Chapter 1175: Chapter 1177: CollisionChapter 1173: Chapter 1175: We Don't CareChapter 1171: Chapter 1173: CounterasuresChapter 1169: Chapter 1171: The Two GiantsChapter 1167: Chapter 1169: Yahoo's Next MoveChapter 1165 -1167: Cancelling the Profit Sharing
[Chapter 1167: Cancelling the Profit Sharing]
Eric made a brief stop at Ventura Airport to transfer with Steve Ballr, and the Boeing 747 took off again, heading to Australia.
During the 16-hour journey from the East Coast of the U.S. to Australia, Eric spent most of his ti going through the IMG information that Cindy had handed to him the previous night. The more he learned, the more intrigued he beca with the comprehensive agency that IMG represented.
It could be said that IMG was a well-oiled talent agency chain, starting from grassroots talent developnt all the way to the distribution of end products.
IMG initially rose to fa through the representation of sports stars.
In the 1960s, IMG founder Mark McCormack, then a lawyer, managed to et several prominent golfers due to his love for the sport. It was by chance that he had the idea to establish a professional agency to help these golfers with their business dealings, and thus, IMG was born.
Over the next thirty years, IMG steadily grew and developed.
Although IMG couldn't represent stars from mainstream sports like football, basketball, or soccer, it successfully managed so of the world's top athletes in relatively niche sports like golf and tennis. Even if Eric wasn't particularly interested in golf or tennis, he could recognize stars like Tiger Woods, Andre Agassi, and Anna Kournikova from IMG's roster.
Moreover, IMG established a comprehensive sports academy in Florida covering over 500 acres. By using its brand, IMG not only enrolled students for profit but also tapped into its global network of sports scouts to nurture potential talent.
Russian tennis star Anna Kournikova served as a pri example of IMG's operations. Discovered by an IMG scout at the age of ten, the Russian girl received training at IMG's Nick Bollettieri Tennis Academy.
Under IMG's careful branding, the eighteen-year-old Anna Kournikova, while not the most powerful player on the circuit, had beco one of the highest-earning tennis stars, raking in over 10 million dollars a year thanks to her striking looks and IMG's managent.
Although it had gotten a later start, IMG's modeling agency still perford strongly in fashion representation. For instance, in recent years, Forbes had begun publishing its supermodel earnings list. Though the Victoria's Secret models dominated the top spots, IMG -- comprising only about 300 models -- managed to place just as many supermodels on the inco list as its competitor, Elite.
Unlike Hollywood agencies that typically took a legal 10% commission, IMG's commissions for stars and models could soar up to 30%, significantly boosting its revenue.
The strength of IMG's talent representation business stemd mainly from IMG Academy, which owned the rights to conduct sporting events and fashion activities. Unlike IMG's sports academy, IMG Academy was unrelated to education but operated as a subsidiary that managed the licensing rights for hundreds of global sports and fashion events.
IMG's close involvent spanned nurous high-profile events like the Wimbledon Tennis Championship, the World Golf Championship, the Miss Universe Pageant, and the Miss Arica Pageant, alongside countless collegiate league championships.
Through hundreds of varied events held globally each year, IMG not only earned substantial hosting revenues, but also utilized these platforms to promote its sporting, fashion, and even musical stars. This advantage allowed IMG to secure more endorsent contracts from considerable sponsors.
Furthermore, IMG dia produced a wealth of docuntaries on sporting and fashion events, further tapping into their comrcial potential for maximal profit for IMG.
In both Hollywood and the internet sector, Eric pursued a comprehensive industry chain strategy, a core elent of his personal investnt philosophy. IMG perfectly aligned with Eric's pursuit of the ultimate corporate model.
As a result, still on the plane, Eric reached out to Cindy in New York to discuss buying IMG in its entirety, in addition to the McCormack family's stake.
...
There was a 14-hour ti difference between the East Coast of Australia and the East Coast of the United States. Eric took off from Long Island Airport on the morning of August 7, and after sixteen hours, his private jet landed at Canberra International Airport, where local ti was already 4 PM on August 8.
The won and children had been staying in the northern Kensington area of Sydney for more than two months, but while on the plane, Eric learned that they had already headed for the Perisher ski resort in southern Canberra. Consequently, he adjusted his itinerary and decided to land in Canberra.
August was the pri season for skiing in Australia, and the Firefly Group executives were set to gather at a private resort near Perisher. Unlike previous occasions, this ti, many executives brought their families, turning the get-together into a vacation as well.
Perisher Ski Resort was just over a hundred kiloters from Canberra, but winding mountain roads delayed Eric's group, causing them to arrive after dark.
The main activities for the gathering were to comnce the following day, and most had already arrived. The private resort across the hill from Perisher had been booked by the Firefly Group.
By the ti Eric's group arrived, a barbecue party was already underway, and Drew rushed over to give him an enthusiastic series of kisses. Afterward, he picked up his timid son, who had been shyly approaching, and greeted everyone.
