Exploiting Hollywood 1980.

Chapter 1149 Buying insurance for Orion that may go bankrupt

Speaking of project companies, the seven major Hollywood studios have adopted the method of forming a project company for every large-scale commercial film.This is a means of self-protection by the major studios.

This has two main advantages. The first is that it can introduce investors from all levels. Everyone invests money in an investment entity, and determines the order of sharing according to the amount and time of the resources invested, or receives fixed income in advance. There is a The corporate entity will be easier to liquidate.

The second benefit is that if the movie fails at the box office, you can use the method of company bankruptcy to evade the joint and several liability of the parent company.Of course, this involves many complex legal operations and contracts, as well as the balance of power between investors and the seven major studios. Not every failed movie can completely escape financial responsibility.

Because of this, the legal fees for establishing a project company are relatively high.Many medium-sized companies that are not one of the Big Seven studios would avoid such a costly operation.

What about low-cost production?They don’t have much money anyway. If a movie fails, they will most likely have no money...

Therefore, those who take greater risks and adopt a less strict project company system are medium-sized studios such as Cannon and Orion.Sometimes they want to avoid expensive legal fees, and sometimes the bank mortgage loan requires the parent company to apply for a lower interest rate, so in many cases, they directly participate in the production investment.

The budget for The Silence of the Lambs reached US$1600 million, and the two additional investments before and after Dances with Wolves also increased to US$2200 million. At this scale, it is actually possible to set up a specialized project company without losing money.

Ronald and Orion's Mike Medavoy, who led these two projects, reached a private agreement: Mike Medavoy privately gave Ronald the green light for these two films, established a project company, and improved the details of the agreement to ensure that Ronald's interest in the film should it encounter financial difficulties with its parent company.Ronald promised to give him a share of the pie and clear his way out.

Mike Medavoy is a bit pessimistic about Orion, and he tells the truth that Orion does run the risk of becoming unsustainable.

In the past few years, Orion's movies were neither well-received nor successful. The best in recent years was "Mississippi Burning" the year before last, which won several Oscar nominations, but it did not sell as well as expected at the box office, with only 3400 million US dollars.

Orion's response to this is to increase investment and provide more resources to each famous author and director.

They found John Milius, the screenwriter of "Apocalypse Now", to direct the film, and invested US$1600 million to film "Farewell to the King" in his own style.

This movie tells the story of a World War II U.S. Army deserter who escaped a Japanese firing squad in the Philippines.Hiding in the wilderness of Borneo, he was later rescued by a Dayak tribe of headhunters because his blue eyes were considered sacred.Soon after, he became king of the Dayaks.

When British soldiers approached him about rejoining the war against Japan, the blue-eyed king expressed reluctance.But when his own tribe is threatened by invaders, the king decides to fight for their rights and independence...

A civilized man in a civilized society became a deserter because of cowardice and became a chief among a group of backward primitive tribes. In the end, a British man convinced him...

It is conceivable that such a movie is unlikely to win the love of audiences in America.Each item touches the discomfort of ordinary viewers.In the rebellious society of the 70s, some audiences might be willing to go to the cinema to reflect. Today's audiences won't make themselves uncomfortable in this way.

It's not like John Milius doesn't know how to make movies that audiences love to watch. Conan the Barbarian and Red Dawn are both his works.But he was just not satisfied and wanted to make the kind of movies he wanted to make.Of course Orion complied with his request.

Of course, the 250 million box office still gave this famous screenwriter and director some respect.

Such examples abound on Orion's production lines in the past two years.Another relatively large-budget movie, "Cannonball Run 3".After the original protagonist Burt Reynolds refused to star, they still felt that the script was of high quality and hired Police Academy 4 director Jim Drake to direct, on the grounds that he was good at directing sequels.

But in this kind of old-fashioned comedy series, the main character is often the one to watch.After changing the protagonist, the old-fashioned plot can no longer stimulate the audience's laughter. The production cost of 1800 million yuan resulted in a box office performance of 300 million yuan.To be honest, it would be better to spend more money, cast Burt Reynolds, and continue to star.

Except for the recent "Fireball", which also performed poorly at the box office and has no hope of recovering its costs, Orion's most recent movie with a production cost of more than 1500 million is the just-released "Assassination."

In order to predict Orion's financial situation, Ronald also secretly watched a movie in the cinema.

This is also a very awkward movie. Orion's strategy makes them particularly superstitious about some actors who are good at acting.This movie brings together two great acting male stars, Gene Hackman and Tommy Lee Jones.

