Across America, Starting with the Boxing Champion

Chapter 468 The prototype of a business empire

After training ended in the afternoon, Link drove back to the Bay Villa.

Last time he and Ivaca discussed buying another large manor-style villa.

At present, the villa has been decided. It is located in the mid-level area of ​​Santa Monica, close to the mountains and the sea. The environment and public security are very good.

The villa was built in the early 1970s. It was originally one of the properties owned by the Paul Getty family, the world's richest man, in the 1960s. It is not far from the Getty Art Center and is also a famous mansion in Los Angeles.

 The total area is about 1.6 hectares, the living area is more than 6,800 square feet, and the price is US$48 million.

 The villa is currently being renovated and is expected to be ready for moving into a new home next year.

 When she got home, Ivaca was sitting on the sofa reading documents. She needed to rest because of her pregnancy. She usually didn’t stay at the company for too long, and she took a lot of work home to do.

“Read less of the documents! Leave the work to Steven Bix and the others. Otherwise, you can come to me. You need more rest during pregnancy.”

Link put down his training backpack and leaned over from behind the sofa to kiss her cheek.

"I just read the company's weekly report and didn't do anything laborious. It's because you are too worried."

Evaka said.

 “What work does the company have this week?”

Link sat down next to him, picked up a green apple and took a bite.

"A lot. "The Hunger Games" has been filmed and is in post-production, and is expected to be released in the summer. "Doomed" has a box office of 380,000 US dollars in North America this week, with a total of 27.23 million US dollars, and an overseas box office of about 1.42 million US dollars, with a total of about 48 million. This The movie made almost 20 million in profit.

 And the casting for "The Vow" has begun. The production department thinks that you are also suitable for the male lead and asked you if you are interested? "

Ivaca put down the folder and asked.

“No, my salary is relatively high, so if you ask me to act, it will increase the cost. Also, I am a famous playboy. If you ask me to play a very affectionate role, the audience will be entertained.”

Link sat on the sofa with his legs crossed.

Ivaca smiled slightly and did not persuade him to take this role.

Judging from Link's current identity and influence, this type of role does not add much to his fame, and it is a waste of time to play. But for Link, every second is valuable.

"One more thing. After we gave up the acquisition of Summit Entertainment, Ryan Kavanaugh was preparing to acquire Summit Entertainment. It is said that they are currently raising funds. The media's evaluation of this matter is that if the merger of Relativity Pictures and Summit Entertainment is successful, the market value It will have the opportunity to surpass Lionsgate and become the eighth largest in Hollywood. In the future, the independent film industry will be tied with Lionsgate, Relativity Summit and Weinstein Films.”

Evaka said.

 In Hollywood, the six major studios are Disney, Warner, Universal, Paramount, Fox, and Sony. Counting Sony's Columbia Pictures, these are the seven major studios.

 Lionsgate Pictures once had a market value of more than 1 billion after its listing, and was also known as the eighth largest company in Hollywood.

Now that Lionsgate Pictures has delisted, its market value has shrunk, its influence in the film industry has declined, and its eighth position is also in jeopardy.

If Relativity, worth 200-300 million yuan, merges with Summit Entertainment, worth more than 400 million yuan, its market value will indeed be no worse than Lionsgate, and its production capabilities will also be enhanced. It will indeed bring Lionsgate Pictures’ status in the field of independent production. There were a lot of threats.

 But Link is not worried. For a film company, no matter how big or small, the most important thing is to be able to produce blockbuster movies every year and make money through movies.

ˆ With more profits, you can have the funds to make more and better movies and continue to make big money. This is an industry chain. When movies cannot make money, no matter how big the company is, it will be at a disadvantage in market competition.

Several movies invested by Lionsgate this year are all good. As long as nothing unexpected happens, the company's profits will not be less next year.

Relativity Pictures, on the other hand, is a younger film company than Lionsgate, with a market value of 200 million to 300 million yuan. It produces about ten films a year, which is less than half of Lionsgate.

Although it has done well in recent years, the company's foundation is poor and it does not have the support of Lionsgate's strong film library. Every year it makes movies, it relies on Kavanaugh's bragging to attract investment, which has led to more and more creditors of Relativity Pictures.

