On that sa Sunday, Los Angeles.
Over breakfast, Michael Ovitz watched Jas Rebould's Today Show interview from start to finish, and he didn't believe a single word of Jas's vague, noncommittal answer.
Based on what he'd been hearing through back channels lately, Daenerys Entertainnt preparing to bid for MCA was already an undeniable fact.
He'd originally planned to spend the weekend with his family, but after The Hollywood Reporter suddenly exposed Daenerys Entertainnt's intentions yesterday, and then today's Today Show interview, Ovitz had no choice but to keep working through the weekend.
From the second half of last year until now, CAA's team had been grinding for an entire year on the MCA acquisition.
If the deal failed, it would not only an a full year of work down the drain, it would also an losing tens of millions of dollars in advisory fees. That was not sothing Ovitz was willing to accept.
Still, Ovitz understood the problem in front of him was extrely thorny.
When Matsushita first approached him last year, they'd said they were willing to offer as high as $90 per share for MCA. With MCA's total shares close to a hundred million, that ant a transaction size of $9 billion.
But as Japan's economy continued deteriorating over the past half year, Matsushita's attitude grew more and more conservative. On top o f that, the Kuwait War had dragged the entire U.S. market down, and by last Friday's close, MCA's share price had fallen to $36. Matsushita was even less likely to offer $90 a share now.
The problem was, they had to accelerate the deal and push Matsushita to raise its offer further.
Before eight in the morning, Michael Ovitz arrived at CAA's headquarters in Century City. The core mbers of the MCA acquisition team were already there, along with Matsushita's representative on this deal, Yoneyani Miko.
A strategy eting ran the entire morning. Around noon, Ovitz even spoke by phone with Matsushita president Akio Tanii at the company's Osaka headquarters.
After becoming Matsushita's president in 1986, Akio Tanii had always wanted to expand into the United States, but until last year he'd been held back by the conservative founder, Konosuke Matsushita.
What disappointed Ovitz, however, was that Akio Tanii didn't accept his recomndation to raise the bid to $75 per share and close quickly. Nor did he show any intention of abandoning the acquisition because of Daenerys Entertainnt's competition.
After a full morning of work, all they managed to confirm was this: another round of talks with MCA would take place next Wednesday, to further discuss deal details.
After lunch, Yoneyani Miko left. The core mbers of the acquisition team, Michael Ovitz, CAA CFO and cofounder Bob Goldman, and two other executives, Sandy Climan and Ray Kurtzman, returned to the morning's conference room.
Matsushita's lack of decisiveness weighed on everyone, leaving them visibly troubled.
They gathered around the table. After the secretary delivered coffee and left, Bob Goldman suddenly said, "A lot of people in Hollywood probably don't want to see Daenerys Entertainnt expand again."
Sandy Climan, who'd helped Ovitz build CAA's corporate representation business, said, "So what? Do you think Warner, Fox, MGM, Columbia, they're going to step out and oppose the acquisition?"
This sumr, two films from Daenerys Entertainnt's ten picture plan, Sleeping with the Enemy and The Hand That Rocks the Cradle, had both succeeded. Fox and Disney had already benefited, and Warner, MGM, and Columbia all maintained close cooperation with Daenerys Entertainnt as well.
Ray Kurtzman said, "Paramount hasn't worked with Daenerys Entertainnt. And with the failures of The Rocketeer and Fire Bird, Martin Davis is definitely unhappy with Westeros."
Sandy Climan replied, "Paramount alone isn't enough."
Bob Goldman said again, "You're missing sothing. The ones who can stop a studio from being acquired don't have to be industry rivals. I'm talking about Hollywood's three major unions."
The mont Bob Goldman said it, the other three all looked like a lightbulb went on.
Two years ago, Daenerys Entertainnt had already clashed with the Writers Guild because of that strike incident. Now Simon Westeros was suppressing star pay through long term contracts and strictly controlling production budgets. That helped studios, but it clearly hard the interests of the Writers Guild, the Directors Guild, and the actors' union.
And more than that, for two consecutive years, Daenerys Entertainnt had taken a large share of the top ten at the dostic box office. With that kind of market share, if they acquired MCA as well, the monopoly suspicion would be impossible to ignore.
If the three major unions joined forces to sue the Justice Departnt, and studios like Paramount cooperated, the chances of blocking Daenerys Entertainnt's acquisition would be very high.
"I just rembered that proposal from last Wednesday by Texas Republican Senator Peter Briger," Ray Kurtzman quickly added. Seeing the other three look confused, he said, "I'll have soone gather the materials for you. Bottom line, the White House probably doesn't like Westeros much right now. If that's the case, the Justice Departnt might not be eager to approve Daenerys Entertainnt's bid for MCA either."
"And there was that thing last year with Dustin and the others."
"Matthew Broderick, that young guy, rember him?"
"…"
"…"
They tossed ideas back and forth for another ten minutes. Michael Ovitz made a quick decision. "Bob, you're close with Martin Davis. Set up a eting with him as soon as possible. Sandy and Ray, you two handle contacts in Washington. I'll personally talk to the three major unions, and to Dustin and the others."
Once they settled it, the four split up and moved imdiately.
The weekend passed in a blink.
Monday, September 10.
After The Hollywood Reporter exposed Daenerys Entertainnt's interest in acquiring MCA last Saturday, The Wall Street Journal revealed another developnt on Monday. It stated as fact that Matsushita's acquisition team would enter formal negotiations with MCA this Wednesday.
The mont Ovitz saw the Journal's report, he called Lew Wasserman at ho, accusing him of leaking to the dia and threatening to cancel Wednesday's agenda. Wasserman flatly denied the accusation. After a heated exchange, Wednesday's eting remained on schedule.
