The Los Angeles Country Club in Beverly Hills.
The date was Sunday, July 3.
Simon had just gotten out of his car in the parking lot when a young man who looked like an assistant, dressed in a white shirt, hurried over and said respectfully, "Mr. Westeros, Mr. Welch and the others are already waiting for you. Please follow ."
Following the young man into the largest and most prestigious golf course in Los Angeles, Simon soon spotted three other n chatting and laughing near the edge of the course. Noticing Simon's arrival, the three walked over together. One of them, a bald middle-aged man in his fifties, was none other than Jack Welch, the current Chairman and CEO of General Electric.
"Hello, Simon. I'm very glad to finally et you," Jack Welch said warmly as they approached, looking Simon over before shaking his hand in a familiar manner. He then introduced the other two. "This is Robert Wright, who currently oversees NBC's operations. And this is Larry Kupin, a major shareholder of New World Entertainnt. I'm sure you already know that."
Having unexpectedly received Jack Welch's invitation, Simon had done so preparation in advance and naturally recognized the other two.
Robert Wright had originally been the head of GE's financial services group and now served as Chairman and CEO of NBC. To be honest, Simon felt that this appointnt by Jack Welch could only be described as terrible, a classic case of an outsider leading insiders.
Of course, this was an internal matter for GE, and Simon had no intention of comnting on it.
Larry Kupin was a major shareholder of New World Entertainnt. Together with his partner Harry Sloan, he held more than 40 percent of the company's shares.
After exchanging greetings, the four of them entered the course together.
Everyone understood the purpose of the eting, so no one rushed straight to the point. They played golf while casually chatting about recent events. With it being an election year, the upcoming presidential race was naturally a very popular topic.
"The New York Tis article about Who Wants to Be a Millionaire was quite interesting," Jack Welch said inside the course as he took a new club from his caddie. Glancing at Simon, he asked seemingly offhandedly, "I really think it would be a good idea to let Bush and Dukakis appear on that show. Speaking of which, Simon, which one do you support, Bush or Dukakis?"
The two-party candidates had already been finalized in May: the sitting Vice President George Bush and Massachusetts Governor Michael Dukakis.
Noticing that Robert Wright and Larry Kupin were both more or less watching him, Simon simply shrugged and said, "As a Californian, I naturally support Dukakis."
Jack Welch swung and sank the ball into the hole, nodding in satisfaction. He then turned back to Simon and asked, "And if Bush wins?"
Simon watched Larry Kupin, who had been grouped with him, walk over carrying his club, stepped slightly aside, and replied, "In that case, if I have spare capital, I'll buy as many defense and oil stocks as possible."
The mont Simon said this, the expressions of Robert Wright and Larry Kupin clearly changed.
This young man had built a personal fortune of two billion dollars in just two years. Even though he spoke casually, both n imdiately took his words to heart and resolved to study them carefully afterward.
Jack Welch concealed the stir in his own heart. Watching Larry Kupin miss his shot, he pressed on, "Simon, what do you an by that?"
With a slightly regretful look at the ball Larry Kupin had just putted, Simon said, "It's simple. If Bush takes office, there will probably be war. War is the fastest factor driving up oil prices."
At this point, Robert Wright interjected, "Simon, if you said this publicly, it would definitely cause controversy."
"Which is why I obviously won't do that."
Jack Welch and the others all chuckled in agreent.
The four continued chatting like this as they leisurely played several holes. Jack Welch, who had been waiting for Simon to take the initiative, soon realized that the young man's patience was actually greater than that of the three middle-aged n. Left with no choice, he finally steered the conversation to the main topic.
"Simon, regarding New World Entertainnt, I still hope you'll reconsider the suggestion I made so ti ago."
Standing between the greens and watching Robert Wright and Larry Kupin take their shots, Simon glanced at Jack Welch and said, "Jack, at this point, aren't you planning to adjust your price?"
