hollywood billionaire

Chapter 204
"In 47 minutes, all tickets were sold out."

Peter Benedek lifted his heavy old black-rimmed glasses and smiled at Jeremy Zimmer and Jim Berkus.

"Sometimes, I really wonder...why are we old guys still sitting in the conference room."

"Guy O'Shealy and Scooter Braun were still our kids, only to find out that even these so-called new generations are outdated."

"The future—whoa, I can't believe I'm saying this—but the future, it's already in Gen Z's hands."

The time is July 2016, 7, and the venue is the board meeting room of the headquarters of United Artists Brokerage Company at No. 14 Civic Center Road. Who?Of course the old ones.

UTA board chairman Jim Berkus, CEO Jeremy Zimmer, chief operating officer Andrew Toh and vice chairman Jay Suss are nine internal directors, plus Han Yi, Karen Guo and Vincent The three institutional directors of Te-Di representing Han Capital and Baihui Capital, and all twelve members of the board of directors were present.

And Philip Voss, the secretary of the board who presided over the meeting, and Jeff, the chief financial officer...

Oh, Jeff Darla Beta has just finished his financial report for Q2016 2 and has left the meeting.

The operating income of the United Artists Agency in the second quarter of 2016 has risen slightly compared to Q1. The operating income is 1.822 million US dollars, the direct operating cost is 5780.2 million US dollars, and the sales expenses, general expenses and administrative expenses are 7658.6 million US dollars. After adjustment The profit before interest, tax, depreciation and amortization was US$4780.6 million, and the EBITDA margin was 26.23%.

Whether in terms of music, sports, e-sports, comedy touring or live theater, UTA has hardly made any progress from April to June this year, especially in the comedy touring, music and sports sectors. There was even a decline in the first quarter.

One of the reasons why this happened is that the three months in the second quarter are not the prime time for live entertainment, especially in areas such as the Great Lakes and New England at slightly higher latitudes. The temperature is low, and residents' willingness to consume live entertainment is not strong.

Another reason, obviously, is that UTA doesn't have a client list strong enough in these areas to grow against the schedule.

And this is also the second time that Han Yi has participated in the UTA board meeting, and he must focus on solving the problem quickly.

It was his first time to attend the meeting, and he kept silent throughout the whole process, patiently collecting and analyzing company information. After three months of careful preparation, he was ready to take the initiative.

"Congratulations, Yi." Jeremy Zimmer is still smiling like a Buddha, "It sold out as fast as EDC."

"Where is the field, next to Circus Circus, right?" Jim Berkus asked.

"Yes." Han Yi nodded in response.

"I... went there when I was in Rock in Rio a few years ago, and the venue was unbelievably large." Jay Suss joined the conversation, ensuring that the white-haired old man sitting in the chairman's seat, and the freshman from the investment agency The communication between the blue bloods should be as smooth as possible, "The venue for 5000 people occupies an entire block."

"After the building is completed, it can accommodate 3000 people." Han Yi corrected with a smile, "Not that many."

"It's still amazing." Jim Berkus was full of praise. Han Yi's attitude towards him was the most subtle when he attended the meeting last time.Although Jim Berkus is the nominal chairman of the UTA board of directors, the communication between Han Yi and him only stays at the most superficial level.Apart from the routine mutual greetings, there was no private conversation even in terms of work.

The same is true today.

Anyone with eyes can see Han Yi's politeness and alienation towards Berkus.

In all fairness, Jim Berkus doesn't care how someone treats him.He has worked hard in Hollywood for decades, if he can't stand a little "cold shoulder", then it is impossible for him to defeat so many strong opponents inside and outside the company, and hold the high position of chairman of the board of directors of the world's third largest performing arts agency.

A young Asian boy doesn't like himself?

How strange!
When he was young, no Asians could enter this conference room!
Of course, Jim Berkus would never say something that would force him to retire as soon as he uttered it.The situation is stronger than others, and no matter how unhappy he is, he must fight hard in front of Han Yi and behave friendly and enthusiastic.