It is said that there are currently four to five hundred creditors of Relativity Pictures. There are too many creditors, and the promised dividends cannot be paid in time. This is also one of the reasons for the thunder of Relativity Pictures.

  If Relativity wants to acquire Summit Entertainment, which is larger than itself, it will need to raise more funds and attract more creditors, which will be a huge debt for Relativity Pictures.

This situation is similar to a debt-ridden poor borrowing money to marry his wife.

Let’s not talk about whether the shareholders behind Summit Entertainment will agree. Even if they agree, the cooperation between the two parties will not be so smooth.

 It will take at least two to three years, or more, for the two companies to get through the running-in period and enter a period of stable development.

At that time, Lionsgate Pictures had probably already entered a period of rapid development, and there was no need to worry about the two companies joining forces.

  In fact, Lionsgate’s goals and opponents from beginning to end have been the six major film companies. In the field of independent production, including Weinstein Pictures, Summit Entertainment, Legendary Pictures, etc., they are not opponents that need to be worried for the time being.

"Don't worry about Summit Entertainment and Relativity. In the next five years, Lionsgate's focus will be on developing its existing film projects, making more money, and accumulating abundant capital. As long as there is enough money, our acquisition targets Not only a small film company like Summit Entertainment can reverse-purchase the Big Six and become a leader in the film industry."

Link said while chewing on the apple.

Ivaca raised the corners of her lips and looked at him with a look of doting and admiration, "Is our goal so big?"

“Only when we have higher goals can we have the motivation to move forward and not be easily complacent. We must learn from Mr. Thompson on this. He is indeed a good role model.”

Link said.

Ivaca smiled slightly, leaned over and kissed him.

Hold the document and continue reading the company's weekly report to him.

 Including the latest progress of various film projects under the production department, the progress of several films, the filming status of TV series, the distribution department's report on the box office situation of released films, box office data decline and analysis.

There is also the International Department’s report and analysis on overseas box office, as well as the work reports of the Finance Department, Development Planning Department, Content Development Department and other departments.

“Wait a minute! In the previous article, the Ministry of Development and Planning proposed to acquire shares in Netflix? Is it the Netflix where Scott Stuber works next door?”

Link asked in confusion.

"Yes, this is the new plan submitted by Vice President Michael Burns. In July, Netflix began to charge users of the video website. Each member needs to pay a monthly subscription fee of US$10. This move directly resulted in more than 1.2 million Fixed users are abandoning Netflix and moving to other free movie and video websites.

 Netflix shares also fell from a high of 54 yuan in July to 8 US dollars, and the market value also dropped from a high of 16.3 billion US dollars at the beginning of the year to about 3.2 billion US dollars.

Vice President Burns believes that charging for video content is the development trend of video websites in the future. Netflix is ​​currently taking the first step. Although it will be abandoned by a large number of customers in a short period of time, in the long run, this step is the right one.

In addition, Netflix Technology Company has a large number of film and television resources, which are richer in content than other video websites. This is Netflix’s advantage. For users who like to watch movies, they will not leave easily even if Netflix charges. Users who left before will continue to work elsewhere in the future. After the video website charges, it will return to Netflix.

Vice President Burns believes that the current stock price of Netflix is ​​far lower than the asset value, which is a good time for acquisition. If Lionsgate Pictures can acquire Netflix or part of its shares, it will be beneficial to the development of Lionsgate Pictures and can make up for it. Lionsgate’s shortcomings in distribution capabilities.

 It’s just that Burns’ plan was bold and risky, and the company’s current situation did not support it, so this plan was not passed at the working meeting. "

Evaka said.

Link was a little surprised after hearing this. He didn't expect that the company would have a visionary senior executive like Burns.

 Burns is right to say that charging for video websites is a trend. If video websites want to be profitable, they cannot be free forever.

In a few years, free video websites will almost disappear, and paid websites will start to harvest leeks like crazy. Once you become a VIP user, you can watch all the videos on the website. Later, you need to become a super VIP or super super VIP to watch.