Based on Who Wants to Be a Millionaire alone, Daenerys Pictures was expected to earn over a hundred million dollars in profit. If Daenerys Pictures were a publicly listed company, even at a price-to-earnings ratio of ten, its valuation would exceed one billion dollars.
In his previous phone calls with Simon, Jack Welch had proposed taking a stake in Daenerys Pictures using New World Entertainnt shares as leverage, but the valuation he placed on Daenerys Pictures was only around two hundred million dollars.
"I have to say, your ability to make money is truly astonishing," Jack Welch said. "But Simon, I've heard that Daenerys Pictures hasn't been able to reach an agreent with ABC on profit distribution, and that you're still at a stalemate. The outlook for this project isn't exactly certain."
"The profit share I reserved for ABC already exceeds the total profits of all their television programs over the past several years."
"And yet," Jack Welch said, "what Daenerys Pictures is asking for seems to be even more. Simon, aren't you worried that ABC might actually abandon the project? As far as I know, under the contract, Daenerys Pictures can no longer transfer the project to another network."
Simon shook his head. "If ABC is willing to abandon the project simply because they feel that Daenerys Pictures is making too much and they can't accept it emotionally, then I can only let them continue feeling uncomfortable. Of course I'd feel regret, but giving up this show won't hurt Daenerys Pictures as much as you imagine. On the contrary, it's actually beneficial, because in the next round of bargaining, my competitors will understand that if I don't intend to make concessions, then I simply won't."
"But you really want New World Entertainnt, don't you?" Jack Welch said. "Simon, if you want sothing but refuse to pay a sufficient price, that won't work."
"If I don't make an offer, Jack, the most likely outco for New World Entertainnt is bankruptcy liquidation. In that case, creditors rank very low in the settlent order. Your 220 million dollar loan probably wouldn't even recover half. Right now, I can guarantee that GE gets all its money back. That's the price I'm paying."
"Simon, you seem very resistant to cooperating with others. That's not a good thing. Even GE frequently sets up joint ventures with other companies."
Watching Larry Kupin and Robert Wright finish a hole as they all walked off the green, Simon asked, "Jack, why do you cooperate with other companies?"
"So that both sides can fully leverage their resources and achieve a win-win outco."
"Exactly," Simon nodded. "So if I agree to let GE take a stake in Daenerys Pictures, what kind of help can you actually provide?"
"We own NBC, which can help distribute television programs produced by Daenerys Pictures. We also have strong capital reserves that can support Daenerys Pictures' rapid expansion."
Simon nodded again, but a smile appeared on his face. "Jack, the reality is that Daenerys Pictures' television programs aren't lacking buyers. On the contrary, if it weren't for the projects in my hands, we probably wouldn't even be standing here today. This is a seller's market. NBC as a platform isn't that attractive to . As for capital, while most Hollywood companies are perpetually short on funds, Daenerys Pictures is not. My personal assets alone are enough to support the expansion of my business, and Daenerys Pictures' profitability is strong enough that I can easily obtain any loans I want from major banks. GE's advantage in capital doesn't hold much appeal for either."
Jack Welch shook his head. "Simon, you're still young. Many things aren't as simple as you imagine."
"Only those lacking strength complicate simple matters to gain an advantage," Simon said, casually swinging his club through the air. "Daenerys Pictures doesn't need that right now, and I prefer things to be simple and direct. Jack, I don't mind cooperating with others, but the prerequisite is exactly what you just said: both sides must benefit. Not selling my fast-growing company at a low price just to exchange it for resources I don't need."
"In that case," Jack Welch said, "GE can only try to secure its own interests." He gestured to Larry Kupin. "We've already reached an agreent with Larry. GE will convert debt into equity to obtain 90 percent of New World Entertainnt's shares, and the relevant contracts will be signed next week. If Daenerys Pictures wants the shares in our hands, GE's asking price is 300 million dollars. In addition, NBC wants to acquire the two reality shows Daenerys Pictures is developing, Survivor and [?]."