Because in the eyes of Jim Berkus, the director of the institution whose eyes are growing to the sky is the major shareholder who owns 41% of UTA's shares.

More than his and Peter Benedek's combined.

Maybe it will not affect his detached status as the founder of the company, but if you want UTA to continue to develop in the direction Jim Berkus expected, he will still be the one who wants to make UTA, not the big-tailed Jerry Mi Zimmer or Peter Benedek who has retreated to the second line, then Jim Berkus must rely on Han Yi's help.

Or at least make sure that he doesn't become a hindrance to him.

In a sense, the US$1.9 million investment of Han Capital and Parkway Capital is the poison that Jim Berkus had to take.

If investment is not accepted, UTA will be overwhelmed by CAA.Johnny Depp has confirmed that he will join his opponent, and Kanye West has also terminated his full-scale acting agency contract with UTA and returned to 2000 Avenue of Stars.

Without spending some money to hold its ground, CAA, enraged by the midnight raid, is on the verge of eating UTA alive.

However, accepting the 1.9 million US dollars means that, as long as Han Capital does not transfer shares to third parties, Han Yi will always play a huge role in the board of directors of the United Artists Brokerage Company and become any party of the triumvirate. , extremely fearful, and at the same time trying to win over the counterbalancing force.

Now that you have chosen to drive away tigers and devour wolves, you must be prepared for tigers to live at home.

How to maintain a posture and influence, not show too much humility, and avoid the various forces under him from questioning their control, and at the same time, send a signal of cooperation to Han Yi, try to change his attitude, and classify him into his own family camp.This is a question that Jim Berkus has been thinking about every day for nearly half a year.

At his position and age, UTA's external expansion is no longer Jim Berkus' top concern.

How to ensure the smooth generational replacement of one's own power within the company is the key.

"It's really remarkable, but I shouldn't be too surprised considering you're at the helm."

Thinking of this, Jim Berkus carefully considered his words, making his tone sound like a caring and caring elder.

"If I remember correctly, Jay told me that nearly half of the artists on Mad City are represented by UTA?"

"Yes." Han Yi glanced at Jim Berkus, "All the contracted artists from Han Music have their performance contracts with UTA."

This sentence has two meanings. First, it expresses the close cooperative relationship between Han Music and UTA. As long as it is an artist under Han Yi's banner, the United Artists Management Company will get a piece of the pie.

On the second floor, the reason why they were able to board Mad City was because they were contracted artists of Han Music, and had little to do with UTA.

"UTA is fortunate to have you as a shareholder and partner, and I'm looking forward to seeing where your next initiative takes us..."

"I don't think Yi is taking us, Jim."

On the side, Peter Benedek pulled the suspenders of his suit pants with his left hand and patted his belly with his right hand. He looked naive, like a grandfather who just finished a Thanksgiving meal 5 minutes ago.

"We followed him... A music festival can sell 47 million US dollars in 5000 minutes, which is much more efficient than UTA."

"Not so much, Peter."

Hearing that Benedek's comment was obviously not aimed at him, Han Yi didn't point it out, and didn't immediately make use of it. Instead, he shook his head humbly and helplessly, and laughed.

6000 single-day early bird tickets, 3000 three-day early bird tickets, 39000 single-day pre-sale tickets, 50000 three-day pre-sale tickets, 7500 single-day VIP tickets, 2000 three-day VIP tickets, plus 600 single-day VVIP tickets and 300 The three-day VVIP pass has a total of 10.84 tickets. If all of them are sold out, the revenue should be 4991.52 million U.S. dollars. After roughly deducting various expenses, the actual revenue that can fall into Han’s hands is also close to 4300 million U.S. dollars. .

Based on the top cost of US$2900 million, the gross profit of the first Mad City is also US$1400 million.

Compared with EDC and Tomorrowland's nine-figure operating income, there is still a long way to go with the stable annual gross profit of tens of millions. However, for Mad City, which has a limited venue, only one week of performances, and is held for the first time, it is already A pretty remarkable achievement.