With all the key executives of the Firefly Group -- Yahoo, Nokia, Cisco, Qualcomm, and their families -- over a hundred people gathered for the weekend.
Even after the usual pleasantries, it ate up more than ten minutes.
...
After settling in briefly, everyone congregated in the center of the resort for barbecue. Although it was winter, the lodge was surrounded by hills on three sides. With so many people crowded around the multiple bonfires, it didn't feel too cold.
"Take the cable car to the north, and across the mountain is the ski area. Everyone has already been there, Eric, guess who among us is the best skier?"
Seated at a bonfire with Katzenberg and Ian Gurney, Eric still held onto Kevin in his lap with one hand while managing a tray of grilled at with the other. Without missing a beat, he replied, "It must be Frank, right?"
Though over sixty years old, Frank Wells loved adventure sports. Had Eric -- the 'butterfly' -- not appeared, Frank might have died in a helicopter crash during skiing several years prior.
"That's right! It's surprising to find that us youngsters can't match up to an old guy. Everyone's feeling a bit deflated these past few days," Katzenberg joked, glancing at little Kevin in Eric's hold. He then added with a chuckle, "Kevin, you're already a little man. It's not good to always be clinging to your dad."
When Eric arrived, he noticed Virginia nudging Kevin closer to him, realizing her intentions. He continued to hold onto his son for now.
Because of Joanna, many Jewish upper-echelon individuals from Hollywood had clearly shown a certain affinity towards Hawaii. This tendency of many groups to rally together was quite common, especially among Jews. Eric couldn't change that.
Moreover, due to her exceptional intelligence, Hawaii had unwittingly made a good impression on figures like Jeff Bezos and Steve Mitnick, along with the Chris couple from the
Firefly investnt group.
It was clear that following this trend, as the heir to the Williams family, Kevin would have little competitive edge in the face of Hawaii, aside from so gender advantage.
Now, Cindy was about to bring another little one to the Williams family, which made Virginia's feelings of insecurity understandable.
Looking not far away at Hawaii, who was in a serious discussion with Jeff Bezos, and at Emma, happily playing with several girls her age, Eric smiled and told his son, "Go find Mommy, and in a few days, Dad will take you skiing after work."
As Kevin walked away, politely saying goodbye to everyone before he left, Ian Gurney smiled
and remarked, "He's a thoughtful kid; just a bit too shy."
Eric picked up a skewer of kebabs and said, "He'll grow out of it. I was shy too when I was
little."
...
They chatted casually for a while, and after Eric finished his skewers, he got up to head to the grill. Katzenberg followed him, saying, "Eric, I heard you asked Carolyn to draft the profit distribution plan. I think we should completely cancel the profit sharing; that money could perfectly support the group's next expansion plan."
The Carolyn that Katzenberg referred to was Carolyn Elliott, the Chief Financial Officer of the
Firefly Group.
Eric placed so food on the grill, fiddling with it as he replied, "I'm feeling a bit undecided too; let's discuss it more in the coming days."
As per the established plan, the primary targets for the Firefly Group's next expansion were focused on telecommunications and cable companies, aid at bridging the gaps in Firefly's platform across the internet, mobile communications, and cable TV.
However, as the Firefly Group had reached its present scale, it was virtually impossible to
continue picking up small bargains.
Both of these planned telecommunications entities required real investnts in the tens of billions. Combined, without considering equity buyouts, the capital Firefly would need to mobilize could easily reach into the hundred-billion-dollar territory.
From this perspective, the tens of billions that Clover Fund had recently cashed out from the new tech market wouldn't suffice. After all, to further consolidate its foundation in the internet industry over the coming years, the Firefly Group still needed to continuously inject massive amounts of funds into various tech companies.
Moreover, Eric also began to harbor another concern. The Firefly Group had grown trendously, and with its internet industry layout still not solidified, further uncontrolled expansion risked complicating the group's structure if they failed to effectively digest the acquired enterprises, possibly plunging the entire organization into chaos. Therefore, Eric had been contemplating what strategic move would be the safest for the
Firefly Group in its next steps.
Katzenberg also selected several skewers to place on the grill, adding, "I've heard so news recently that AT&T is now planning to break up and sell off its broadband unit. Comcast has shown interest in expanding its scale as well. If we don't act, AT&T might very well sell that
unit to Comcast."
Eric had hardly any knowledge about AT&T Broadband. Hearing this from Katzenberg, he vaguely recalled that historically, AT&T Broadband had been absorbed by Comcast. Pausing his grilling for a mont, Eric asked, "Has AT&T made an official offer yet?"
"Not a formal offer yet," Katzenberg shook his head, saying, "But industry estimates range between 40 to 50 billion dollars. If we get involved in the bidding, the price could likely exceed 50 billion dollars."
Eric rembered that about a year ago, Comcast's market capitalization was only around 30
billion dollars, with its peak just over 60 billion. AT&T Broadband was valued slightly less
than Comcast but was now being estimated over 40 billion dollars, evidently influenced by the not fully deflating tech bubble.
