams."
Due to the differences in statuses of the buyers and sellers today, the two n shared only a few casual remarks before Michael Eisner and Edgar Bronfman moved on with their entourage.
...
Watching them leave, Kelly smiled and remarked to Eric, "You always manage to make newcors feel quite uncomfortable."
Eric knew Kelly was referencing Bronfman's reaction, and he just chuckled. The Bronfman family, who owned Seagram, had rapidly risen in Canada by capitalizing on the opportunities presented by Prohibition in the 1920s and 30s. Although they still operated in the liquor business, they had beco a diversified conglorate. Edgar Bronfman was the third generation of the Bronfman family managing hundreds of millions in business, yet in front of Eric, this "third-generation heir" struggled to exude any sense of superiority. Curiously, Eric recalled what Edgar looked like and asked, "Is Edgar Bronfman Jewish?"
"Yep," Kelly nodded. "Bronfman is a typical Jewish surna."
"Seagram hasn't even acquired Universal yet, and they're already setting their sights on Disney's animation division. The two combined could require $10 billion in cash, and both Panasonic and Firefly only accept cash paynts," Eric said, growing a bit conspiratorial as he leaned closer to Kelly. "Hey, do you think there might be so secret organization like the Freemasons trying to invade Hollywood?"
Kelly shot him a look, saying, "Seagram purchased 24.3% of DuPont in 1981. This past April, DuPont initiated a stock buyback agreent, ultimately buying back the shares held by Seagram for $9 billion. That's where their cash for acquiring Universal and the animation division cos from."
Eric glanced at his watch as he led Kelly toward the elevator to the underground parking garage, saying, "$9 billion, huh? They could be doing anything else with that money. For outsiders, buying a film company seems pretty foolish."
Kelly countered, "With the film market's average annual growth rate of 9%, even if Seagram doesn't succeed after acquiring Universal, they could still profit from reselling it."
Eric pondered for a mont and agreed that Kelly had a point.
He recalled that in the original tiline, Seagram sold Universal back to Vivendi several years later due to various issues, and Vivendi floundered with it before eventually handing it off to General Electric. However, even without stellar performance, Universal never fell into the disarray that MGM did. Plus, now that Michael Eisner was in control, it seed unlikely that Seagram would take a massive loss if their venture eventually didn't pan out. However, if Seagram forced a hefty investnt under Michael Eisner's urging to acquire Disney's hand-drawn animation division, the future scenarios would surely differ significantly.
Unlike Paramount or Ti Warner, Universal and its parent company MCA were likely to remain foreign-owned now and in the future. According to federal laws, foreigners were prohibited from owning Arican television stations, which restricted Universal's path toward becoming a comprehensive dia conglorate. This ant Universal's risk resistance would fall far short of that of larger groups like Firefly, Paramount, and Ti Warner. If they acquired the hand-drawn animation division, which was destined to fall into trouble, Universal would almost certainly face significant challenges in that area in the upcoming years. With the music record industry also likely to suffer under the impact of the internet, the possibility of Universal ending up in a predicant like MGM was far from
impossible.
It seed that Kelly and Eric shared the sa train of thought, as she curiously asked, "Eric, which company do you hope secures the animation division today?" "Paramount, I guess. I don't want Warner to decline that quickly; I'd rather see them compete with Firefly for a few more years. Of course, whoever ends up with the hand-drawn animation division, it's good for Firefly since it ans one of our competitors will be in serious trouble
because of this burden."
...
As they continued chatting, they quickly arrived at a eting room inside the Hilton Hotel. Jeffrey Katzenberg, who was to preside over the auction, was already pouring over a docunt, muttering to himself. Upon seeing Eric and Kelly enter, he rely nodded in
greeting.
Eric chatted for a while with Frank Wells and several executives before realizing it was almost
10 o'clock. He, along with the others, left the eting room to enter the auction hall. Although dia reporters had been kept out, a significant number of people still filled the
large room with over a hundred seats.
Eric greeted each Hollywood mogul who ca to bid or simply observe before taking a seat in
the back with Frank Wells and others.
...
At 10 o'clock, Jeffrey Katzenberg confidently approached the auction podium. As the murmurs in the audience quieted down, he spoke into the microphone, "Ladies and gentlen, welco to today's auction. As you all know, the 2D animated film The Lion King, which premiered on June 24 of this year, has already grossed an astonishing $670 million worldwide. This is an incredibly encouraging ssage for Hollywood, signaling that the animated film market is about to enter a brand new era. However, due to strategic developnt considerations within Firefly Group, we regrettably decided to sell our hand- drawn animation division in its entirety."
After a brief opening remark, Katzenberg continued, "Although you all have received the detailed asset list, allow to briefly introduce what we are auctioning. In addition to the listed assets, Firefly Group has also decided to ease the buyer's short-term financial burden by extending the originally set one-year paynt deadline to three years."
As soon as Katzenberg finished speaking, a murmur rippled through the auditorium.
This news was too sudden; all the bidders were caught off guard by Firefly's decision.
Of course, the purpose behind Firefly's move was easy to guess. Offering buyers ample ti to pay ant they could likely drive up the prices.
Soon, an older voice cut through the hushed murmur of the crowd: "Jeffrey, I request a pause
in the auction; I need to discuss this with my team." Everyone turned to see that the speaker was Sumr Redstone, CEO of Viacom.
Katzenberg readily agreed, maintaining his smile, "Of course, Mr. Redstone. The bidding will
be delayed by half an hour. Please feel free to discuss if anyone needs to."
*****
spatreon/Sayonara816.
User Comments
0 comments from readers