The director is Andrew Davis, who previously directed the break-dancing film "Street Dancer", which competes with Ronald's "Break Dance".As a result, because the plot of the movie was too contrary to the audience's aesthetics, this large-scale production with a production cost of 1600 million US dollars (Orion standards) was about to suffer a box office disaster.

The main reason is that the plot is too bizarre. A US military garrison in Germany was sent back to China for trial, but he actually escaped at the airport. In the end, when the General Secretary-General of the Soviet Union visited Washington, he wanted to snipe him.

The plot is that after General Secretary-General Mikhail and the two commanders-in-chief George Sr. and Ronald Sr. signed a strategic arms reduction agreement, the militaries of the two countries were unwilling to end the Cold War, so they joined forces to assassinate the General Secretary. long.In the end, the protagonist, starring Gene Hackman, saw through the truth and stopped all this from happening...

Now that America's economy is strong, its allies are united, and Japan has the money bag and productivity, it has the upper hand over the Eastern camp, and the people simply don't believe this story.If it had been placed in the 70s, when America was at a disadvantage during the Cold War, it might have been a box office success.

"Isn't it good?" Diane didn't go to the cinema. After watching Ronald come back, he recorded something in his notebook, then kept shaking his head, and came up to ask him.

"Hey, the story makes the audience play, it's really not good to watch... But... when those two actors came out, I almost thought that Mr. George and Mr. Mikhail were really guest stars."

The two actors in this movie are really similar, one is named John D'Amico and the other is named Ray Allen.Ronald read the ending subtitles specifically, found the names of the two people, and wrote them down for future use.This kind of actors are usually found specifically for the movie. They may not be real actors, they just look like them.

Sure enough, the film's first-week box office performance was also very poor, earning only $180 million, less than one-third of "When Harry Met Sally," which had been in theaters for seven weeks.

The box office of "When Harry Met Sally" has declined very slowly, and it still has a weekend box office of just over 500 million, ranking fourth.Obviously, this movie has attracted many viewers who have watched it multiple times, going to the theater over and over again to reminisce about the myth of urban romantic love.

Many urban men and women hope that they can have a Harry or Sally to save them when they are single in middle age.

Ronald has no doubt that this movie will also have a group of people who watch it multiple times, something like a 50-time club.

Feeling the super chill that Orion faced this year (four of its four movies failed at the box office), Ronald knew he had to make some arrangements.In the end, his accounting team and Mike Medavoy settled on the principle that if Orion were to be protected from bankruptcy, Ronald would have the right to buy out their investment share and thus inherit the production rights of the film. Follow-up publicity, distribution, and public relations for winning awards.

In this way, the two project companies have become subsidiaries of Orion and Daydream Investment. If Orion is forced to seek Chapter 11 bankruptcy protection, then Ronald will be able to completely inherit all the property rights of the two movies (including overseas distribution and videotape distribution).

A company of the size of Orion has a wide range of targets for film financing. When such a company files for bankruptcy protection, Chapter 11 is generally used.While continuing to operate, negotiate a repayment agreement with your creditors.

For a company that applies for protection under Chapter [-] of the Bankruptcy Law, creditors of debts cannot penetrate the protection of subsidiaries and companies holding shares to pursue debts.

Of course, the court will also look at the specific contracts and industry practices of the investment.Therefore, Ronald also brought in a legal team to make the contract as flawless as possible.Even if Orion's creditors sued for penetrating recovery, there would be a lack of evidence and contractual protection.

The terms for establishing the project company were sent to Orion's senior executives.Their boss, John Kluge, America's new richest man, is not a man willing to delegate power.So this contract still has to be approved by him.

Mike Medavoy assured that with his endorsement, Kluger wouldn't look too far into the details, as is customary.There is a good chance of signing a document sent to him by his secretary. …

"Mr. John Kluge would like to speak with you on the phone..."

Mike Medavoy called Ronald first, but his reassurance had no effect.Klug did not do what he said, but read the terms of the contract sent by Ronald, and then asked to speak to Ronald to confirm before signing.

"Hello, Mr. Kluge, I'm Ronald, Ronald Lee."

Ronald received a call from the richest man's secretary at exactly the appointed time. The German businessman still had a strong sense of time.

"Hello, Ronald. I've seen You's movie and it's very good, so I want to have a phone call with you. The contract is generally fine. When can you make some good-looking and profitable movies? Orion and the others I was always told to pursue art, and it felt like my money was free.”

