Chapter 36: Chapter 36: Kicked Out?
Burbank is known as the media capital of the world, and the Warner Group's interconnected buildings are an important part of it. Warner Bros., one of Hollywood's traditional giants, is located there.
Like other companies in Hollywood, Warner Bros. produces numerous films each year and has a similarly strict review system. Every project that seeks production will be analyzed and evaluated by professional teams to determine potential risks and market value. These considerations include the genre of the film, target audience, past performance of similar films, potential actors, and possible directors.
These factors can significantly affect the film's eventual commercial performance.
While this cannot guarantee a film's success, it can minimize investment risks.
After this series of procedures, Duke's *The Rock* finally made it to the high-level meetings at Warner Bros.
The conference room was quiet as Jeff Robinov had his secretary distribute the documents prepared by the research team to several executives, including CEO Kevin Tsujihara. Even now, just thinking about having missed a million-dollar project makes him feel a twinge of regret. If he had only given that young man ten more minutes, *Speed* might have belonged to Warner.
Thus, when Nancy Josephson delivered *The Rock* to Warner Bros., Jeff Robinov was also pushing the review process while having his team investigate the most detailed information on Duke Rosenberg.
The data was quickly disseminated, and some had already begun flipping through the pages. The first page contained the director's evaluation.
In Hollywood, there is a procedural, even rigid, assessment system for directors and actors.
The criteria for evaluating a director are based on three key data points from the last five years: total box office, box office per screen, and weekly box office. Film companies generally use colors to differentiate the levels of directors: blue for top-tier directors and red for those considered less competent.
Thus, the past decade's box office of a director is irrelevant; only the last three films matter. As long as the weekly box office per screen exceeds ten thousand, they are regarded as a top-tier director.
Clearly, Duke, with only one film under his belt, did not belong to this category. Warner Bros. marked his name in green, indicating he had great potential.
Overall, Hollywood does not differ much from other North American commercial companies; everything is quantified and measured by data and commercial performance.
"There's one piece of information not included in the documents," Jeff Robinov slowly began, "My team discovered that shortly after Nancy Josephson submitted *The Rock* to various production companies, Duke Rosenberg filed a brief for a sci-fi project codenamed *DAY* and a war film codenamed *D-Day* with the Writers Guild. Although this doesn't prove anything, I think we should consider placing him among the most promising directors alongside Quentin Tarantino or Steven Soderbergh."
"I'd like to remind you," Executive Vice President Robert Solomon suddenly interjected, "that 20th Century Fox has already started negotiations with Duke Rosenberg."
"I have reliable information," Jeff Robinov said without acknowledging Robert Solomon, speaking calmly. "Duke Rosenberg's negotiations with 20th Century Fox have reached a stalemate, which presents a good opportunity for us to intervene."
"Don't forget, he only has one work!" someone next to Robert Solomon remarked.
"That one work grossed $130 million in North America!" another person chimed in suddenly. "With a worldwide box office exceeding $200 million! In today's Hollywood, how many directors can you find like that?"
Nothing speaks more convincingly than data and recent commercial performance.
"Our *Batman Returns* just premiered, and we need time to recoup costs." Robert Solomon continued, avoiding a discussion about the director. The success of *Speed* and the script of *The Rock* was indeed impressive, but that alone wasn't enough to justify opposition. "We are still lacking sufficient cash flow, especially with the high investments in *The Fugitive* and *True Lies*, which haven't completed production."
"I've heard some news," Jeff Robinov said with a slight smile. "Duke Rosenberg wants to bring in his own investment for his film, which could alleviate some of our funding issues. Additionally, Malibu's AUG Film Fund reportedly has interest in this project, and we can seek financing from them."
"And I have another idea," he continued. "Warner Bros. lacks closely collaborating directors. If this film is as successful as *Speed*, then Duke Rosenberg's commercial potential is immeasurable. His next two films will certainly become hot commodities. We could sign him to a 1+2 contract: if *The Rock* succeeds, we would have the priority investment rights for his next two films. If the market doesn't perform well, we can walk away."
Meanwhile, as Warner Bros. held its meeting, Nancy Josephson entered Duke's apartment. The news of the negotiations with 20th Century Fox reaching a stalemate was something she had deliberately leaked earlier. After all, Duke wasn't an inexperienced director; he could attract the attention of some investors.