It is also because of this situation that free video content such as short videos, Douyin Kuaishou, live broadcasts, short plays, etc. will become popular in the future.

If netizens can watch movies and TV series with higher quality content online for free, there will undoubtedly be many fewer people choosing to watch free content such as short videos.

 Now in 2011, Netflix took the first step. After Netflix’s success, other video websites will surely follow suit.

Link has also paid attention to Netflix, a technology company, in the past. When he invested in Twitter in 2009, he bought many technology stocks through Ms. Cathie Wood, including Netflix.

At that time, Netflix’s market value was more than 10 billion. He wanted to buy more but didn’t have that much money. He only bought less than 100,000 shares, worth more than 10 million.

 Later, he did not completely give up his plan to invest in Netflix.

He remembered that Netflix had a market value of more than 300 billion U.S. dollars at its peak and was the leader in the film and television website industry. It was a good opportunity to make a move when the market value was between 20 and 30 billion U.S. dollars.

But I didn’t expect that Netflix would encounter such a big ups and downs this year, with its market value falling to more than 3 billion.

He discussed it with Ivaca, and then called Michael Burns to express his interest in acquiring Netflix. Now he needed to see the plan, and also asked someone to send him information related to the acquisition of Netflix. .

 Michael Burns is an impatient person, so he personally drove over to explain to him the benefits of acquiring Netflix, the acquisition steps, and the return on investment.

 After listening to his explanation, Link agreed to his acquisition plan.

  I just don’t agree with the 5% share proposed by Burns, it’s too little.

He proposed to acquire at least 10% of the shares so that Lionsgate would have more say on Netflix's board of directors, making it easier for the two companies to cooperate in the future.

“Boss, based on Netflix’s current stock price, the purchase price for 10% of the shares is more than 350 million. The company does not have that much money.”

Michael Burns scratched his scalp and said.

 Michael Burns is 45 years old. He graduated from Harvard University with a major in political science. After graduation, he worked as a civil servant in the city hall of Little Rock, Utah for several years. Later, he found it boring and resigned and found a new career.

Joined the newly established Lionsgate Films in 1999, worked for more than ten years from the middle to the top, and became the vice president of Lionsgate. He is responsible for the company's development planning and business strategy. He is also a veteran of Lionsgate.

His work ability is pretty good and he participated in the listing of Lionsgate Pictures. He also participated in the acquisition of Triangle Entertainment, Artisan Entertainment, Trimark Company, Debmar-Mercury Company, TVGuide Network, and the acquisition of MGM Pictures' distribution in 2009. The company is an acquisition maniac.

After Link joined Lionsgate Pictures, he also proposed several acquisition plans one after another, but because of the company's current poor financial condition, none of them were approved. Link has heard of him before, but he is relatively ordinary-looking and does not attract much attention among the senior executives. He has not paid much attention to him. This is the first time he chats with him alone today.

“Mike, you don’t need to worry about funding. What you need to do is to use the least amount of money to get as many Netflix shares as possible. Like you, I am also very optimistic about the value of Netflix.”

Link said.

 Michael Burns thought for a moment and came up with a proposal to borrow less but get more shares of Netflix.

 Lionsgate Films itself has a video website, CinemaNow, which is a streaming video website that was originally owned by Trimark Distribution Company.

After Lionsgate spent $60 million to acquire Trimark Distribution Company in 2006, this website became one of Lionsgate's assets. It has the rights to broadcast many of Lionsgate's film and television resources and has more than 1.2 million registered members. Most of them I am a horror movie enthusiast.

 The current market value is US$180 million, which can help the company create tens of millions of US dollars in revenue every year.

 Netflix also made an acquisition offer to Lionsgate, but the two parties did not reach an agreement on the price.

 Burns proposed to use CinemaNow website resources to replace part of Netflix shares. Although CinemaNow also makes profits every year, it is not very competitive in the video website industry.

 Now it is a good deal to exchange this website for the opportunity to join Netflix's board of directors.

Link thought for a while and thought it was not bad. In the future, after charging fees, video websites will also enter the stage of merging with each other. Competition will be fierce, and the big fish will eat the small fish.

