Bab 199: Chapter 199: Organizing a Group to Make Money is Called a Consortium
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Chapter 199: Organizing a Group to Make Money is Called a Consortium
Luke, a well-known director, found himself at the center of a major scandal that immediately attracted significant attention. The incident involved Gina, who publicly complained about being threatened and assaulted during filming. This led to widespread media coverage and major newspapers reporting the story.
Gina had been coerced into performing degrading acts on set, and when she protested, she was physically attacked. The situation escalated when she was threatened again in her hotel room. She stopped the film production, demanding compensation for the damages and risking further confrontation. Ultimately, she endured four separate incidents of assault.
The report of these events created immense pressure on Luke. With only a third of his film completed, Columbia Pictures terminated his contract and sought to replace him with other directors.
Columbia Pictures faced a difficult decision. The Actors' Union had sent a letter demanding a thorough investigation into the allegations. They warned that without compliance, they would mobilize all members to boycott Columbia Pictures, which put the company in a tough position.
Admitting fault would damage their reputation, while denying the allegations would likely lead to further trouble from the union. The company initially sought to delay the issue, but the next day, a group of demonstrators gathered outside Columbia Pictures, protesting the company's lack of management and responsibility.
An ABC TV reporter filmed the protest, and the news spread nationwide. The public outcry and media reports put further strain on Columbia Pictures, leading to a sharp drop in their stock price. Shareholders were outraged and demanded immediate action from the company's president.
The president of Columbia Pictures contacted Hardy, seeking to resolve the issue. "Mr. Hardy, Luke is just a contracted director at Columbia. We have terminated his contract unilaterally, hoping this will make the protesters withdraw."
Hardy responded, "I've heard from our lawyer that you invested in the movie and that the staff involved were all from Columbia. The lawyer faced significant resistance while collecting evidence from the crew."
The accusations against Luke included assault and deliberate misconduct on set. Although Luke denied these claims, the presence of numerous witnesses made the evidence compelling.
The president of Columbia Pictures agreed to instruct the crew to cooperate with the lawyer in gathering evidence. Sacrificing a director seemed a small price to pay for the company's benefit.
Two days later, evidence collection confirmed that the script lacked explicit content initially, but Luke had imposed a scene with degrading elements, including an offensive shot involving Gina. Gina's protests were met with physical violence, witnessed by the entire crew.
With Columbia's cooperation, the union withdrew the protesters, and Columbia Pictures was able to recover from the crisis.
Andy reported to Hardy that he had shorted Columbia Pictures' stock and made a profit of 1.2 million dollars. The impact of the scandal continued, with the focus shifting to the lack of direct evidence for the hotel room coercion. Nonetheless, the confirmed abuse and Luke's damaged reputation would make it difficult for him to find future work.
The incident served as a warning to others in the industry, reinforcing Hardy's influence and reputation among actors and media.
With union matters temporarily settled, Hardy turned his attention to his own affairs. After over two months of preparation, Andy and his team had organized the information and procedures for forming the Hardy Group.
"Boss, according to our previous discussions, the Hardy Group will include eight companies: HD Security, HD Films, HD Brokers, Playboy Magazine, HD Toy Factory, HD Airlines, Global Times, and ABC TV," Andy reported.
"As for Estee Lauder, Walsh Mining Company, MEBO TV Factory, Rocky Mountain Mineral Water Factory, the auction company, and two wineries, these will remain personal investments and not be included in the group management. I plan to establish a 'Personal Asset Management Company' to handle these assets."
"Additionally, there are investment projects such as the motorcycle factory, clothing factory, and chocolate factory shares. We'll form an 'Investment Company' to manage these investments."
"The Hardy Hotel will continue to be managed separately due to its unique nature."
"My Andy Investment Financial Management Company and Baker McKenzie Law Firm, where you own shares but do not manage, will also be included in personal investment management."
In this way, Hardy's business interests were clearly organized.
"Boss, I've done a preliminary calculation. The total assets of Hardy Group amount to 150 million dollars, personal assets to 50 million, and Hardy Hotel to 50 million, totaling over 250 million dollars. Listing certain industries, such as casinos or ABC TV, could significantly increase your net worth."
