hollywood billionaire

Chapter 65 Transaction Details
Using the proposal of the music festival as the prelude to this acquisition negotiation was originally a lobbying strategy formulated by Han Yi in advance.

As of April 2016, Mad Decent's "Lean On" is still the most played single in Spotify's history, bar none.In other words, from the perspective of the traditional record business, as an independent label not attached to any group, Mad Decent has done a good enough job.I want to impress them in this regard, saying that after acquiring the equity, I will increase investment to help the label create more phenomenal singles like "Lean On", I am afraid it will be difficult for the other party to pay the bill.

The reason is simple, Han Yi is a professional who knows the pop music industry inside and out, and so are Diplo, Kevin Kusatsu and Jasper Goggins of course.They all understand a truth, that is, in the music field, it is easy to create a hit song that can hit the charts, but there has never been a fixed formula for success in order to incubate a champion single at the level of "Lean On".

Even if Diplo's Major Lazer and DJ Snake create a new Moombahton based on the template of "Lean On" and invest ten times more promotional budget than "Lean On", there is a high probability that they will not be able to achieve the same results as the original song .

Music, especially pop music, has always been like that.In other words, the vast majority of entertainment products, including movies, TV series and even YouTube videos, are highly random.The aesthetic preference of the market in a certain period of time, the natural flow of publicity and distribution channels in a specific month, the subtle changes in current events and hot spots, and even the charts and sales performance of singles of the same type, countless subtle factors will affect The final commercial score of a song.

Therefore, Han Yi's strong capital may be able to help Mad Decent improve the signing conditions of artists, increase the music promotion budget of the marketing team, and comprehensively strengthen the label's influence in the original electronic music market, thereby increasing the emergence of phenomenal singles probability, but there is no way to guarantee that Diplo and his team will be able to quickly grab more income in the short term.

And this is exactly the transaction condition that Diplo and its partners are most concerned about - how to realize instant cash, so that they can freely use the cash at hand and do more things they want to do.

"It's all about them greens bro, it's all about them greens."

Han Yi is very aware of this. Therefore, the entry point he chose for this negotiation is a global tour and a large-scale music festival that can see benefits in a short period of time.Whether it's the former or the latter, the billing cycle is much shorter than the steady flow of music streaming revenue.

The condition that Han Yi threw out to Diplo through the mouth of Jordan Bromley was to add Block Party, a live event brand, to the asset package.

After the completion of the merger, Han Yi will use Han Music to contribute and bear 100% of the cost of overseas tours and the cost of the Las Vegas Music Festival. As the IP holder and management team, Mad Decent will retain 30% of the gross profit. Han Music It will be distributed to the other 70%.Any losses incurred during the performance will also be independently borne by Han Music.

For Diplo, Kevin and Jasper, they undoubtedly wished for such a sure-fire deal.Even if according to the acquisition agreement, 50% of the shares in the record company, live performances and artist peripherals are packaged and sold to Han Yi, Diplo can still get 15% of the income of the new tour without paying a penny.

Taking a step back, even if overseas tours and Las Vegas music festivals generate huge losses, they will not have any actual losses.

Of course, on Han Yi's side, he can actually get much more than his negotiating opponent. 70% of the income from performances goes to Han Music, and out of the 30% that Mad Decent gets, about half goes into his wallet.In other words, as long as there is positive cash flow from overseas tours and music festivals, Han Yi can get 85% of the gross profit.

As for Mad Decent's original tour in North America, Han Yi, as the new shareholder, can also get about 50%.

This is the capitalist's way of making money and the way of trading, rude and straightforward, using cash to clear the way, and speaking with strength.This kind of method sounds like a frown, but in reality, it is absolutely impossible to disgust anyone.

Just imagine, if there is a person who can throw tens of millions of dollars to buy half of your company's equity, and invest another tens of millions to help you make your business bigger, how many people will keep a clear head, stick to the so-called original intention, and choose to refuse Woolen cloth?
The difference between capitalists and ordinary people is reflected here.The former regards capital as a means to achieve goals, while the latter regards money as the ultimate pursuit of life.Everyone can talk loudly about ideals and enthusiasm, but how many people can choose between financial freedom and maintaining control of the company when mountains of green money are in front of them?

For Thomas Wesley Pentz, the main reason he became "Diplo" was not to make his music famous, or to promote Mad Decent as the fourth pole of the music world.Although these achievements are great and meaningful, they are too far away from him. Wanting to climb these two mountains is definitely not something he can accomplish, or want to accomplish.