 With the size of CinemaNow, it may be difficult to survive in the fierce competition, and Lionsgate is a video content company, not a video website.

●While it is still relatively valuable at this stage, it is indeed worth considering to exchange for shares of Netflix, the industry leader.

Link agrees with Burns' proposal and asks him to come up with a plan. He will hold a working meeting next week and he and Ivaca will promote the adoption of the plan.

 “Okay boss!”

Michael Burns didn’t say much nonsense, just got up and left.

When Link sent the other party out of the villa, he happened to see Scott Stuber and his wife next door walking their dogs on the road in front of the house. The two of them were leading a large group of dogs, which was very lively.

Link said hello and asked Stuber about Netflix.

Stuber is the head of Netflix’s movie department and a small shareholder, owning approximately 2.3% of Netflix shares.

 Hearing him ask about Netflix, Stuber said solemnly that he was not optimistic.

After Netflix announced its charges, it was blocked by several big short sellers in the stock market, causing the stock price to plummet. However, Stuber believes that Netflix's current difficulties are only temporary. As long as people like to watch movies, Netflix will not go bankrupt.

 He also asked him not to listen to the rumors in the newspapers that Netflix was about to go bankrupt. Those were false news released by short sellers, tricking investors into dumping Netflix shares and suppressing Netflix's stock price.

Link nodded in agreement, proposed a plan to invest in Netflix, and asked for his opinion.

 “What? You want to invest in Netflix? Are you planning to buy more shares?”

 Hearing his words, Scott Stuber's expression suddenly changed.

 “Yes, any questions?”

Link was confused and said that now that Netflix’s stock price has plummeted, as a billionaire, he is willing to take a stake, which can be regarded as helping Netflix, but Stuber doesn’t seem to think so.

“Link, why would you want to invest in Netflix? If you think about it again, this might not be a good idea.”

Stuber said with a frown.

 I don’t blame him for being worried, it’s just because Link’s current reputation in the investment circle is very bad, and it’s getting worse.

The reason is that in March and April, he exchanged 16.5% of Twitter shares for 5.3% of Nvidia and part of Lionsgate Pictures shares.

 Twitter’s market value now exceeds 10 billion U.S. dollars, and 16% of Twitter’s shares are worth more than 1.6 billion.

After Link took the stake, Nvidia's stock price suffered a series of heavy losses, from the original 14.8 billion to around 8.5 billion. 5.3% of Nvidia's shares were worth less than 500 million. Lionsgate Pictures' market value plummeted after delisting. , that part of the shares shrank even more, with a value of only three to four billion.

The Wall Street Journal estimates that if Link had not sold his Twitter shares in March and April, his current worth would have been more than $4 billion.

Just because he made a wrong decision, he lost nearly one billion. As Twitter's stock continues to rise, Link's losses on this investment will be even greater, perhaps as high as billions or tens of billions.

It is also because of this that Link changed from the investment genius last year to "Link without vision" and "Link who only knows how to box."

It is rumored that the companies and stocks that Link is optimistic about will go from bad to worse like Nvidia. Tesla is currently doing well, but it will not last long.

Now that Link suddenly said that he wanted to invest in Netflix, Stuber was a little panicked. Netflix was already in a bad situation, with its market value shrinking by 70%, and if Link was optimistic about it, it would really make things worse.

 But he couldn't refuse.

The current situation of Netflix is ​​not good, shareholders and stock investors are selling out one after another. There are a large number of Netflix stocks in the stock market that are in urgent need of trading.

 Link is a capital investor, and they simply cannot refuse to invest in the company. In addition, Link also proposed to replace it with the CinemaNow video website. This plan will be of great benefit to increasing Netflix’s stock price, and the board of directors will not refuse.

“Haha, Link, although I don’t quite agree with your investment vision, I think you made a very correct decision when it comes to investing in Netflix. On behalf of Netflix, I welcome you to invest in the company.”

Stuber smiled strongly.

 It’s not welcome if you don’t want to. According to Link’s plan, there is a great chance of becoming Netflix’s major shareholder after investing in Netflix.

If he wants to continue as the head of the film department, he still needs Link's support.