It turned out that it was just to have a chat with myself, hoping that I would cooperate with Orion more.Ronald felt relieved, it seemed that there was no problem with the contract itself.

"This is a difference in philosophy. I think movies are also a business, no different from selling Coca-Cola or computer software. But some people think that movies are first and foremost a work of art..."

"Ha, if you take charge of Orion, can you guarantee that you will produce a few movies that are as popular as Coca-Cola?" Klug is quite old-school and appreciated what Ronald said.

"There is one difference between movies and cola, that is, they cannot be produced repeatedly. Once you have a good movie, you cannot continue to produce products of the same quality like Coke, which has determined the formula and production process. Generally, you can watch a movie once, and you can watch it several times at most. I’ll get tired of it over and over again.”

"Great insight. If I were still young and hadn't sold the TV station to Rupert, just based on your words, I would have hired you to be the president of my TV network..."

"Mr. Kluge, you are too polite. I am just a director and don't know anything about running a business..."

Ronald respects the richest man very much, but he doesn't like this old-fashioned business style.This is not the era of Hollywood studios. It is hard to say who makes more money between a medium-sized studio owner and a blockbuster commercial film director.

Besides, I didn’t even agree to Sony Oga-san’s invitation.

"Well, young people always have their own ideas, so I will treat this matter as a business partner. Your contract needs to modify some terms..."

Okay, here it comes.Ronald felt that old-school businessmen also had their shortcomings. They were tough and direct. "What do you think needs to be modified?"

"Business clauses need to be reciprocal. Your lawyer is not that good. Why are there only clauses against Orion Pictures but not against your Daydream Pictures?"

"This..." Ronald didn't expect the richest man to have opinions on this.

Kluger's request was that Ronald give him a reciprocal condition.If Daydream Pictures goes bankrupt during the filming and distribution period, Orion will also have the right of first refusal to acquire all the rights to the entire film and allow Daydream to exit gracefully.

All Ronald wanted to do was to insure Orion that if he went bankrupt, he would automatically buy the entire movie.Ultimately, Ronald felt, Orion was going bankrupt.

But Klug in turn wants the same treatment, that is to say, he thinks Ronald is going bankrupt?

Ronald didn't know where he got this weird idea, am I broke?I won’t go bankrupt even if you go bankrupt.He was confident enough in himself that he agreed, "No problem. Although this is unlikely to happen, I can agree to the terms... Let our lawyers negotiate new documents."

"very good……"

Klug hung up the phone and shook his head.Young people today are very confident.

But Ronald may not succeed in getting what he wants.The senior executives at Orion are right about one thing. If I wanted to, I could completely make up for the loss of the movie.As long as they can make some best-selling movies like Coca-Cola from time to time.

"Mr. Richest Man is very interesting. He seems to think that Orion can still be saved..." Ronald put down the phone and said to Richard who was involved in the matter.

"It's not surprising that the movie that also changed from Dangerous Liaisons, Valmont, is the movie that Orion turned into. Milos Forman is a two-time Oscar winner for Best Director, and from what I've heard, this movie is indeed It was shot much better than the Dangerous Liaisons released by Warner Bros.”

"Dangerous Liaisons", in which Michelle Pfeiffer and John Malkovich had an affair, was rushed out. The costumes, makeup, props and scenery were all rushed, using Hollywood traditions that have nothing to do with the aristocracy of the country.

Moreover, the budget was only 1400 million U.S. dollars, and the box office was just over 3000 million U.S. dollars. With the public relations for the Oscars, Warner Bros. barely managed to break even.

This "Valmont" was meticulously crafted. The two films were shot at about the same time, and Milos Forman didn't edit it until today.

Someone within CAA has seen the edited samples, and it is said that both Annette Bening, who plays the evil noblewoman, and Meg Tilly, who plays the pure lady, are as good as Michelle Pfeiffer and Glenn Gross. 's role is much better.

Colin Firth, who plays Count Valmont, looks much more like a playboy than John Malkovich, who looks like a buffoon.

The total budget of this "Valmont" is US$3400 million, which is also super expensive among Orion-led movies.

It can be seen how much hope Orion has placed on this. As long as this one can sell well, the losses of the previous four movies can be made up.

Ronald nodded, he was also a prepared insurance company.

"But, Richard, there's one thing I don't understand..."

"What?" Richard asked.

"Where did Klug come from that I was going to go bankrupt?"

(End of this chapter)