Hardy shook his head. "I don't need money right now, and I'm not interested in pursuing market value for its own sake. Remember, Hardy Group's core assets will never be listed. The listed assets are only for raising funds and can be discarded at any time."
Andy nodded in understanding.
"Boss, we plan to register the group in Las Vegas. Nevada has low taxes and no personal income tax. Setting up a headquarters there would be very advantageous. If you agree, I'll submit the application to the Las Vegas government."
Nevada, with its favorable investment environment, including low business taxes and minimal filing requirements, is an attractive location. California's 20% personal income tax is a stark contrast.
"Go ahead with the application. By the way, have you found a suitable headquarters building?" Hardy asked.
"I have a few options and brought the information for you to review. If none are suitable, I can find more options," Andy replied, handing Hardy the information.
Los Angeles, being within a major seismic zone, has limited high-rise buildings. Hardy chose a ten-floor building in downtown Los Angeles to serve as the interim headquarters for Hardy Group, with a prominent neon sign on top. He preferred renting over buying due to his personal dislike for the building style.
"Later, we'll build a true Hardy Group headquarters in Las Vegas. I have a plot of land there, but that's something we can plan for in ten years," Hardy said.
After making these decisions, Hardy smiled at Andy. "From now on, you will officially take the position of President of Hardy Group. You are the most suitable person for the job."
"Thank you for your trust, boss. I will manage the company well," Andy replied.
"Well, form the management team for Hardy Group. You're more capable in that regard than I am," Hardy said with a smile, patting Andy on the shoulder.
Having not seen Taylor for a while, Hardy called her to go out and have some fun. Taylor was excited and quickly prepared, with Sara helping her choose clothes.
Taylor opted for a long skirt and a loose cashmere sweater, accessorized with a small woolen hat. Hardy's car arrived, and Taylor happily got in. Sara watched her daughter depart and noticed her kissing Hardy in the car, feeling a mix of emotions.
Sara had initially hoped for her daughter to marry a wealthy man, but Hardy had exceeded all expectations. Now, Hardy's power, money, and status seemed beyond her imagination.
"I've missed you, Mr. Hardy," Taylor said playfully, holding Hardy's arm.
"How's the script coming along? Filming for 'Beauty and the Beast' starts in a month, right?" Hardy asked with a smile.
"The script is manageable, but there's a singing scene I want to perform myself, so I've hired a vocal coach to help me," Taylor replied.
"If it doesn't work out, you can always dub it," Hardy suggested.
"No, I want to do it myself," Taylor insisted.
They first visited the mall, bought some items, and then went to Hardy's manor, where they enjoyed a relaxed time together. Taylor returned home late that night.
Sara observed her daughter's behavior closely, relieved to see nothing unusual.
The next day, Hardy received a call from Director Nolan, who asked him to come and view the finished film. When Hardy arrived, the main actors, Heidi Ramah and Lee Gen, as well as the HD Pictures executives, were present.
The movie, a pure urban film with minimal special effects, was showcased. When the theme song "Human Ghost Love Is Not Over" played, it made a strong impression. Hardy credited the song, performed by Bill Medley and Bobby Hetfield from HD Records, as a key factor in the film's success.
After watching the film, Hardy applauded, and others joined in. "The performances by Heidi and Lee Gen were outstanding. Director Nolan's skills are impressive. I'm confident this movie will be a hit."
Everyone was pleased with Hardy's comments. Hardy instructed Edward to create a five-minute promotional video for ABC TV and to ensure the theme song was broadcast. He also planned to send a record to radio stations for additional promotion.
For distribution, Hardy decided to contact Meyer. "Mr. Meyer, the movie 'Human Ghost Is Coming' is ready for release. Can MGM assist with distribution?"
"Of course, I'll inform the distribution department to get in touch with HD Pictures," Meyer replied.
Meyer also mentioned, "Regarding the casino project, we've added two more investors. You'll meet with them soon. The partners include Bank of America, Mersey Pharmaceuticals, Croke Agricultural Products Company, Pepsi-Cola Company, and Lockheed Aircraft Manufacturing Company."
