Perhaps because they sensed that Westeros Corporation was no longer staying in close contact with Reynolds Nabisco, the Hearsts dragged it out until October 3 before giving Simon an answer to his conditions.
William Randolph Hearst III had no intention of sharing the San Francisco Chronicle's news resources. Instead, he said that Hearst Group's West Coast paper, the Los Angeles Herald, could enter into comprehensive content cooperation with Ygritte.
The Los Angeles Herald sounded like a serious newspaper, but in reality it was much like News Corporation's New York Post, focusing mainly on local incidents and celebrity gossip.
Ygritte positioning in news was as a comprehensive information platform. At this stage its primary audience was the affluent, educated middle and upper middle class, so it pursued professionalism and seriousness in its content.
Though it also carried entertainnt news, Simon had no intention of turning Ygritte into a gossip portal.
More importantly, Hearst III's offer of the Los Angeles Herald was ant to keep that paper alive. Hearst Group had originally planned to shut it down after years of poor performance. Now, if the paper could secure financial support through cooperation with Ygritte, it could continue to exist.
In other words, Hearst III was showing zero sincerity.
Simon then took another step back. Through Rebould, he inford Hearst III that Ygritte only needed access to the San Francisco Chronicle's dostic news section. Egret did not need international news, local news, entertainnt, sports, and so on.
It was still refused.
On another front, after more than a month of negotiations, Arica Online finally reached that exclusive agreent with three regional telecom operators: Bell Atlantic, Bell Pacific, and NYNEX.
The talks had been grueling, at one point deadlocking over the buyout price of $1.50 per user.
The three operators banded together and insisted that Arica Online must pay an exclusive fee of $1.50 per user across their networks, fifty percent higher than the $1.00 figure Arica Online's team had anticipated.
Just when the three operators thought they had Arica Online, and the Westeros Corporation behind it, completely in their grip, Steve Case unexpectedly broke the stalemate with a divide-and-conquer tactic. He declared that if they insisted on $1.50, Arica Online could not afford it and would have to choose only two of the three companies.
All they needed to do was open their lines. Given Arica Online's current scale, it would cost them almost nothing. In return, they would receive tens of millions of dollars. And a few years down the road, as Arica Online grew, the pricing could be renegotiated. In truth, the three operators were not as indifferent to this business as they pretended.
After the 1984 breakup, the Bell system was never going to act as one again. Once they confird Steve Case was not bluffing, the three ultimately made concessions.
So the final price was set at $1.30.
Bell Pacific, Bell Atlantic, and NYNEX, counting both residential and comrcial users, had a combined subscriber base of 23.61 million. The initial total exclusive fee amounted to $30.69 million per year.
In addition, the exclusive agreent term was ten years, only half of the originally expected contract length. The two sides would renegotiate the exclusive fee every two years, and each adjustnt could not exceed a fifty percent increase.
After signing, Arica Online would be able to use the three operators' existing line networks to launch its own internet access service. However, beyond their existing infrastructure, the operators would not provide extra equipnt or technical support. If Arica Online needed those, it would have to pay separately.
On paper, the terms heavily favored the three operators. But as far as Simon was concerned, being able to sign the exclusive agreent at all was already a victory.
Arica Online's user count had been growing rapidly over the past few months, yet the three operators clearly still had not realized the internet industry's massive potential.
To soone like Simon, who knew what ca next, that was almost unimaginable. But just like how Hewlett-Packard failed to recognize the importance of a personal computer invented by one of its employees nad Steve Wozniak, the printer giant Xerox made the sa mistake. They developed the first graphical user interface operating system, received nothing more than a "very convenient" comnt from the company president, and then watched others copy it and build two companies on top of it, one called Apple, the other Microsoft.
In the end, aside from Simon, no one in this world could see the future with such clarity.
Based on the three operators' current subscriber numbers, even if the renegotiated increases hit the fifty percent ceiling five tis in a row, Arica Online's final annual exclusive fee would still be under $200 million. But if it fully absorbed those twenty-plus million users, Arica Online could earn several billion dollars a year from internet access service alone.
