Capítulo 92: Chapter 92: Too Good to Be True
[Chapter 92: The Sweet Deal Was Too Good to Be True]
After hearing Amy Pascal relay the conditions set by Coca-Cola CEO Donald Keough, Eric found it hard not to be intrigued. He even wondered if there was some sort of catch waiting to trap him, because how often did such a golden opportunity just fall into one's lap?
The offer was astounding: a generous budget without any interference in the film's production. They would even provide a team to help him produce another movie to meet his contractual obligations with Fox, and afterward, he would still get thirty percent of the domestic gross and ten percent of the international earnings.
Such an offer seemed downright outrageous -- Spielberg himself wouldn't get terms this good.
"Amy, it feels unreal for Columbia to throw such conditions my way. You know, my last collaboration with Columbia wasn't exactly pleasant, so it's hard for me to believe there isn't some... trick involved here."
Amy responded earnestly, "Eric, trust me. To make this deal happen and to prevent any interference, the board specifically removed the former president, Cohen Blount, from his position. That shows Columbia's sincerity."
Eric still shook his head. While he was happy Cohen was gone, it didn't convince him that Columbia did this just for him. "I need a real reason that can convince me."
Amy paused for a moment and explained in detail, "Columbia is in acquisition talks with Sony of Japan. They need a blockbuster to boost their stock prices, and you are the safest bet right now. The three films you've been involved with have generated incredible box office returns. With the continued success at the box office, audiences have formed a strong tendency to show up for your next film. If your upcoming movie maintains the same standard, reaching over a hundred million at the box office is practically guaranteed."
As Eric began to look less skeptical, Amy continued, "So don't think Columbia would make a losing deal. This is a win-win partnership. Eric, the success of Home Alone has already pushed Columbia's stock from twelve dollars to fourteen. Their market value rose from 2.2 billion to 2.56 billion."
Eric did the math in his head, realizing that because of Home Alone's success, Columbia had gained 360 million in market value.
Under normal circumstances, such a rise would be cause for celebration, but shareholders typically wouldn't sell off stocks just because the price went up two dollars. After all, they cared more about long-term benefits, which mainly came from annual profit dividends. Also, if a film investment failed, the stock price could drop again.
However, after Sony decided to acquire Columbia, everything changed; every penny of stock growth was equivalent to real cash. Columbia's shareholders wouldn't worry about net assets when dealing with the Japanese. If they wanted to buy, the price set was what they'd pay, with some added premium for good measure.
Eric recalled how, in his past life, Sony acquired Columbia for nearly five billion, which proved to be a colossal misstep since Columbia's actual assets were worth less than two billion. Just a year after the acquisition was completed, Columbia's stock dropped back to normal levels, erasing 2.7 billion in market value, leaving the Sony board in anguish.
"Amy, if that's the case, I'd be more than happy to collaborate with Columbia again. However, I already signed a deal with Fox for three films. As for your suggestion that Columbia could provide a crew to fulfill my obligations to Fox, I can't agree to that. It concerns my reputation, and there are already many who doubt my ability to produce quality films at my age."
Upon hearing Eric soften, Amy asked, "Eric, do you have a plan in mind?"
Eric smiled slightly. "I'd bet you guys have already seen the details of that contract. That's probably why you offered those terms. Even though the domestic split is five percent less than with Fox, considering what Columbia was willing to sacrifice, the deal still makes sense." Amy felt a bit embarrassed; while the specific terms with Fox weren't classified, they hadn't been publicly disclosed either -- clearly, some corporate espionage was at play.
Eric had no interest in gossiping about this and continued, "Since Columbia already knows the contract details, you should understand that Fox primarily wants the distribution rights for the Home Alone sequel, which is why they made specific clauses about that film. But they didn't place as much importance on the other two projects, which means..."
Amy Pascal excitedly interjected, "So, your next film doesn't necessarily need to go to Fox for distribution as long as you deliver the three films to them by the end of the year, right?"
Eric nodded but shook his head at the same time. "While that wouldn't technically breach the agreement, Fox wouldn't be easy to negotiate with. They already scheduled my next film for the summer release, and since Fox has few films coming out this year, if I dropped out, it would mean they'd lose their chance in the summer box office battle -- a potential loss of at least tens of millions to over a hundred million dollars."
Amy Pascal frowned in frustration. Although the major studios competed against one another, Columbia couldn't possibly offer enough leverage for Fox to give up such significant profits.
Eric shrugged helplessly. He couldn't think of a solution, and the summer film slate was already crowded, especially among major productions. While Eric could indeed take a shot and direct one more film for Fox -- something others might struggle with -- he certainly didn't want a situation where he found himself competing against his own film with another.
Yet, he was also reluctant to give up those sweet terms from Columbia. Even if he projected a two hundred million box office for his next film, he would only earn ten million less than with Fox, but Columbia was willing to cover the production costs of thirty million.
Moreover, he didn't feel overwhelmingly confident about his next film. Even inviting Tom Cruise and Tom Hanks along with his previous box office pull would surely yield considerable earnings, but the exact potential return was uncertain.
"Amy, give me a few days. I need to speak with Mr. Barry Diller first. It would be best if I could gain Fox's understanding. If we can't reach an agreement, I still wouldn't be violating the contract."
"Does Columbia need to do anything?" Amy Pascal asked.
Eric shrugged, "What could Columbia do? Should you walk into Barry Diller's office and say, 'Hey, we're negotiating with the Japanese and need some leverage. How about letting us take Williams' next film?'"
Amy laughed and shook her head. "Alright, I'll wait for your good news. If you need help, feel free to reach out."
After exchanging contact information, they parted ways. Once Eric got home, he immediately called Barry Diller's office, only to be told by the assistant that Diller was on a business trip in Europe and wouldn't be back for four days. Although the assistant provided Diller's temporary contact number, Eric decided against calling him directly and instead set up a meeting for four days later.
After all, discussing this matter over the phone would be challenging; the distance between them made it crucial to ensure clear communication. If the conversation went poorly, it could turn into a costly blunder.
*****
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