As mentioned in the interview in the previous life, he has one and only one goal in making music, engaging in performances, and building a label, and that is to make himself as much money as possible when he is still young, so as to experience the music he wants to experience. All life to experience.

In fact, there is not such a big gap between the so-called ordinary rich and capital giants.The opportunities in front of everyone are not far apart, but it is the one or two choices at the critical moment—going forward or setting up camp, all in or cash out—that will create an insurmountable gap between people.

Dr. Dre's choice is to maintain absolute control over Aftermath Entertainment, concentrate on managing newcomers, and launch two rap superstars of different eras, Eminem and Kendrick Lamar.At the same time, he also boldly tried to cross-border, entered the electronic industry with Jimmy Iowen, and founded the Beats headphone brand. Finally, after more than ten years of hard work, he became the real top of the billion-dollar class and could get a share from Apple. boss.

As for Diplo, he doesn't have that much ambition and ambition.As a white man who was born in Mississippi and grew up in the Deep South, he is not like Andre, who has a sword hanging over his head that "black entrepreneurs will never be able to truly succeed" To break the secular confinement.

The cynical Thomas Wesley Penz wants to be a pirate captain in the new century who travels all over the world.

$3600 million is enough for him to do that.

This is under the leadership of Jordan Bromley, after three hours of data verification and lengthy negotiations, the two parties finally reached a consensus acquisition amount.With US$3600 million, Han Yi will buy the master tape copyright of all 820 singles from Mad Decent, the copyright of all event brands, and 55% of the copyright of artists and label peripherals.

This brought the total valuation of Mad Decent to 6545.45 million US dollars. You must know that the previous industry leader Spinnin' Records committed itself to Warner Music Group's transaction, which was only a little over 3829 million US dollars. Spinnin' Records has a total of 4.5 single master tape copyrights, which is more than 3600 times that of Mad Decent.Even if the asset package sold by Mad Decent this time also includes live performance brands and artist peripheral brands, $[-] million is still a very generous asking price.

It is worth noting that, unlike UTA’s financing method of capital increase and share expansion, this time, Han Yi directly acquired equity from Diplo and label co-founder Kevin Kusatsu.Kevin Kusatsu sold 8.25% of the shares, which left him with a minority stake of 6.75%.And Diplo will divide the remaining 85% from the 46.75% stake.Upon completion of the acquisition, the number of Mad Decent shareholders will increase to three.

Kevin Kusatsu, Diplo and Han Music.

When all the dust settles, Diplo and his managers will finally achieve the financial freedom they have dreamed of since their debut.

And Han Yi's original music kingdom will also expand its first territory.

Of course, in addition to this, there are many small details worth discussing in the negotiations. The Diplo side requested that Han Yi’s minimum investment amount for the Mad Decent live performance brand be clarified in the acquisition agreement. At least 500 overseas tours will be held, with a capital injection of 2000 million US dollars. The Las Vegas music festival needs to invest at least 5 million US dollars. , to meet the expenditures necessary for activities with a scale of [-] people.

Han Yi agreed to clarify the amount in the agreement, but he also proposed three counter offers - first, Diplo is not allowed to establish a new music label within five years, and his record contract must be Mad Decent has performed for at least ten years, and cannot take advantage of his position to terminate the contract early, otherwise Han Yi has the right to recover all investment funds and demand 120% compensation.After all, Diplo is the absolute core of Mad Decent, and Han Yi must ensure that he can continue to produce valuable content for the label for a long time, instead of giving birth to his heart when he gets cash.

In addition, Han Yi requested that Mad Decent need to ensure that its core artists, including Dillon Francis and Baauer, must complete all the obligations stipulated in the record agreement, that is, no matter whether they signed 1+3, 1+4 or 1 For +6 360-degree contracts, all contract renewal options need to be activated sequentially. Without the written confirmation of Han Music, artists are not allowed to give up in advance and terminate the contract with them.If the core artist is lost due to non-force majeure factors, Han Music can recover part of the funds at three times the average advance payment for each album.

This point is better understood. Whether it is a music copyright distribution company or a record company, the most important assets are artists, and they are also a solid reliance for Han Yi to push Han Music on the road to capitalization in the future.Regardless of whether singles and albums make money or not, at least the agreement and rights must be tightly held in the hands and cannot fall into the hands of others.