You must know that the live performance industry, especially the field of large-scale music festivals, is extremely risky. A natural disaster, a man-made disaster, or even a round of heavy rain that does not affect normal life in the eyes of others can cause the organizers several months or even a year. The hard work of the whole year was wiped out overnight.

This is only the impact of the weather on the revenue of the music festival. To successfully hold a music festival, there are dozens of factors, large and small, waiting for the organizer to consider and balance.

What should I do if the budget is not enough and the lineup of artists is not attractive?Is it to cut off the cheap bands that independent music fans want to see, and add some top guests who can stimulate the mainstream market, or simply abandon the so-called star musicians and directly use appealing small artists in subdivided music genres?
The artist lineup was finally assembled, but what should I do if I find that there is not much budget left for publicity?Shows are packed to the brim, but no fans are talking about your festival on Instagram or Twitter, and ticket sales are slow as a turtle.Cancel the two artists and invest the budget in social media streaming, or change the way of publicity and distribution, and do offline promotion in the host city?
The venue is full of stingy and greedy capitalists, and they don’t give any facilities and services that should be provided. When it’s time to hold a performance, they add money here and there, and all kinds of expenses that have never been heard of before come out all at once. What if the music festival turns a profit into a loss?Of course, you can find a professional team of lawyers to fight head-to-head with the venue to ensure that the performance goes smoothly within the framework stipulated in the agreement, but in this way, the consulting fees spent may be more than holding your nose and admitting it.

These are the problems that plague the vast majority of organizers around the world, and are also the fundamental reasons why 95% of music festival projects do not make money, or even suffer huge losses.

Many people always think of music festivals as beautiful, find a group of well-known musicians, come and perform for two or three days, and then they can put eight-figure cash in their pockets and go home happily.

The crowds at the scene and the excitement of the melody made the organizers ignore the most important point - the music festival can create an extremely beautiful illusion for music fans, but the reality is definitely not a utopia that can be done arbitrarily.Operating a large market with tens of millions of dollars in revenue within a few days without strong financial strength, strong industry relationships, and an experienced operating team is tantamount to nonsense.

For some organizers, two of the three conditions are missing, and the projects that could have made money can only be tied.Some organizers have only one of the three conditions, and the music festival that looks promising can only record a deficit in the end.And more organizers did not have any of the three conditions. They went to the sea with enthusiasm, and in the end they were hacked by stakeholders in the supply chain, invested 1000 million US dollars, and finally returned 100 million. It is worth opening champagne to celebrate up.

Fortunately, the above situation is not what Han Yi needs to face.For him, he has all three.

Financial strength, even if Tomorrowland and Insomniac behind EDC are combined, they cannot afford the cash in Han Yi's bank account and investment fund account.Dr. Dre can't be regarded as the protagonist in the relationship between the industry and the network laid by more than [-] million US dollars.As for the operation team, without doing a single project on the site, Han can poach several executives who have been trained by Live Nation and AEG Live for more than ten years.

Coupled with the superior location of Las Vegas and the active performance market, the high-quality golden time of Halloween, the lack of large-scale music festivals in Nevada two or three months before and after, and Han Yi's full and comprehensive understanding of the music industry Understand, it would be absurd for Mad City to lose money.

The 24 groups of guests invited to this music festival can almost be said to be one of the strongest lineups that the European and American music scene can put together in 2016.That alone should be enough to secure most of Mad City's box office.

This is the reality of the performance market. In terms of profitability and profitability, the entire industry is distributed in an hourglass shape according to the level and popularity of artists.

What does that mean?

Although lesser-known independent musicians or mainstream artists who have just debuted can only perform live house, and each performance costs 200-300 tickets, most of them have no guaranteed fee.In other words, how much money they can make is completely linked to box office performance.Calculated based on the highest 60% share that newcomers can get, if you sell $1000, you will earn $600, and if you sell $100, you will earn 60 yuan.For the organizer, this sharing model is the safest. Although the profit is small, at least there is no need to pay the performance fee in advance, and each show can basically guarantee no loss.

