Chapter 146: Chapter 146: No Slowing Down
After a brief rest in Parker City, Simon returned to Los Angeles and was once again engulfed in a whirlwind of work.
In Santa Monica, at the Daenerys Entertainment headquarters, Simon, Amy, and CAA President Michael Ovitz sat around the conference table to discuss the upcoming productions of "Rain Man" and "Steel Magnolias."
The main production plan for "Rain Man" was already settled, with only minor details left, not taking up much of their time.
However, the atmosphere tensed up when discussing "Steel Magnolias." Daenerys Entertainment wanted to invite CAA's director Herbert Ross and actress Sally Field for the movie, both of whom were part of the original creation. But Michael Ovitz's conditions were unacceptable to Simon.
"Michael, $10 million for Herbert Ross and Sally Field together is too high. 'Steel Magnolias' is an ensemble film. If I pay such high fees to Ross and Field, other actors will demand more, making it difficult for Daenerys Entertainment to afford this project. So, we can offer $5 million to Ross, and for Ms. Field, only $1.5 million."
Herbert Ross wasn't just the director of the original "Steel Magnolias" but also of "The Secret of My Success," which grossed over $60 million in North America, and "Footloose" in 1984, which made $80 million in North America on an $8 million budget.
Hollywood director's worth is ultimately determined by box office success, making Ross's $5 million demand reasonable.
However, despite Sally Field's two Oscar wins in 1979 and 1984, she didn't have significant box office pull. Given that "Steel Magnolias" was an ensemble film, Simon could only offer $1.5 million.
Michael Ovitz, staring intently at Simon in his usual negotiating posture, expressed dissatisfaction, "Sally is a two-time Oscar winner, Simon. Do you think $1.5 million is possible?"
Simon, unfazed by Ovitz's gaze, responded, "That was years ago, Michael. We both know in Hollywood, no one can rely on one or two Oscars for a lifetime of A-list paychecks. Given Ms. Field's box office appeal, $1.5 million is already high."
"This is impossible," Michael shook his head, then slightly softened his tone, "Alright, Simon, considering the specifics of this film, I can make some concessions: $6 million for Herbert and $3 million for Sally. However, you must agree to two conditions: first, all other supporting roles must be selected from CAA. Second, Robin is still very interested in 'Dead Poets Society,' and I want you to give the lead role to her."
"If you insist on these demands, Michael, my answer is the same as yours: impossible. First, I'm not planning to make 'Steel Magnolias' a CAA package project. Second, Bob has already agreed to star in 'Dead Poets Society,' and I can't just give the role to Robin Williams."
After a small-scale screening that garnered sufficient acclaim, "Good Morning, Vietnam" officially went wide last Friday, earning $11.75 million in its opening weekend, with media predicting the film would surpass $16 million in its fourth week. As a hit film destined for longevity, breaking the $100 million mark in North America was just a matter of time for "Good Morning, Vietnam."
As the lead, Robin Williams ascended from a second-tier actor to an A-list superstar.
Daenerys Entertainment missed out on signing him last-minute due to CAA's sudden change of heart at the end of last year. While Simon regretted this, he wasn't about to let CAA lead him by the nose. The company had already negotiated with De Niro for "Dead Poets Society" and "The Sixth Sense," and although contracts weren't signed yet, Simon wouldn't pull a last-minute switch like CAA.
The conversation ended in a stalemate, with neither side willing to budge. Ovitz eventually leaned back, suggesting that their meeting might have to end there.
Simon stood up, extending his hand across the table, "Then, Michael, I hope we have the chance to work together again."
Ovitz was taken aback by Simon's decisiveness. This young man's words clearly meant that Daenerys Entertainment would no longer pursue "Steel Magnolias" with CAA, and any potential for "Dead Poets Society" was off the table.
After shaking hands, Ovitz tried to persuade, "Simon, business shouldn't be personal. Think it over and call me anytime."
"I think I've already made up my mind."
"Then, I wish you luck."
After Ovitz left, Simon sat back down, checking his watch before turning to Amy Pascal, "Let's drop Herbert Ross and Sally Field. We'll pick someone from WMA or ICM."
Given the star status of Ross and Field, Daenerys Entertainment had budgeted $15 million for "Steel Magnolias." However, following Ovitz's pricing, the film's budget would balloon to $20-$25 million.
In the original timeline, "Steel Magnolias" grossed $80 million in North America. Even with a $25 million budget, Daenerys Entertainment could still profit, but compared to the total investment for self-distribution, Simon could only hope for profits through other distribution channels, significantly lengthening the payback period.
Amy Pascal, though fond of "Steel Magnolias'" story about Southern women, had much lower box office expectations than Simon. For business reasons, she preferred the film as a low-budget project under $10 million.
Hearing Simon's decision, Amy didn't object but instead shifted the conversation, "Simon, we need to talk about the company."
Simon braced himself, "What's up?"
Amy handed over a folder, "Take a look. Simply put, the company is running out of funds."
Simon flipped through the budget sheets and expense reports for Daenerys Entertainment's film projects.
Excluding "When Harry Met Sally" and "Pulp Fiction," which were nearly finished with post-production, the company had officially greenlit six movies: "Basic Instinct," "Scream," "Steel Magnolias," "Blue Angels," "Rain Man," and "Dead Poets Society."
Aside from "Basic Instinct," a $20 million co-production with Fox, the other five films were solely funded by Daenerys Entertainment.
With budgets ranging from $10 million to $25 million, the films required a total investment of $75 million. After setting aside this amount, the $100 million loan from Wells Fargo left only $25 million.
