Chapter 14: Chapter 14: I Want to Take a $2 Billion Loan
Beverly Hills, the Cooper Residence.
It was approaching 4 AM. Father and son had been talking for a long time but had finally reached an agreement.
Charlie Cooper, swayed by his son's arguments, felt a renewed flame of ambition in his chest. What lay ahead was a risky gamble.
Eric, having won $1.1 billion betting on the World Cup, was confident that, by joining forces with his father and utilizing insider information, they could successfully acquire MGM.
From his conversation with his father, Eric learned about MGM's dire financial situation. Despite successful films like "Legally Blonde" and "Hannibal" released last year, the company had suffered significant losses from movies such as "Original Sin," "Heartbreakers," "What's the Worst That Could Happen?" and "Killing Me Softly."
The film "Original Sin," starring Angelina Jolie, had a budget of $50 million but grossed only $35 million worldwide, resulting in a $30 million loss.
"Heartbreakers," with a total budget of $40 million, grossed $57 million but still resulted in losses.
"What's the Worst That Could Happen?" had a budget of nearly $80 million but grossed only $38 million, which was disastrous.
Thus, in 2001, MGM earned almost nothing. In 2002, the films "Rollerball" and "Hart's War" were also unprofitable. Especially the film "Windtalkers," which led to enormous losses.
"Rollerball," with a budget of $100 million, grossed only $25 million, bringing another round of huge losses.
"Hart's War," starring Bruce Willis, cost $110 million but grossed only $32 million, again resulting in huge losses.
"Killing Me Softly," directed by Chen Kaige, also failed to meet expectations.
Combined with the sudden failure of "Windtalkers," MGM had been incurring losses for half a year.
However, upcoming films "Red Dragon" and "Barbershop," one due in October and the other in November, were expected to bring significant profits. According to Eric's recollection, these films should be highly profitable. If MGM could hold out until then, the acquisition process would become much more complicated, so now was the ideal time for the deal.
"Dad, if I'm not mistaken, Kirk Kerkorian and his close relatives own more than 80% of MGM's shares, right?"
Charlie Cooper shook his head. "Not 80%. In fact, no less than 92% of the shares are under their control. MGM practically belongs to Kerkorian."
"So, if we reach an agreement with Kerkorian, we won't face any obstacles in the acquisition, right?"
"In principle, yes. Moreover, we have a favorable situation right now. Kerkorian's hotel business isn't doing well, and MGM's losses have made him reconsider selling the company."
"Dad, what do you mean by 'reconsider selling'?"
Charlie Cooper explained the history of MGM, which had been acquired by Kerkorian in 1970 due to financial difficulties. However, Kerkorian, having little interest in film, focused on the casino and hotel business. He bought MGM to use its land and launder money.
After that, Kerkorian repeatedly sold and repurchased MGM, which only worsened its condition. Now, influenced by the events of 9/11 and other factors, the hotel and entertainment business in the U.S. had suffered, and Kerkorian was once again considering selling MGM to restore his hotel assets.
Eric pondered, "Dad, is it possible to get inside information on MGM's hotel business?"
Charlie Cooper answered without hesitation, "Impossible. Although there are people at MGM placed by Kerkorian, they aren't privy to matters related to the hotel business. I don't have connections in that area either."
"Instead of trying to get insider information, it's better to talk directly to Kerkorian. I've worked for him for many years, and I'm sure he'll listen to me."
...
Beverly Hills, the Cooper Residence.
Waking up at noon, Eric and Charlie Cooper, who didn't go to the office today, continued their discussion over lunch.
"What are you two whispering about? Are you keeping secrets from me?" Emily asked, looking at them suspiciously.
"No, Mom. We're just discussing work. I think working in the film industry is a good choice."
Emily wasn't worried about her son's ventures. She believed that with his abilities, he would succeed in any field.
After lunch, Eric drove his father to Citibank. He had an account there with $330 million.
Although it was the weekend, the bank manager came in specially to meet them after receiving a call.
They were escorted to the VIP room, where a middle-aged man in a business suit awaited them.
"Mr. Cooper, how can I help you?" the manager asked, looking surprised at the father and son.
Charlie Cooper shook his hand: "Eric is my son."
The manager glanced at both of them and finally sat down, astonished: "I didn't expect our mysterious client to be your son. Your upbringing is certainly impressive."
Obviously, the manager thought that the $330 million belonged to Charlie Cooper. For a CEO, that could be understandable. But if this money belonged to a recent college graduate, the manager might have suspected something fishy.
A woman in black stockings and glasses brought them coffee, smiling.
Studies show that the presence of attractive women increases the likelihood of successful deals by a few percent.
"Mr. Cooper, what transaction would you like to conduct? We have several offers…".
Charlie Cooper interrupted the manager: "A loan. I want to take out a loan."
The manager hesitated: "Mr. Cooper, given the current situation with MGM, Citibank…".
"No, it's me who wants to take out a loan," Charlie interrupted again.
The manager and the woman in black stockings both froze, wondering why such wealthy individuals would need a loan.
"Mr. Cooper, what amount are you looking for?".
"The more, the better. If Citibank can provide $2 billion, that would be perfect."
The manager almost spit out his coffee but maintained professionalism, especially when dealing with such clients.
The manager didn't immediately refuse but asked: "Mr. Cooper, could you explain the purpose of the loan? We need to assess the risks."
Charlie briefly outlined the plan to acquire MGM and added a small lie: "It's an ambitious plan, but I already have $1.1 billion, and Morgan Stanley and Goldman Sachs have also agreed to provide loans. Now it all depends on whether Citibank wants to participate in this."
The situation changed instantly.
The manager, swallowing hard, said: "Mr. Cooper, I don't have the authority to make such decisions. I need to seek instructions from headquarters."
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