Even if some newcomers can get the so-called "guarantee", it is basically a one-time fee, which means that they have no way to share the subsequent box office.Only well-known local artists generally offer 250 to 1500 US dollars per show, even if they can regularly sell 5000 tickets per night, such well-known regional artists can only be paid 10000 to [-] US dollars at most.

The main source of income for most small and medium-sized organizers is performances with a capacity of less than 1000 people, not because their financial resources can only support performances with a capacity of 1000 people.The Hollywood Palladium in Los Angeles can accommodate 3000 people, and the total cost of the venue rent does not exceed 1000 US dollars. Any organizer can afford it, but selling 3000 tickets for [-] people is the same as selling [-] people. Thousands of tickets, the financial risk that needs to be borne is not the same.

Do two to three performances a month, sell [-] tickets each time, calculate based on the average price of a ticket of [-] US dollars, plus wine sales and other income, you can achieve a revenue of about [-] to [-] US dollars Collect, give the artist [-] US dollars performance fee, and then pay the venue fee and labor cost, and the net profit that can finally fall into the pocket is about [-] to [-] US dollars. For small performance companies, this is already a very ideal way. status.

And go a little further up, what's the situation?

A venue with 1 to [-] people means that you need an artist who is well-known enough, but not well-known enough to play a stadium, to be the guest performer.In other words, what you need is a song hovering around the third or fourth line. If this single enters the Billboard chart, you can earn more. If the next single does not enter, the commercial value may drop slowly. Lost artist.

Just listening to this description, one can know how unstable the state of these artists is.For example, if you book a show for Desiigner half a year later, if he continues to exert his strength during the six months and his popularity and popularity are rising, then selling thousands of tickets will definitely not be a problem.But what if he sinks like this, releases a new single with rave reviews, and his private life is full of scandals?

If a show of this scale fails, it will not be able to stop the loss of tens of thousands of dollars.

Because, for an artist who can sell 20000 tickets, the general performance asking price is around 50000 to [-] US dollars.If it is a gymnasium with a scale of about [-] people, it must be in the range of [-] US dollars.Coupled with the stage design team and construction team, which are much more demanding than Livehouse and nightclub performances, and have a much larger number of people, if you are not careful, you can lose tens or even millions of dollars.

The Future Now: The Tour that Madison Bill and Billie Eilish are currently following is like this, with a stadium for 10,000 people, two headline guests, each with a performance fee of around $[-].If the tickets are sold out, the organizers can earn tens of thousands of dollars.If ticket sales fall short of expectations, that's a $[-]+ loss.

Few people would do such a thankless task.Only Live Nation and AEG Live, the two rich and powerful giants, will do this level of special performances on a large scale in order to look good and boost their stock prices in the secondary market.Otherwise, these middle-level artists can only wait for the offer from the music festival, and as a member of the platter, contribute to the box office for these activities composed of dozens or hundreds of artists of the same level.

We all know that the road to becoming a music superstar is as difficult as climbing the sky. In fact, it is often not in the initial stage, but in the climbing stage after the initial momentum.Most people's acting career can only be stuck in the range of 1 to [-] people for a lifetime, while a small number of artists can rely on extraordinary talent, excellent production or pure luck to become able to complete the world tour concert alone. , a phenomenon-level musician with tens of thousands of seats packed every night.

At this level, the asking price of an artist can reach hundreds of thousands or even millions of dollars. Moreover, the share with the organizer is usually 90. The artist gets 10% of the gross profit, and the organizer is recovering the cost. After that, only 95% can be taken, and in a more extreme example, even 5%: [-]% allocation plan.

The reason why the share ratio is so exaggerated is because these artists have already undergone trials and have successfully transformed. Their fan base, even if each of them only pays a dollar, can instantly create a multi-millionaire or even a billionaire.There is no chance of losing money for every performance that bears their names. Once tickets are issued on Ticketmaster, within a few days or even a few hours, you can only buy second-hand from scalpers.