"I have freshly brewed coffee here."
After seating Nancy on the sofa in the living room, Duke went to pour some coffee. "Care to try?"
"Thank you." Nancy nodded.
Filling her cup, Duke turned to Sofia Coppola, who was flipping through documents. "What about you?"
"No milk, no sugar." Sofia replied without hesitation. "Thanks."
After they all finished half a cup of coffee, Duke sat opposite Nancy and directly asked, "So, how did the negotiations go?"
"20th Century Fox values this project even more than we expected." Nancy put down her coffee cup and took on a serious work attitude. "They agreed to let you serve as one of the producers and offered a total compensation of $5 million for your roles as director, writer, and producer. They also agreed to let you invest."
"Isn't that good news?" Duke asked, puzzled.
"But they have additional conditions." Nancy's expression darkened, clearly irritated by Fox's terms. "Fox plans to use their tax rebate on this project, and those rebates will not count as revenue for the film, meaning we won't be able to share in that $5 million."
Furrowing his brow slightly, Duke gestured for her to continue. Such terms were not uncommon in Hollywood and were certainly not the reason for Nancy's irritation.
"Fox wants to include the promotional costs in the film's production costs..."
Generally, promotional expenses would not be accounted for in production costs. If Fox included this portion of expenses covered by the distributors as part of the budget, it would certainly increase their investment proportion, thereby diluting Duke's share of the profits.
But that wasn't all. "Fox refuses to allow our accounting team to participate in the film's future overseas distribution..."
"What do they want?"
Upon hearing this, Duke instinctively asked, "Are they trying to kick us out?"
Overseas promotional costs are notoriously difficult to pin down accurately. If there isn't a dedicated accounting team monitoring the process, 20th Century Fox could easily double their reported expenses. Having been informed about the previous scandals in Hollywood, Duke understood that including promotional costs in the production budget was a tactic used by studios to exploit outside investors.
Even in the future online information age, Hollywood is notoriously opaque with audits, using various means to deceive outside investors, such as hiding income, delaying payments, inflating costs, and obstructing audits.
Yes, 20th Century Fox might not necessarily employ such tactics on this project. Perhaps they simply thought too much, but no one could place such trust in the integrity of capital.
After all, Hollywood has even deceived Wall Street investments!
Nancy's words also reminded Duke of other Hollywood news he had seen before, the most notorious being Paramount's "Melrose Place Plan," which involved investments from Wall Street giants like Merrill, Allianz, and Morgan Chase. Paramount deceived them through numerous means, and the two parties ended up in court. However, due to the complexity of film income and the inability to accurately calculate overseas distribution income, the litigation dragged on for six long years, with Wall Street unable to get the desired results.
These people, who would deceive even vampires, could they be trusted?
If his accounting team wasn't involved throughout the entire process, Duke firmly believed that by the end of the project, 20th Century Fox's financial reports would undoubtedly show a loss!
But he was also puzzled. Hollywood frequently employed this tactic against outside investors but rarely directed it at insiders, especially when Fox's negotiating counterpart was someone as seasoned as Nancy.
"Fox doesn't intend to kick you out; remember, you haven't signed any agreements with them." Nancy quickly cleared up his confusion. "Fox is optimistic about the profit potential of this project; they don't want you in on the profits."
"So they raised my personal compensation," Duke immediately understood, "and then used this method to deter me from participating?"
"That seems to be the case."
Seeing Nancy nod, Duke thought for a moment and asked, "What about Thompson Rossman? What did he say?"
"These conditions were explicitly stated by Thompson Rossman to me."
Nancy's words shattered the remaining illusions Duke had about 20th Century Fox. Thinking from another perspective, he quickly understood that earlier Thompson Rossman appreciated him and supported *Speed* because it aligned with his and Fox's interests. But as soon as he tried to touch upon their interests, Thompson Rossman immediately stood on the opposing side.
"Aren't they worried I might withdraw from cooperation?" Duke asked again.
"Why should they worry? No other company has expressed interest in initiating a project," Nancy looked at Duke and said lightly, "Don't forget, you are not a top-tier director, and they are 20th Century Fox!"
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