Hardy realized these companies were part of the California Consortium—a group organized to make money. He wondered if they had other motives.
"Meeting them will be beneficial," Hardy said, noting the prominent involvement of these major companies.
Bab 200: Chapter 200: Alliance of Interests
"Why the sudden increase in investment?" Hardy inquired.
He already had some suspicions.
Meyer explained, "Initially, our partners were Pepsi, Crocker Agricultural Products, Mersey Pharmaceuticals, and you and I, contributing 20 million yuan."
"Later, when you mentioned adding 50 million, I informed my partners. They decided to bring in new investors—Bank of America and Lockheed."
"When they learned about your new casino project with a 100 million yuan investment, they deliberated and agreed that a larger investment would be advantageous. So, they decided on a final amount of 100 million yuan."
"Bank of America has assured us they will safeguard the remaining funds after other investors' shares are removed."
Hardy thought to himself that Meyer might struggle to manage everything in the end.
Originally, Hardy had promised Meyer the opportunity to invest in Las Vegas casinos. Meyer's idea was for MGM to dominate the stock and control the casino. However, with the involvement of major capital, MGM had become marginalized.
In the face of Bank of America's colossal presence, MGM was insignificant.
Bank of America saw the Las Vegas casino as a lucrative opportunity and wanted to capitalize on it.
"Is there a plan for the distribution of shares?" Hardy asked.
"Meyer replied, "Mr. Amadi Giannini, the chairman of Bank of America, wishes to meet you before discussing the equity distribution."
Hardy realized that the interest was not just in the Las Vegas gambling industry but also in himself.
"Not a problem, Mr. Meyer. Please arrange a meeting with Mr. Giannini," Hardy said.
Such encounters were inevitable for someone experiencing rapid growth. Being in California, where his industry thrived, Hardy was naturally a target for local consortia. It was only a matter of time before such interactions occurred.
This development came sooner than expected, likely because of his swift progress and the attractive aspects of his ventures.
After hanging up, Hardy contacted Henry. "Henry, gather detailed information about the California consortium. The more thorough, the better."
"Got it, boss," Henry responded.
Meyer acted quickly. The next day, he called Hardy with news that Mr. Giannini wished to meet as soon as possible. The meeting would be held at Giannini's San Francisco manor. Hardy could visit at his convenience.
"I'll be there tomorrow. I'll officially meet Mr. Giannini at three in the afternoon," Hardy confirmed.
"Understood. I'll inform Mr. Giannini," Meyer replied.
The following day, Hardy boarded his private jet, a B29 bomber converted for personal use. The jet, now without bombing equipment, was fitted with 12 business seats and a separate room with a large bed.
Although the bombing equipment had been removed, Hardy retained the machine guns: twelve 12.7mm M2 machine guns on various sides of the fuselage and a 20mm M2 machine gun on the tail turret.
Only Henry and Andy accompanied Hardy. The San Francisco HD Security Company would handle safety and security upon arrival.
During the flight, Hardy reviewed the information on the California consortium. It reminded him of the ancient principle: "Know yourself and know your enemy, and you will never be defeated in a hundred battles."
The California Consortium, centered around Bank of America, included Safe Pacific Corporation, Crocker Agricultural Group, San Francisco Group, Wells Fargo, Lockheed, Lipton Industries, Northrop Grumman, Philco, Schervania Electronic Equipment, San Francisco Electric Company, PRC Real Estate Development, California Life Insurance Company, California Transportation Company, California Petroleum Company, Los Angeles First Bank, Martin Marietta, Kaiser Motor Company, Kaiser Steel, Kaiser Aluminum, and Chemical Company.
Through cross-shareholding and joint agreements, the consortium's total assets amounted to approximately $8.5 billion.
Unlike pre-WWII family consortia like Rockefeller and Morgan, which were family-centered, the California Consortium was a local alliance. It had benefited from WWII's rapid development and was formed through a more fluid cross-shareholding approach. This made it faster to expand but also potentially more fragile compared to family-centric models.