Who has achieved this status?
Justin Bieber, Madonna, Adele, Beyoncé, Ariana Grande, Coldplay, Bruce Springsteen, Eminem, Kanye West, Taylor Swift, De lake...

And among the 24 groups of artists in Mad City, how many similar artists are there?

Except for Madison, Billy, and Lil Yachty, who Han Yi stuffed in as the opening guests, the posters, and the popularity of the newcomers, 70% of Mad City's lineup can be 1 to 30 people. [-]% of the stars in large stadiums are superstars who randomly fill stadiums with tens of thousands of people.

How can there be no reason why this kind of king bomb lineup can't sell tickets?
Han didn't have enough time to announce and release the site in the early stage, and this is why he dared to issue tickets online on a large scale.It’s enough to buy a symbolic draft, and do it ceremonially on the account. On the day of ticketing, as long as these 24 groups of guests post tweets, not to mention all sold out, half of the tickets can be digested in one day, which is more than enough.

In any industry, there is such a logic that one force will reduce ten meetings.No matter how sophisticated the business idea is, no matter how effective the operating model is, it cannot be worth two words - rich.

If you have money, you can make the top lineup.

If you have money, you can sell out the whole line without any pressure.

If you have money, you can not lose money.

If you have money, you can make more money.

Han Yi, a pragmatist, is very clear about where his greatest strength lies.In the field of live performance, which is very time-sensitive, where forward vision and future information are almost useless, his biggest advantage is that he can see the sore balance in his bank account.

Because of his clear judgment on the situation, Han Yi never worried about selling tickets from the very beginning.Whether it's for an hour, a day, a week or a month, Mad City tickets are always sold out.

He is more interested in exploring the possibility of the organizer directly intervening in the secondary ticket market through this show.

A successful music festival can earn eight figures at most.And if this experiment is successful, it will open up to Han Yi a huge market with potential commercial value that may reach ten or even eleven figures.

If the organizer can adopt dynamic ticket prices 100%, if the organizer can replace scalpers, if the organizer can integrate the power and channels of scalpers into ticket sales, publicity and even...even artist promotion.

A paper box office of 5000 million U.S. dollars for a music festival at Han Live can leverage a big cake that is four, five, or even ten times that amount.

Therefore, on the night of July 7th, Han Yi temporarily changed his strategy.Instead of waiting for the sales volume in the primary market to reach 5% of the total ticket volume, the 60 three-day passes and 15000 single-day pre-sale tickets left in the hands will be gradually released in the secondary market.

But...

After 60% of the ticket sources in the primary market are cleared, all ticket types will be removed from the shelves directly, and the sold out sign will be hung.

The remaining 40%, 43360 tickets, no matter how many tickets of each type are left, all flow into the secondary market and are sold at a premium through Stubhub, Seatgeek and Viagogo.

This is the real reason why Mad City sold out in 47 minutes.

Because 40% of the votes were taken back by Han Yi.

The early bird tickets with very favorable prices have indeed been sold out, and the 9000 tickets have created a total of 247.8 million US dollars in box office revenue for Han.The proportion is not much, but the early bird ticket is originally a marketing method for the organizer to stimulate consumers to buy in advance. Seeing that the early bird ticket is sold out quickly, most ticket buyers will not consider the marketing thinking behind it, but will only marvel Because of the popularity of this event, and joined the rush to buy the team.

Next, there are only 900 tickets. Although the price is expensive, the "rich exclusive" VVIP tickets with quite generous rights and benefits are the second type of tickets to be cleared.Most of the buyers are scalpers like Wiseguys Tickets.Because the rich seldom have the time, energy or interest to grab tickets, they are not sensitive to the premium on the ticket price. As long as the product is attractive enough to them, it can bring them sufficient emotional value and social value, even if the price of 3000 US dollars per ticket is higher. Doubled, there are countless people willing to pay the bill.