But after consecutive dia reports, the news that Daenerys Entertainnt and Matsushita might both be bidding for MCA was completely out in the open.
When the North Arican market opened Monday morning, MCA's share price began to surge.
After a full day of trading, by the close, MCA had jumped from $36.75 at the open to $41.25, a 12% increase. By Wednesday's close, MCA had risen to $46.75, basically returning to its level before the Kuwait War erupted.
Because of the ti difference between coasts, by the ti Matsushita and MCA's top executives finished Wednesday's talks at Universal Studios in Burbank, the East Coast market was already closed.
And there were signs the situation was taking a sharp turn.
At a press conference after the eting, MCA president Sid Sheinberg bluntly stated that Matsushita's offer lacked sincerity. MCA's recent stock price had been severely undervalued due to force majeure factors, and if Matsushita refused to raise its bid, the deal could only stall.
At the sa ti, Sheinberg said MCA was an excellent company, and he looked forward to other corporations taking an interest in it.
The purpose of that last line couldn't have been more obvious.
The dia soon leaked more detailed negotiation terms.
MCA wanted $80 per share. Matsushita was only willing to offer $60. The gap was enormous, so the talks ended badly.
Because of that failure, MCA's upward montum clearly slowed the next day.
Even though everyone understood Matsushita wouldn't give up so easily, and MCA wouldn't easily chase away a bidder that could drive up its price, many people still turned their eyes toward Daenerys Entertainnt, waiting for Simon to make a move.
Having dodged the first week's dia frenzy after the Forbes list dropped, Simon was still in New York this week.
When news ca that Matsushita and MCA had hit a stalemate after their first public talks, Simon finally relaxed. He could wait patiently for the right mont. During this period, Janet personally arranged one dinner, cocktail reception, and party after another for him.
After amassing huge wealth so quickly, you couldn't do without a matching network. And it wasn't wise to hand your network entirely to your executives to manage on your behalf.
Every ti Simon went to lbourne, the Johnston family arranged similar events for him. Janet had fully inherited the family's eye and instincts for building connections. She seed able, almost by intuition, to help Simon avoid pointless social obligations, saving him from the blind flailing many newly rich people did as they tried to break into every circle at once.
To further muddy the waters for the dia and the public, Simon even made a high profile appearance at a party hosted by Steve Ross at his ho in East Hampton on Long Island.
Right after that, the dia began reporting that Daenerys Entertainnt might seek a rger with Ti Warner.
People in the industry knew Steve Ross was obsessed with power, and Simon would never give up control of Daenerys Entertainnt, so the odds of a rger were low. But the world was always full of people who didn't know the inside story.
After those reports, Ti Warner's share price began to rise.
Neither Daenerys Entertainnt nor Ti Warner clarified anything. Simon wanted to confuse the picture, and Steve Ross also wanted good news for Ti Warner. Even fake good news could ease the pressure on the man steering the company.
After a rocky path earlier this year, the Ti Warner rger finally went through. But because of internal power struggles, worsening external economic conditions, and sharply increased debt, the hoped for synergy never appeared. Ti Warner's stock kept sliding.
So far, this dia giant with nearly $25 billion in total assets had a market cap of only a little over $8 billion, while its debt exceeded $10 billion. Before the rger, when Paramount Communications tried to cut in and steal the deal, its offer for Ti alone had reached $10.7 billion.
In recent months, so dia outlets had begun comparing the Ti Warner rger to the Reynolds Nabisco deal from the previous year.
To be honest, Ti Warner's internal situation was so complex that even if Steve Ross were willing to sell, Simon wouldn't take it lightly.
After two chaotic weeks, Simon left New York again on September 17, flying to San Francisco on the West Coast.
A while ago, using support for Larry Ellison's control of Oracle as leverage, Simon had once again secured a seat on Oracle's board, and he had Carol Bartz from Ygritte take it. That wasn't random.
Database software had broad uses across websites. Putting Carol Bartz on Oracle's board could further strengthen cooperation between Oracle's databases and Ygritte's web technology.
On another front, Oracle's upcoming layoffs would mainly hit the software sales division. Coincidentally, Carol Bartz was building Ygritte's software sales network. This was a chance to recruit, locally, a batch of usable sales staff from Oracle.
Oracle had made major mistakes in its sales strategy over the past two years, but its rapid growth was undeniable, and a large part of that ca from the strength of Oracle's sales team.
Also, inspired by Simon's mo left at Ygritte describing the concept of "cloud computing," Carol Bartz wanted to turn Ygritte's software division into a one stop web technology support company, offering full solutions covering hardware and software for anyone who wanted to build a website, not rely selling software products.
Unlike the original tiline, Ygritte now held an almost complete monopoly on web related patents.
Even though Simon tried to maintain an open licensing posture, just imagining the explosive growth of web based sites over the coming years made him realize how enormous the profits would be if Carol Bartz's vision took shape.
And that was not sothing Ygritte could accomplish alone. It required combining the resources of every new tech company under Westeros.
Of course, it couldn't happen overnight.
Simon ca to San Francisco not only to hear Carol Bartz's business plan, but also to diate the conflict between Carol Bartz and Jeff Bezos again.
In the last $50 million injection into Ygritte, Simon allocated the largest share, $35 million, to the network division. Carol Bartz believed her software division was the most important at this stage and should have received more, so after Simon left last ti, she and Jeff Bezos argued their case, pushing to split the funds evenly.
Carol Bartz and Jeff Bezos both had very strong personalities. After only a few months, they'd even pushed Tim Berners Lee, the CEO, out toward more of a CTO role without realizing it.
Tim Berners Lee had the temperant of a pure engineer, like Apple's cofounder Steve Wozniak. Realizing he couldn't manage his two nominal subordinates, he simply stayed out of their fights and focused on the web technology R and D work under his responsibility.
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