And within ten years, as long as U.S. telecom regulation loosened the way it had in the original tiline, Simon was confident he could make the vine that was Arica Online turn the tables and swallow the big trees it currently clung to.
Over the past few days, Simon had been discussing acquisition plans with his team for both companies.
Since there was no need to rush, he and Janet were still living at the Greenwich estate each day.
In the blink of an eye, it was Friday, October 5.
Simon had just arrived at Westeros Corporation headquarters in Manhattan that morning when Jas Rebould followed him into his office with a photocopied newspaper page. "Simon, take a look at this."
Simon sat behind his desk, took the photocopy, and frowned the mont he saw the headline.
It was an article titled "Beware the Erging Internet Telecom Sector Sliding into a Monopoly Structure," and its target was precisely the exclusive agreent Arica Online had just signed with the three major operators.
As for the content, the title already made it obvious.
But that was not the most important part. The key was that this article had been published by the San Francisco Chronicle.
After skimming it, Simon shook his head. "The Hearsts don't want to pay any price at all."
Arica Online was still a company with fewer than half a million users. Forget AT and T, even any one of the Baby Bells was a giant compared to Arica Online at this mont.
And exclusivity agreents like this were not sothing Arica Online had invented. Plenty of companies offering telecom-adjacent services signed exclusivity deals with these giants to preserve their market advantage. Internet access, for now, was still considered an adjacent telecom service.
Yet the San Francisco Chronicle directly slapped Arica Online with the label of suspected monopoly.
The impact of the old AT and T breakup had not fully faded, and telecom monopoly was still a sensitive topic. Most companies wanted nothing to do with that kind of bad luck.
So the Hearst family's intent was obvious.
Perhaps they sensed Simon's retreat on the ESPN stake, and after rejecting content sharing with the San Francisco Chronicle, Hearst III had lost patience. Instead of dragging it out any longer, he made the warning explicit, demanding Simon withdraw.
Jas forced a bitter smile. "What do we do now?"
Simon tossed the photocopy onto the desk in front of him. "Call Reynolds Nabisco. We're out."
Jas looked surprised. "Call right now?"
Simon nodded, his tone flat. "Call. No need to drag it out. If the Hearst family has no interest in cooperating with us at all, then forget it."
Jas did not want to clash with the Hearsts either. He had been worried Simon might act on youthful pride. Seeing Simon withdraw so calmly, Jas instead felt a faint resentnt toward the Hearsts.
Still, Jas understood. From today on, the Hearst family had effectively landed on the boss's blacklist.
Only, the Hearsts were not like Daenerys Entertainnt's competitors in Hollywood. A century-old family with a vast print dia network was simply not soone most people dared provoke.
After Jas left, Simon calmly began preparing for the morning eting.
According to the latest news, this week, Matsushita president Akio Tanii had a phone call with MCA chairman Lew Wasserman. Perhaps Matsushita's acquisition of MCA would take an unexpected turn.
If that happened, Daenerys Entertainnt would have to move early.
Combining what he rembered with the current situation, Simon felt that in the original tiline, Matsushita's acquisition of MCA had dragged on for months after becoming public largely because there were no competitors. With no one else bidding, Matsushita could take its ti and grind it out with MCA.
Now, with Daenerys Entertainnt watching like a tiger, Matsushita might not be desperately determined to buy MCA, given Japan's dostic economic situation, but it still likely wanted the deal. It would not keep delaying forever.
All the work on MCA had long been completed in advance. The morning eting was still about the plan to acquire Bell Atlantic.
Over the past two months, influenced by the Kuwait war, oil prices had continued rising and the U.S. stock market had kept sliding.
Bell Atlantic's latest market capitalization had fallen to the edge of $5 billion. At yesterday's close it stood at only $5.03 billion, down more than ten percent compared to the early days of the war.
Moving now was clearly the best timing.
With ample assets as collateral, Westeros Corporation's team had already solved the funding problem. Several banks they had contacted discreetly were willing to provide a combined total of $10 billion.