"I won't hide the fact that I very much want New World Entertainnt," Simon stopped walking and said to Jack Welch. "But fundantally, this company isn't as attractive to as you think. What I really value is Marvel Entertainnt under its umbrella, because I want to own a comics company. As for New World Entertainnt's other assets, Jack, they are very helpful to Daenerys Pictures' developnt, but they're completely dispensable to GE. If you keep this company in your hands, the only outco will be for it to slowly rot away. So I won't accept that offer. Two hundred and fifty million dollars is my limit, for all of New World Entertainnt's shares, not just the 90 percent you hold."
Jack Welch obviously had no way of knowing Simon's determination to acquire Marvel. Simon's words perfectly matched his own assessnt of New World Entertainnt.
Although New World Entertainnt was not on the sa level as the Big Seven, it was still a fairly complete entertainnt company. Aside from its comics division, it included New World Pictures, New World Television, New World International, New World Ho Entertainnt, and several other production and distribution companies acquired in earlier rgers.
However, following last year's stock market crash and the ongoing Hollywood writers' strike, New World Entertainnt's operations had fallen into difficulty. Aside from Marvel Entertainnt, which remained relatively independent and had not been heavily affected, barely maintaining profitability, all of New World's other divisions were operating at a loss.
If Simon refused to take over, after converting debt to equity, GE would have no choice but to lay off staff and allocate as few resources as possible to barely keep these divisions alive.
The most direct consequence would be a rapid further devaluation of New World Entertainnt.
In fact, if Simon had not shown interest, GE's managent had previously leaned toward pushing New World Entertainnt into bankruptcy liquidation in order to recover as much of their losses as possible.
Jack Welch stopped along with Simon, rubbing the golf club in his hand as he thought for a mont before saying, "Simon, what about the two reality shows NBC wants?"
Simon's earlier point was correct. If not for the success of Who Wants to Be a Millionaire drawing GE's attention to the other three reality projects in Daenerys Pictures' hands, this eting likely would not have happened at all.
It was already July, and the fall television season was fast approaching.
Although NBC's situation over the past few years had been better than ABC's and CBS's, in an industry-wide bleak fall season following the strike, if the other networks acquired reality shows comparable to Who Wants to Be a Millionaire from Daenerys Pictures while NBC stood by doing nothing, the likely outco would be NBC's ratings slipping below the other two networks after the season ended.
As for Fox, it was still not yet able to compete on equal footing with the traditional Big Three.
Sensing the shift in Jack Welch's attitude, Simon smiled slightly and said, "Jack, if we reach an agreent on New World Entertainnt, you can have one reality show. I'd recomnd Survivor. However, in terms of profit distribution, just like with Who Wants to Be a Millionaire, I won't make any concessions."
"Do you think Survivor can reach the ratings level of Who Wants to Be a Millionaire?" Jack Welch asked.
"I can't guarantee it," Simon replied, "but among the remaining three reality shows, Survivor is the one I'm most optimistic about. You've already missed one opportunity. If you miss this one too, all I can say is that it's a pity."
Jack Welch held his club in silence for a mont, then looked toward Larry Kupin.
Knowing he had little real say here, Larry Kupin simply nodded slightly.
During this period, as operating conditions continued to deteriorate, New World Entertainnt's share price had fallen rapidly below six dollars, with a market value of less than 150 million dollars, and it was still declining.
Now that the opportunity had passed, Larry Kupin also realized that Simon Westeros would never again be willing to take over at the high price he had offered earlier in the year.
Once New World Entertainnt entered bankruptcy liquidation, shareholders like Larry Kupin would suffer the greatest losses, because the shares would beco completely worthless. Shareholders rank last in bankruptcy settlents, and with the company already insolvent, asset auctions would not yield them a single dollar.
Accepting Simon's offer now would at least allow them to recover so funds.
After receiving Larry Kupin's confirmation, Jack Welch extended his hand to Simon. "Then, Simon, we have a deal."
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