The last condition Han Yi put forward was that in the forthcoming investment announcement, Kevin Kusatsu must simultaneously announce that he would join Renyu Management and become a senior partner of TGO Management Company.Of course, Han Yi will not pay him any salary, and at the same time, Kevin does not need to share his income with the company.

What Han Yi wanted was just a public relations gimmick that Kevin Kusatsu led his client Diplo to join Renyu Management.Whether it is Diplo or Kevin Kusatsu's other musician clients, they will still maintain the essence of independent management, independent account building, and independent revenue.

The reason for doing this is because TGO urgently needs a top client to attract new artists that Han Yi and Zhao Youzhen are about to contact.With Diplo, the diamond record producer who is in the limelight, as a golden sign, Yuzhen's next contact will be easier.

In the entertainment circle, the most important thing is two A's, appearance and attractiveness.

Glossy packaging, and the appeal that comes with it.

With these two things, TGO can be regarded as having truly stabilized its position in the field of artist management.

After some discussion, Diplo and Kevin accepted all the conditions proposed by Han Yi, and then put forward a proposal for team incentives after the completion of the acquisition, and this is the final agreement reached by the negotiating parties today. Diplo and Kevin’s suggestion is that after the equity transaction is completed, Han Music, as the absolute controlling party, should distribute an incentive dividend to Mad Decent’s 32 employees, including CEO Jasper Goggins. to boost morale.Let employees see the sincerity of their new employer, and also allow them to stay in Mad Decent more stably and shine.

Han Yi has no objection to the distribution of incentive dividends. After the completion of most acquisitions, the company will leave a bonus for the core team.In fact, the first company Han Yi acquired, the United Artists Agency, did exactly that.As long as the established revenue target can be achieved in this fiscal year, each person can be allocated a total of 2375 million US dollars in incentive dividends based on performance.

It is impossible for the team to think that they deserve a piece of the cake just because the boss has sold the shares.It would be foolish for any employer, or acquirer, to actually pay bonuses immediately after the acquisition closes.This way of rewarding for nothing will only destroy the original incentive mechanism within the company and breed the bad habit of employees who are greedy.

Once the fighters who serve you get used to receiving rewards before going to the battlefield, instead of rewarding them after a big victory, then this army will not be too far away from being disintegrated and completely defeated.

Therefore, Han Yi conditionally agreed with the proposal of the acquisition target—after the acquisition is completed, Mad Decent will have a bonus pool of US$200 million.As long as the label can exceed the minimum annual income set by Han Yi, Jasper Goggins, as the CEO, will first get 40%, and the other 60% will be paid by the top 50% of employees who perform best. distribute.

If you can become the top 50%, congratulations, you will have the opportunity to get a high bonus equivalent to your annual salary.

If you are the bottom 50%... Unfortunately, in Han Yi's company, there is not much need for people who can only be the bottom 50%.

When the hour hand was about to point to [-]:[-] p.m., Jordan Bromley's legal assistant finally drafted the memorandum of cooperation, and both parties signed the memorandum after reviewing it. For future press releases.The next specific process will have to wait until Jordan sorts out the final investment agreement text, and Han Yi also obtains all the funds required for the acquisition from Carlyle Group before proceeding.

A welcome party added many unexpected arrangements to Han Yi's life that he was already in control of, and he gradually began to empathize with the busy schedules of those business tycoons.In his previous life, Han Yi still scoffed when he read the interviews of these rich people saying that he was not enough for 24 hours a day.After all, in his opinion at the time, most of the work was assigned to the employees below. What billionaires need to do is to cut ribbons, hold meetings, drink tea, and chat. What is worth them? Where are you complaining?
But when Han Yi became the person who went around looking for people to chat with, his original concepts and opinions collapsed almost instantly.At [-]:[-], he shook hands with Diplo and his group as farewell. He didn't even have time to take a breath, so he got into Feamu's Chevrolet, followed Jordan Bromley's black Bentley Continental, and rushed to the next negotiation Place.

Drive on Santa Monica Boulevard, head west all the way, slowly creeping in the endless Los Angeles traffic, their destination is a seaside vacation that Han Yi was no stranger to in his previous life, but he has never visited in this life Resort.

Mélisse Restaurant, 1104 Wilshire Blvd., Santa Monica.

There, Kevin Hart and his Hartbeat team are looking forward to it.

3.99% of the $18 million that has not been received has been promised.

Han Yi wanted to see how many papers he could write in one day, it was definitely not a huge empty check.

(End of this chapter)