After reviewing the information, Hardy contemplated the upcoming meeting with Mr. Giannini.
Andy, observing Hardy's deep thought, guessed that Hardy had specific plans for the meeting.
After some time, Hardy looked at Andy. "Andy, if someone offered to buy our property, what would you be willing to let go?"
Andy considered for a moment. "Aside from HD Security, ABC TV, and Hardy Hotel, everything else is negotiable."
Hardy smiled and shook his head. "I think the Hardy Hotel should be replaced by Global Times."
Andy was surprised. "You're willing to let go of the casino business?"
"Businesses focused solely on making money can be let go if a more lucrative opportunity arises. Andy, what do you think we lack the most right now?" Hardy asked.
Andy, with his banking background, answered promptly. "We lack a bank. All major consortia are built around one or more banks, with other industries as pillars. If the Hardy Group had its own bank, it would be like an eagle spreading its wings and soaring."
Having been a banker himself, Andy understood the vital role a bank played in enterprise operations—from investing and stock trading to financial management and inter-company settlements.
"I agree," Hardy said. "I thought a bank was too early to consider, but maybe this is an opportunity."
"What are your plans?" Andy inquired.
"We'll see. It all depends on how Bank of America plans to cooperate. For now, everything is speculative," Hardy replied.
The plane landed smoothly at San Francisco Airport. HD Security's local team awaited their arrival. Hardy, Andy, and Henry were transported to Giannini Manor.
At the manor's entrance, a group of staff greeted them. The butler, looking into the car, said, "Mr. Hardy, Master has been expecting you. Please come in. He is waiting in the lobby."
The convoy entered the manor. Hardy exited the car, and a servant opened the door. Inside, a sprightly elderly man stood in the hall. Hardy greeted him with a smile. "Mr. Giannini, it's a pleasure to meet you. I'm honored to visit."
Hardy had read about the elderly man: 76 years old but still actively leading his family business.
Giannini extended his hand for a handshake. "Although I knew you were only 26, I'm still surprised to see you. In just two years, you've built a remarkable career."
"You're too kind," Hardy responded modestly.
"Let's sit down and talk. What would you like to drink?" Giannini asked with a smile.
"Tea," Hardy replied.
Giannini nodded. "I enjoy tea as well."
They sat down, and their aides stood at a distance, including Andy, who remained seated far away.
"Hardy, I'm very interested in the Las Vegas casinos. It's rare for someone to intervene in the Las Vegas market so freely. I appreciate the opportunity you've provided," Giannini said.
"I believe that collective success fosters growth," Hardy said with a smile.
"That insight is rare. I only realized this at forty. Unity leads to greater profits," Giannini remarked.
"So, what's your opinion on the new casino investment?" Giannini asked.
Hardy paused before replying. "I propose to retain 20% of the shares. If I manage the operation, I would prefer to receive operational dividends. If not, then I'd settle for equity dividends."
Hardy's approach was deliberate and non-confrontational.
Giannini observed him thoughtfully and said, "I believe it's best for you to manage it. You're most familiar with this area. The previous Hardy Hotel was exceptionally well-run. I trust your capabilities."
"If I am to manage it, I have one condition," Hardy said.
"Go ahead."
"During my tenure, I must have full management rights without shareholder restrictions. The agreement can specify terms, but if mismanagement leads to significant losses, the full management rights will be revoked, and shareholders will make decisions," Hardy stated.
Given that the casino investment was not aligned with the consortium's core interests, Hardy wanted to ensure he wasn't subjected to manipulation by shareholders.
Giannini seemed to see through Hardy's young facade and recognized the experienced strategist behind it.
The elderly man nodded. "I agree with your terms, and I'll support them on behalf of Bank of America. Specific shares, dividend ratios, and management shares will be discussed with other partners."
Hardy knew that as long as Giannini agreed, the matter was nearly settled.
Giannini sipped his tea and, after setting down the cup, asked, "Hardy, what are your plans for future industry development?"
Hardy sensed that Giannini's question was more than just a preliminary remark and anticipated further discussion.
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