A loan request of that size could not stay hidden in financial circles.
So the banks had tested Simon more than once, probing whether he intended to rely entirely on borrowing to acquire companies while leaving that huge overseas sum where it was.
The suspicion was reasonable.
Repatriating overseas assets required paying a one-ti capital gains tax of twenty-eight percent. By comparison, borrowing carried an annual interest rate of around five percent. If the overseas funds could be managed properly and produce even ten percent a year, the strategy would be very cost-effective.
Simon had considered it.
In the end, he abandoned the idea.
On one hand, in the coming years, outside North Arica there would not be many markets capable of absorbing tens of billions of dollars in investnts that could deliver adequate returns.
On the other hand, that money, more precisely the tax he would pay when bringing it back, was a bargaining chip. A chip that could help push the federal governnt to approve his acquisition plans.
After all, a one-ti capital gains tax paynt on the scale of two billion dollars was not sothing a federal governnt drowning in deficits could casually ignore. If the federal governnt refused to allow Simon to launch acquisitions of both MCA and Bell Atlantic, Simon would certainly continue keeping the money offshore. That was not what the federal governnt wanted to see.
"We've already purchased 2.7 percent of Bell Atlantic's stock," Jas said when he and Simon had lunch together. "We can reach 4.9 percent before the end of the month. But with Bell Atlantic, our biggest issue is still managent. If we can get cooperation from Bell Atlantic's chairman and CEO, Raymond Smith, then with sufficient funding, this acquisition should go very smoothly. Given the current economic environnt and Bell Atlantic's nature as a company, I don't think there will be any other bidders jumping out to compete with us."
Simon nodded. "Wait until the end of the month. If the timing is right, I'll et Raymond Smith personally once."
Jas said, "Raymond Smith is very interested in literature and theater. The two of you will definitely get along."
Simon had already read the profile the company collected on Raymond Smith. "That alone isn't enough. If he agreed to the Westeros acquisition of Bell Atlantic just because we share a few topics, I'd have to consider whether we should keep him after the acquisition."
Jas said firmly, "Raymond Smith's ability is beyond question. But if you don't expect shared interests to help open the door, then we'll have to work a lot harder ourselves."
Simon smiled. "A deal worth several billion dollars. If everything goes too smoothly, I'll start wondering if I've walked into a trap."
They talked as they ate. After lunch, Simon followed his schedule to Daenerys Entertainnt's East Coast headquarters in Greenwich Village. He had been away from Los Angeles for a week, and a pile of matters from Hollywood had accumulated for him to handle.
He arrived around one in the afternoon and stayed busy until nearly four. After clearing most of the week's backlog, Simon leaned back in his leather chair and picked up a production proposal for an Antarctic docuntary under Highgate Pictures.
This was prompted by what Janet had promised little Gemma during lunch at Sophia's ho last week.
Janet had only planned to have soone going to Antarctica shoot a few tapes for the girl. But Simon rembered the docuntary that would break box office records, March of the Penguins, and he began considering a proper Antarctic docuntary.
He did not know Antarctica well, so he planned to test the waters with a normal docuntary first, train the team, then bring out a full plan based on what he rembered of March of the Penguins.
The Northern Hemisphere was already in autumn, but the Southern Hemisphere was in spring.
If they started preparing now, they could go into Antarctica during the Southern Hemisphere sumr and finish filming by the end of autumn.
As he read the proposal, Simon suddenly thought of Sophia again.
Sophia had been in Manhattan these days preparing for tomorrow's Saturday Gucci brand event. Simon's work for the day was already done.
After hesitating for a mont, Simon dialed her mobile number.
They chatted casually for a bit. She did not seem too busy either. Simon asked whether she wanted to co have coffee together, and she reminded him that he had quit coffee a long ti ago.
Then it got a little awkward.
After that, Simon simply put on his boss posture and told Sophia to wait for him at his penthouse on Lexington Avenue, since there was sothing to discuss.
Sophia asked what it was.
She looked determined to get to the bottom of it.
That could wait until they t. A boss could always find work for an employee to do.
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