Capítulo 194: Chapter 194: Deal
It was noon.
In an Italian restaurant near Santa Monica Beach, Simon arrived to find Terry Semel already there, seated at a table and reading a newspaper. Upon Simon's arrival, Terry stood up, shook Simon's hand, and they both sat down.
Simon took the menu from the eager, tall waitress standing by his side and casually asked Terry, "Any news today?"
Simon had been extremely busy recently, making it difficult for him to keep up with the latest news.
Terry, also picking up his menu, smiled and said, "Both presidential candidates gave interviews where they announced that if elected, they would implement stricter regulations on the financial derivatives market to prevent another 'Westeros incident.'"
Simon quickly decided on his lunch, handed the menu back to the waitress, and remarked, "That has nothing to do with me. Their actions will only upset their Wall Street backers."
Terry glanced up from his menu and looked at Simon with a hint of curiosity, "Are you trying to tell me that you'll never venture into the futures market again?"
Simon gave an ambiguous response, "Stricter regulations will only affect those trying to make huge profits through insider trading or other unconventional means. There's not a single person in the top ten of the Forbes list who got there by such methods, and that includes me."
Terry couldn't help but recall some of the rumors within their circles—that the Southern District Court of New York and other major regulatory agencies had never entirely stopped their covert investigation into Simon. However, to date, no unfavorable information had surfaced against him.
With time, those investigations were bound to fizzle out.
After ordering, and dismissing the waitress who kept glancing at Simon, Terry said, "Simon, we recently acquired Lorimar. I'm sure you know about this, right?"
Simon nodded, understanding why Terry brought it up.
Founded in the 1960s, Lorimar Productions was the largest television production company of its time. It rose to prominence in the 1970s, peaked in recent years, but quickly declined following last year's stock market crash and this year's writers' strike.
Just a few months ago, Simon and Amy had visited the MGM studio lot in Culver City, which Lorimar wanted to sell.
When Simon heard the news about Warner's acquisition of Lorimar earlier this month, he realized this move likely laid the foundation for Warner's TV division, leading to the production of hit shows like "Friends" and "ER" in the 1990s. Before this, Warner's television business wasn't particularly strong.
Seeing Simon nod, Terry continued, "I heard you were interested in the Culver City MGM studio lot. We're planning to sell that property. Are you still interested? I assure you, the price will be very reasonable."
Warner Bros. had extensive production facilities in Burbank and clearly didn't need a second studio.
However, Simon didn't hesitate and shook his head, "Terry, that studio is too outdated. Rather than buying it and undergoing extensive renovations, I'd prefer to find a new plot and build from scratch. It would be cheaper."
Terry responded, "But Simon, unless it's in the suburbs, it's hard to find a 50-acre plot within Los Angeles."
Simon replied nonchalantly, "Suburbs are fine. When these studios were initially built, they were all in the outskirts. It's just the city's growth that has enveloped them into the urban area."
Terry had been confident he could offload the MGM studio lot to Simon, but seeing his lack of interest, he had to abandon the idea and said, "Then, Simon, about the matter we discussed last time—you've already acquired Marvel Entertainment, controlling a vast array of superheroes like Spider-Man, the Fantastic Four, and the X-Men. I'm curious, why are you still interested in DC's superheroes? Without a strong reason, it will be hard for Warner to give up Wonder Woman."
"Making Marvel's superhero movies is challenging. Take Spider-Man, for instance. With current technology, it's hard to realistically depict Peter Parker swinging between skyscrapers," Simon answered without much thought. "In comparison, DC's superheroes are much easier to bring to film. As for my intentions, Terry, it's straightforward—I want to accumulate more rights. That's what every Hollywood studio does. It's no secret. Before me, Cannon Films had secured the rights to both Spider-Man from Marvel and Superman from DC. Of course, those rights are now with Daenerys Entertainment."
"You're different from them," Terry shook his head. "I remember you telling me at the Oscars after-party that you plan to have Superman and Batman crossover—'Batman v Superman,' wasn't it? And now you want Wonder Woman too."
"Terry, I don't want to waste time on these preliminaries. Can you just state Warner's terms?"
Terry didn't beat around the bush, "Simon, Warner is willing to give you 'The Bourne Identity' and 'Wonder Woman.' We are prepared to fully relinquish 'The Bourne Identity,' but for 'Wonder Woman,' Warner must retain a 50% investment stake. However, unlike with Superman and Batman, Daenerys Entertainment can handle the distribution of 'Wonder Woman.' In return, Daenerys needs to partner with Warner on a project that grosses over $100 million at the box office. We'd follow the profit-sharing model of 'Basic Instinct.' If our joint project doesn't reach $100 million domestically, the contract will automatically extend for another film until we meet that goal."
Simon weighed Terry's terms and quickly responded, "If that's the case, I can't allow Warner to control the distribution. Making a movie gross over $100 million domestically is challenging, but making sure it doesn't reach that mark is too easy."
"I understand," Terry smiled. "So, if you insist, Daenerys can retain the distribution rights."
Simon realized that this deal would significantly disadvantage Daenerys Entertainment.
In the 'Basic Instinct' profit-sharing model, the two companies equally split production costs. Daenerys provided the screenplay rights and was heavily involved in production, while Fox handled the film's distribution. Their investments were fairly balanced.
Now, if Daenerys kept the distribution rights, it meant Warner was simply investing half of the production budget and then completely stepping back, waiting to share half the profits. Meanwhile, Daenerys would bear the full burden of production, marketing, and distribution.
This was clearly unacceptable.
After considering for a moment, Simon added, "Daenerys will retain the distribution rights, but Warner must also cover half of the marketing budget."
Terry readily agreed, "No problem."
The two had only sketched out the broad framework of their collaboration. The details would require thorough negotiation to ensure mutual benefit. Therefore, without further hesitation, Simon extended his hand to Terry and said, "Deal."
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