How many rich people in the United States who can afford $3000 a ticket to a music festival want to be photographed with Justin Bieber, Eminem and Kanye West?

The exact number is unknown, but it must be orders of magnitude higher than 900.

After all, the Denver Broncos played against the Carolina Panthers in the first Super Bowl held at Levi's Stadium in Santa Clara, California on February 2 this year. Neither team is considered a giant in the NFL. The amount is also small.

But even so, the average price of a ticket to the 2016 Super Bowl reached $4841.

That's a 72000-seat football stadium.

The higher the quality of the product provided, the more it can reflect a person's social status and wealth level, and the more high-income consumers are willing to pay a premium.

Therefore, the sales rate of the three-day VIP ticket and one-day VIP ticket has reached over 85%. The most sluggish sales are the pre-sale tickets with the largest number. By the time Ticketmaster and Eventbrite were launched, only 48.7 %.

The remaining ticket sources are the main products of Han Live in the secondary ticket market.

There are currently 580 second-hand tickets on sale on the three platforms of Stubhub, Seatgeek and Viagogo for the $1228 Mad City three-day advance ticket, with an average price of around $755.Even if calculated based on this premium, the remaining ticket sources in Han Yi's hands are enough to allow him to generate another income of more than 700 million US dollars.

It is equivalent to selling 12600 more tickets.

This is the charm of the secondary ticket market.

Even better, clearing the first-level tickets early and creating the gimmick of "all sold out in 47 minutes" is also beneficial to the popularity of the Han site and Mad City itself.

Not only the local newspapers in Nevada, but also the mainstream media on the west coast and even the east coast have paid attention to this rising new brand.

The reason why Peter Benedek knows the data so well is from reading Deadline's news report yesterday.

"Don't be too modest, Yi, even Deadline said, 'Mad City's rapid sell-out highlights the festival's unparalleled commercial potential'. Word for word, and I'm not exaggerating."

Peter Benedek took a sip of coffee with a smile, and brought the topic to the topic they wanted to introduce in the way he and Han Yi had rehearsed.

"The brand effect and cluster effect in the music field, I think... are also very important to UTA."

"If UTA wants to win the deathmatch with CAA, it needs to pay more attention to the expansion of weak areas."

"I very much agree with you, Peter. In fact, Karen and I, attending the meeting today, just want to launch such an initiative..."

Han Yi's eyes scanned the conference room slowly, and said in a deep voice.

"As a committed shareholder who strongly believes in UTA's growth potential, I would like to highlight an important area where we need to strengthen our efforts: our music client list."

"The entertainment landscape is vast and diverse. While UTA has always been proud of its all-star cast in film and television, we need to recognize... the growing importance and profitability of the modern music industry. We do excel in certain areas, But if we’re going to be honest with ourselves and our vision for UTA, we have to acknowledge that having a presence in film and television isn’t enough.”

"Comprehensive institutions like CAA and WME have always been our biggest competitors, and our shortcomings in ... many areas of weakness give them an advantage over us. If these shortcomings are not addressed, want to It will always be a fairy tale to be equal to them, let alone surpass them."

"Therefore, because I realized both the potential of UTA and the urgency of this issue, I chose to invest $1.9 million in our company. But this is not just a simple injection of capital. You should combine Han Capital with Park The investment behavior of Huihui Capital is seen as a call for a big action, a call for innovation, adaptation and expansion.”

"With these funds backed, I recommend that we strategically acquire a number of other music agencies - those with strong music clients and a proven track record in the industry. I believe these acquisitions will not only make our portfolio stronger diversification and will position UTA as a powerhouse in the music space."

"I'm invested in UTA, both financially and emotionally, to see UTA go to new heights. I believe that with our collective efforts and strategic decisions, we will redefine our legacy..."

"Ladies and gentlemen, I believe that our new tradition, as a premier music agency, will begin with..."

"The acquisition of Circle Talent Agency begins."

(End of this chapter)