If they could wait a year or two until the NASDAQ index hit a low, the total market value of Comcast, combined with AT&T Broadband, might only reach 60 billion dollars. However, once the two companies rged, it would beco far more challenging for the Firefly Group to initiate an acquisition, both in terms of capital and antitrust considerations. After a mont of consideration, Eric said, "Let's follow this quietly for now. We shouldn't
take any imdiate action."
Katzenberg nodded, adding, "Should we keep executing the profit sharing distribution?"
If Comcast intended to initiate a takeover of AT&T Broadband, the Firefly Group would need
to pre-emptively jump in.
After all, the entire Firefly Group, with its extensive cable television operations -- including the A&E Network, FFM, ESPN, Showti, Bravo, E! Entertainnt, and several cable networks from Fox -- necessitated an operational platform to support future growth, lest
they face more restrictions down the line.
Conversely, the urgency for the Firefly Group's telecommunications setup felt slightly less
pressing.
Of course, this was a relative statent.
Eric was primarily eyeing Sprint, which was also the most feasible acquisition target for the
Firefly Group.
The next few years were crucial as the telecom networks transitioned from 2G to 3G.
If they couldn't secure Sprint and commit fully to pursuing the 3G setup, Sprint risked falling
behind at the hands of stronger players like AT&T and Verizon. Once that critical transition occurred, falling behind would entrap Sprint in a downward spiral, making it increasingly difficult to catch up with competitors.
At the core, while Eric wanted to expand the Firefly Group cautiously, he didn't have the
luxury of ti in this explosive technological era.
"Let's cancel the profit-sharing plan," he said without hesitation, then added with a smile toward Katzenberg, "But it's up to you to inform the shareholders of this decision." Though detailed financial information hadn't been released yet, whispers of Clover Fund successfully cashing out a significant sum had already erged.
Among the small shareholders in the Firefly Group, whether it was Berkshire Hathaway, which was used to extracting dividends for investnt, or State Street Global Advisors, which suffered severe losses in this market crash and needed liquidity -- they all expected that the Firefly Group would carry on with the profit sharing plan.
Now, abruptly axing that plan would surely elicit protests from those shareholders. For refusing others, the assertive Katzenberg was clearly the most suitable person for the job.
"Not a problem," Katzenberg flashed a sowhat mischievous grin, then quickly adopted a serious tone, adding, "Eric, there's sothing else. I'd like to leave my bonus in the Clover Fund this year to be swapped for company stock during the upcoming acquisition process." Katzenberg's salary contract was a fixed annual salary of $750,000 plus a 2% profit-sharing plan from the Firefly Group's net profits.
Under this contract, he could expect to take ho a massive dividend of around $80 million
from this year's $4 billion gross profits, which would establish a new peak for professional managerial salaries.
Now, by voluntarily giving up that payout in exchange for future company stock, Katzenberg was essentially binding his interests to the fate of the Firefly Group.
After all, the Firefly Group was not a publicly traded company; once he chose to invest,
extracting cash would beco very challenging. If the company's performance dipped, the value of those shares could fall drastically. Plus, Katzenberg's ownership stake would hardly influence Eric's absolute control over the entire Firefly Group.
It could be regarded as being akin to signing a blood oath. Looking deeply at Katzenberg, Eric asked, "So, you've made your decision?"
"Of course," Katzenberg nodded with a smile, "Unless you have any issues on your end."
"I'm very willing."
As he spoke, Eric raised his left fist and nudged it slightly to the side. Katzenberg
understandingly bumped his fist lightly against Eric's.
As he placed the slightly burnt skewers of at into his dish, Eric continued, "Actually, I ca
here with another important matter to discuss. I'm thinking of establishing the Williams Trust Fund soon. Although I won't be injecting too many assets into the fund for now, I still
want to determine the board mbers of the fund in advance. Jeffrey, I hope you can join." Katzenberg, however, was sowhat surprised, even lowering his voice slightly, "Eric, is there a need for this? You're not even thirty yet!"
While there were many forms of living trusts, Katzenberg understood that Eric was likely
setting up a testantary trust. aning, if anything were to happen to Eric, his personal assets would directly transfer to this trust fund.
In matters of imnse wealth, many millionaires often draft wills, after which disputes
among heirs or division of wealth among outsiders can arise. A living trust can minimize the potential for changes in asset succession upon the death of the trustor. However, typically, only aging wealthy figures like Redstone or Murdoch set up family trusts. Sensing Katzenberg's concern, Eric remained calm and replied, "Jeffrey, you should understand that my wealth in this world is quite unusual. If no one had any covetous thoughts
about it, that would be entirely impossible. Therefore, I want the entire Firefly system to
remain intact, even if sothing unexpected occurs. So, Jeffrey, would you be willing to join the board?"
Katzenberg completely forgot about the skewered at burning in front of him, nodding
gravely, "Eric, I promise you."
*****
spatreon/Sayonara816.
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