 From this aspect, Link’s investment in Netflix is ​​also good.

"Thanks!"

Link didn’t understand the reason for the other person’s change of expression, and didn’t delve into it. He chatted for a few words, and was about to go home and talk to Ivaca. But as soon as he raised his feet, he felt like he had stepped on dog **** under his feet.

 Woof woof woof!

There was a cheerful barking of dogs in the distance.

  —

After confirming the investment in Netflix, Lionsgate Pictures immediately negotiated with Netflix, led by Ivaca, and Michael Burns led the team to personally implement it. After several rounds of negotiations, the two parties finally reached an agreement.

 Lionsgate Films invested CinemaNow and US$160 million in shares, acquiring 11.37% of Netflix's shares, becoming the third largest shareholder on Netflix's board of directors, second only to Pioneer Investment Management Group with 18.58% and BlackRock with approximately 16.84%.

In order to further enhance Lionsgate Pictures’ voice in Netflix, he successively bought approximately 5.14% of Netflix shares through Golden Shell Investment.

Two consecutive transactions also caused Lionsgate Pictures’ debt to increase to US$340 million, and Link’s personal debt increased from US$170 million to US$320 million.

Since Netflix and Lionsgate are both large companies, the news of their cooperation has also become a hot news in Hollywood and investment circles in October.

 After the relevant news was reported, Wall Street expressed disapproval of the cooperation between the two parties.

I believe that shortly after Link took over Lionsgate, he then took a stake in Netflix Technology, which had serious debt problems. This was undoubtedly a very bold move. If Netflix's stock price continues to fall, Lionsgate will face the risk of bankruptcy, and Link will also pass. A career of boxing to pay off debts.

 The "Los Angeles Times" advised Link to focus on boxing and music career, "Don't dance at the dance that you are not good at, as it is easy to fall."

 Link was unfazed by this.

 Netflix Technology Company is the leader in the streaming media service industry. Its market value exceeded US$100 billion in 2018 and became the number one in the industry. In 2020, due to the XG issue, its market value exceeded US$300 billion, surpassing Disney to become the world's highest market value film and television entertainment company.

 After becoming Netflix’s major shareholder, he can influence or even control the company through the board of directors, and bring the two companies together for further cooperation.

  Netflix is ​​the world’s largest online video rental service provider, with tens of millions of members around the world. Its weakness is its insufficient production capacity for film and television content. It needs to pay large copyright fees to other film and television production companies every year, resulting in reduced profits.

 Lionsgate is the eighth largest film and television content producer in Hollywood. The cooperation between the two parties is a strong alliance. This cooperation can also further increase Lionsgate’s voice in the film and television industry and Link’s power in Hollywood.

Just when talking about the issue of debt repayment, Ivaca reminded him not to forget that Link Music still has tens of millions in loans.

At the beginning of the year, Link Music spent US$150 million to acquire 16.8% of the shares of Spotify music streaming company, becoming the company's second largest corporate shareholder.

At that time, the loan was 100 million U.S. dollars. After two repayments, about 30 million U.S. dollars of debt remained.

Link didn’t care after hearing this. Adding in the debt of 30 million US dollars, he and his companies’ debts were less than 700 million US dollars.

Currently, Golden Shell Investment owns 6.2% of Nvidia, 16.8% of Tesla, 5.14% of Netflix shares, and a small amount of shares of Amazon and other companies. Lionsgate Pictures owns 11.3% of Netflix shares, and Link Music Company owns 16.8% of Spotify. shares, worth more than three billion.

 In the next five years, it will be at least tenfold, and in the next ten years it will be at least one hundred times, worth 400 to 500 billion.

 It is worthwhile to hold on to 700 million in debt to resist the pressure now.

However, he also understood what Eva meant. He invested too much this year and frequently borrowed debt to buy stocks. Eva was worried that there would be risks in developing too fast.

Link also felt that after experiencing the benefits of loans, he became addicted to borrowing money.

 In order not to worry Eva, he also said that he would not risk making other investments until the 700 million foreign debt was repaid.

Seeing that he listened to the advice, Evaka felt relieved and let him rest on her lap to massage his head.

 (End of this chapter)