Chapter 583: Chapter 584: Count You Brave


    ?


    [Chapter 584: Count You Brave]


    Even though Berkshire Hathaway, owned by Warren Buffett, and Tom Murphy''s Metromedia didn''t have absolute control over ABC, the fact that the twopanies held close to 40% of the shares meant that it would be quite easy for Buffett to convince the board after he came to a private agreement with Firefly Films.


    However, ABC was not entirely united. While Buffett''s stance was firm, it didn''t mean that other major shareholders at ABC were uninterested in reaching a deal with Firefly, especially considering that Firefly had been turning huge profits ever since its inception. In fact, towards the end ofst year, during Buffett''s private discussions with Firefly, some shareholders openly expressed dissatisfaction with Buffett''s secretive negotiation tactics.


    After Firefly released its financial report for 1993, many investment firms holding shares in ABC became more eager to facilitate the transaction. After all, some benefits appeared to be easy to calcte. With Firefly''s profitability, even if ABC''s original shareholders only retained a 30% stake in the mergedpany, as long as Firefly''s profitability didn''t drastically change, the annual profit dividends for shareholders would be nearly the same as they received while holding ABC shares. In addition, they could acquire a significant amount of cash through this equity transaction for other investments.


    Following Firefly''s open invitation for acquisition talks after negotiations with Buffett fell through, the ABC board swiftly passed a resolution to initiate formal negotiations with Firefly.


    ...


    On February 10, after receiving an official reply from ABC, Jeffrey Katzenberg and Firefly''s lead attorney, Edward Lewis, led the acquisition team to New York tomence formal acquisition discussions.


    Unlike the straightforward equity and debt situation at Firefly, ABC''s circumstances were moreplex. Chris had facilitated the involvement of a Morgan Stanley team as consultants.


    In the initial acquisition of Disney, both parties had enjoyed a very pleasant coboration. Although Firefly had changed dramatically since that time, thepany''s extensive administrative resources meant that it wouldn''t have to fully rely on Morgan Stanley. Nheless, Morgan Stanley remained enthusiastic, and the entire Wall Street could see that this was a deliberate effort to curry favor with Firefly.


    After negotiations, Firefly nned to implement arge-scale debt financing program for the acquisition, and that was a primary business for investment banks, providing significant profitspared to asional mergers and acquisitions.


    Eric didn''t head to New York with Katzenberg but stayed in touch by phone every day tomunicate negotiation updates.


    Before Katzenberg left New York, the higher-ups at Firefly had already discussed the acquisition''s bottom line in detail. After several discussions, Eric authorized Katzenberg to offer a maximum of 25% of Firefly''s shares, with the cash portion being flexible up to $10 billion.


    That figure wasn''t arbitrary, considering that both Firefly and ABC were performing quite well. Hence, no one doubted that their merger would have a synergistic effect. Under the best performance expectations, once they merged, Firefly''s profits could potentially reach $2 billion in the following years. Thus, the shareholding returns of shareholders holding 25% stakes would beparable to the annual earnings from ABC shares at that time. This made the figure rtively easy for ABC to ept.


    Of course, no one could predict the future, except perhaps Eric. The merged Firefly could either experience an explosion in revenue and profits or, under the burden of heavy debt from a $10 billion acquisition, spiral into ruin.


    Eric remained optimistic about the deal. Although in the original timeline Disney faced years of poor performance after acquiring ABC, the main reason was Michael Eisner''s management issues. After Eisner left, Disney quickly revitalized, soaring ahead of rivals like Time Warner and News Corp in scale and profitability. This all proved that the acquisition was correct. As for the heavy debt burden post-merger, Eric wasn''t concerned. Thete 1990s would be a period of rapid economic growth in the United States, with all sectors, including entertainment, seeing substantial increases. Moreover, with Eric''syout in the technology sector, even if Firefly encountered trouble, he could easily raise enough funds through various channels to resolve any crisis. Besides, he felt the likelihood of such issues arising was low.


    ...


    Sincest year, Eric had repeatedly requested to expand Firefly''s 3D animation division. However, during this era, 3D animation technology was just emerging. Other than Pixar, there weren''t any sizable 3D animationpanies in North America or even worldwide, forcing Eric to adopt an internal training mechanism. Alongside expanding Pixar, Disney''s traditional hand-drawn animation department had stopped hiring and started training traditional animators and gradually began transitioning towardsputer animation.n/o/vel/b//in dot c//om


    While keeping close contact with Katzenberg in New York, Eric had primarily focused his energy on his animation divisions. To that end, he personally led a coborative meeting between Pixar and Disney''s animation departments.


    Disney''s animation department hadpleted The Lion King and had begun preliminary promotions. Besides The Lion King, there were several other animated sequel projects, including ddin 2. Due to the longer production cycle of hand-drawn animationpared to 3D animation, these projects had already been confirmed before Firefly acquired Disney. However, Eric had stopped approving new hand-drawn animation film projects and had been quite clear that if Disney''s existing traditional animators were unwilling to undergo training forputer animation, once their current projects werepleted, they would only be left to work on low-budget projects for Disney Channel.


    Most of the traditional animators at Disney were rtively young, and possessing highly skilled drawing abilities,pleting training forputer animation software shouldn''t be too difficult. To prevent a bacsh from the hundreds of traditional animators, Eric promised to give them ample time to learn and adapt, covering all costs associated with their training.


    ...