However, of this $25 million, $7 million was spent on acquiring "Charlie's Angels" rights, and deals with United Artists for "The Hobbit" and "Rain Man" scripts cost $2 million. Recent expenses on rights acquisitions like "Spider-Man" and "Teenage Mutant Ninja Turtles" also amounted to millions, plus operational costs, leaving Daenerys Entertainment with just over $10 million in liquid assets.
Amy added, "With 'Final Destination' ending its run last week and a North American gross of $72.61 million, we'll receive 10% of the box office share next month, which is $7
.26 million. However, if you proceed with your offer to Saul Zaentz for 'The Lord of the Rings' and potentially 'The Silmarillion' from the Tolkien Estate, our funds will be insufficient. The scripts you picked in Parker City, planned TV shows, and future marketing for 'Scream' require significant investment. Simon, I understand your urgency, but I think you need to slow down. You're only turning 20 next month; compared to most in Hollywood, you have plenty of time."
Simon, reviewing the documents, felt the financial strain faced by companies like Cannon Films, De Laurentiis Entertainment, and now New World Entertainment, who all encountered sudden difficulties amid apparent success.
The entertainment industry is incredibly costly, with slow returns on film projects. Without income to cover expenses and external financial support, a company can quickly collapse.
If not for his substantial assets and foresight on selected projects, Simon was sure Daenerys Entertainment would face the same fate as Cannon Films and others in the coming years.
Simon understood Amy's advice.
But could he really slow down?
He was about to meet with Warner Bros. CEO Terry Semel to discuss "Batman."
If he slowed down, if he let go of "Batman," according to the original timeline, Tim Burton would direct it by the end of the year, releasing next summer and becoming the year's box office champion.
Then, "Batman," "Superman," and the entire DC universe would have no connection to Simon Westerlo.
Given Warner's low confidence in "Batman" following "Superman IV's" failure, this was Simon's last chance to get involved with this top-tier superhero franchise. How could he possibly slow down?
Likewise, the projects Daenerys Entertainment was developing and the rights already purchased were guaranteed hits in the next few years.
Once these projects succeeded, any interest from Simon in other novels or scripts would trigger a bidding war, making it increasingly difficult for Daenerys Entertainment to accumulate more IPs. Simon needed to seize the current opportunity, where many still saw him as a 'fat sheep,' to acquire as many IPs as possible at a lower cost.
Moreover, Simon couldn't slow down on matters outside Hollywood.
He couldn't slow down.
After going through the documents, Simon made his decision, "Amy, the expenditures for 'The Lord of the Rings' and 'The Silmarillion' will go directly through Westerlo Corporation's account. I'll have George handle the negotiations with the rights holders. The company will continue as planned. The three scripts I brought back from Parker City, Michael Hoffman's 'Sisters,' and Whit Stillman's 'Metropolitan' should be greenlit immediately; their combined costs won't exceed $6 million and won't impact the big picture. '3000' will be put on hold; I have other plans for it. Besides, these are just budgeted expenses, the money won't be spent all at once, giving us a lot of flexibility. 'When Harry Met Sally' releases at the end of March, we'll have incoming funds. If necessary, I'll transfer funds from Westerlo Corporation or we could apply for another loan."
Amy, sensing Simon's determination, knew further persuasion was futile, "Adding two more movies makes eight in total; I can't handle them all."
Simon considered, "After 'Pulp Fiction' wraps, I'll focus mainly on the company's projects for the rest of the year. Signing a few more producers should suffice."
For projects like "Steel Magnolias" and "Dead Poets Society," since Simon decided against the original creative teams to maintain the films' quality and style, he had to invest more effort.
Simon also wanted to see if these movies could still succeed without their original creators, as he might not be able to assemble the original teams for many upcoming films. He disliked the invisible restrictions and didn't want to be manipulated by agencies like CAA over casting issues.
After discussing with Amy for another half hour and concerned about traffic causing a delay, Simon left Santa Monica around 11 a.m. for a lunch meeting with Terry Semel in Burbank, near the Warner Bros. studio.
Arriving at the restaurant, Semel was already waiting.
As they ordered, Semel smiled and asked, "Heard you gave up on acquiring New World Entertainment?"
Simon nodded with a resigned smile, "Yeah, everyone wanted to fleece the sheep. The stock price was inflated beyond my reach, so I had to let go."
Today was January 20th, Wednesday.
In New York, Westerlo Corporation had sold off all New World Entertainment stock the day before. Perhaps investors were hoping for a last-minute move from Simon, so the stock price remained high at $11.5, well above the $7.5 before the news broke.
In a brief half-month maneuver, selling all shares earned Westerlo Corporation over $11 million, not a wasted effort.
New World Entertainment, failing to start formal acquisition talks with Westerlo Corporation, saw Larry Koopin announcing a lawsuit against Westerlo for manipulating stock prices after learning Simon had sold all shares. The matter was still unresolved.
Regardless, Simon wouldn't give up on New World Entertainment, at least not on its Marvel division.
However, Simon wasn't planning to make a move anytime soon.
Compared to its lukewarm film division, New World Entertainment's main profit came from TV production.
But soon, Hollywood would face its longest strike in history. Film companies often stockpile scripts, so they're less affected by strikes. TV production, however, usually involves ongoing scriptwriting, making the industry particularly vulnerable.
If the strike prolonged, even if New World Entertainment resolved its financial issues, the lack of writers would halt its TV production, further worsening its operational state.
Thus, the best time for Simon to act would be during the strike's progression in the latter half of the year.
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