    The Pixar staff attending the meeting gradually exited the Disney animation studio headquarters in Burbank. John Lasseter, who walked alongside Eric at the front, said, "Eric, although no one openly opposed the decision, I feel a lot of people in the studio are still very resistant to this change. You might encounter some trouble."


    Eric was fully aware of this; Disney''s animation studio had over 700 traditional animators. While more than 70% were around 30 years old, there were still some who were veterans from the Walt Disney era. These individuals would find it nearly impossible to adapt to the new animation production methods, and with that, being phased out was almost inevitable. In this context, no one would stand idly by. The reason there hadn''t been any opposing voices earlier wasrgely due to the overwhelming advantages exhibited by Pixar''s 3D animation. Also, Eric''s sudden announcement left many unprepared, prompting no one to act as the ''early bird'' without preparation.


    "They all understand the advantages of 3D animation over hand-drawn animation. Both Toy Story and A Bug''s Life have proven this, so this transition is inevitable," Eric said while walking with John Lasseter. "If they can''t make this shift, Firefly will have no choice but toy them off. I''ve done all I can to give them about two years'' worth of traditional animation projects to work on. They have a good amount of time. If they really getid off, they surely won''t be left without an option, as many TV channels need traditional animators for children''s animated


    shows."


    Having worked at Disney for a long time, Lasseter sighed inwardly at Eric''s words. But he knew first-hand how ruthless capital could be. Although Eric was not a harsh boss, he wasn''t a phnthropist either. Achieving such a bnce was not easy. Otherpanies might have simply announcedyoffs without granting employees such a generous time to adjust.


    ...


    It was still early. Due to their busy work schedules, Lasseter and others didn''t n to stay overnight in Los Angeles. Eric arranged for a private Firefly corporate jet to return the group


    to San Francisco.


    Eric initially intended to personally drive John Lasseter and others to Santa Monica Airport. However, as they entered the parking lot, he noticed Elisabeth, wearing sunsses, stepping out of a red BMW and waving him over.


    "Eric, I think we need to head to Santa Monica ourselves," Lasseter said with a smile, noticing Elisabeth''s graceful figure, causing others to chuckle.


    Once Elisabeth approached, Eric made the introductions. Seeing her hesitating to speak, he decided against driving Lasseter and the others. Thankfully, they were not overly concerned about the details. They bid farewell to Eric and got into their cars.


    After everyone left, Eric walked with Elisabeth to her red BMW. He yfully knocked on the hood and asked, "New car?"


    Elisabeth put her sunsses back on and raised her chin teasingly, "I bought it six months ago. In your world, where you never care about others, calling it ''new'' isn''t wrong." Seeing no one around, Eric reached out and pinched Elisabeth''s chin, grinning, "Don''t you think if you need something from me, you should keep your ''little ws'' to yourself?" Elisabeth dramatically swatted Eric''s hand away, replying confidently, "We alreadypleted the acquisition of Miramax."


    With work near the day''s end, Eric didn''t want to be the center of attention, so he opened the car door and got into the red BMW, inhaling the faint scent of perfume in the cabin. He asked Elisabeth, who climbed in behind him, "Oh, how much did it cost?"


    Elisabeth started the car and slowly pulled out of the parking lot, stating, "$100 million for 90% of Miramax''s shares, the Weinstein brothers retain 10% and continue to manage Miramax''s operations."


    "That''s a bit pricey, but letting the Weinsteins keep some shares is a smart move. Otherwise,


    if they left, Miramax wouldn''t hold much value." Elisabeth replied, "If they both leave Miramax, thepany''s value would diminish anyway. With News Corp backing us, those profit-driven brothers won''t leave easily."


    Eric added, "The Weinsteins had enough of funding shortfalls in the past few years. Initially, they''d certainly cooperate well with 20th Century Fox, but everyone has ambitions. Once you can no longer amodate these brothers'' ambitions, things will fall apart." Elisabeth, who was personally involved in negotiating the Miramax acquisition, knew exactly what kind of people the Weinsteins were: "If ites to that, we can let them go. Fox can''t let


    them take the lead."


    As Eric watched Elisabeth turn onto the freeway, he remembered to ask, "Where are you


    taking me?"


    Elisabeth responded nonchntly, "The higher-ups have decided to let the Weinsteins


    personally oversee the production of Braveheart, which was your original idea, so we''re all


    going out for dinner to discuss it."


    Eric felt taken aback by Elisabeth''s assertive tone, hesitantly asking, "Isn''t Fireflypeting with Fox? Am I supporting the enemy by doing this?"


    "It counts!" Elisabeth nodded emphatically. "If you don''t want to, that woman named Sophie


    Marceau can just leave."


    "Alright, I''ll concede that you''re tough."


    "Hum..."


    The meeting took ce at a fancy French restaurant in Beverly Hills. Upon Eric''s arrival, the Weinstein brothers weed him warmly, while Mel Gibson appeared rather aloof. Eric sensed that either he was lost in sess or justcked social skills. However, Mel Gibson''s agent, Ed Limato, was exceptionally cordial.


    Eric recalled that Limato had been Mel Gibson''s manager since the early ''80s, remaining with


    him for over twenty years until his passing. Ed Limato was twenty years older than Mel


    Gibson, and their rtionship was as close as father and son. However, he couldn''t quite recall Ed Limato''s exact date of death. If Limato''s passing coincided with Mel Gibson''s career decline, it would mirror Tom Cruise''s situation. It also served as a reminder of how crucial a


    good manager could be.


    *****


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