The news that Disney's animation department was successfully auctioned at a sky-high price of 2.5 billion US dollars once again caused a lot of media reports.
After the two parties successfully signed the contract, Summer Redstone announced the establishment of Paramount Animation while the iron was hot, and appointed Roger Ailes, the director of "The Lion King", as the CEO of Paramount Animation. At the same time, Viacom also announced that it will rely on the huge channels of Blockbuster chain stores and content departments such as Paramount Animation, Paramount Movies, and MTV TV to jointly enter the lucrative film and television peripheral industry.
On the second day after Roger Ailes received the employment contract of the CEO of Paramount Animation, he held a press conference again, announcing the sequel of "The Lion King", "Pocahontas", "Mulan" brought by Disney The three 2D animation projects started at the same time, which is quite aimed at the old club Disney.
The continuous good news in a short period of time directly pushed up Viacom's stock price by 7.6%. The soaring stock price made Viacom shareholders who were quite critical of Redstone's aggressive expansion strategy change their minds. They all praised Lei Shidong for his wisdom and decisiveness.
Some people are happy and some are frustrated. The most unlucky one is undoubtedly Time Warner CEO Terry Semel, who lost to Redstone in the bidding process for the Disney animation department.
Although companies such as Seagram and 20th Century Fox, which failed in the competition, were more or less discussed by the media, the tone of the media's comments on Time Warner's defeat in this competition was almost ridiculed. After all, the overall strength of Time Warner Group is more than twice that of Viacom, and Time Warner's previous sluggish performance in the film business has given it every reason to grab Disney's animation department. Therefore, the impact of this failure on Time Warner is even greater than the failure itself. Many media even doubt whether Time Warner has a financial crisis.
On the day of the auction, Firefly suddenly announced the means of extending the payment period, which disrupted Time Warner's internal bidding strategy after careful consideration. Although Terry Semel is the leader of Time Warner, he has far more authority in Time Warner Group. Much lower than the previous generation leader Steve Ross, which also made it impossible for him to change his strategy flexibly due to the sudden attack of the fireflies, which eventually caused Time Warner's failure in this bidding.
Although the ultimate reason for this failure is the constraints of Time Warner shareholders and the board of directors on Terry Semel. But it is clear that the shareholders and directors of Time Warner will definitely not take the initiative to take responsibility, and the scapegoat was finally held on Terry Semel.
Time Warner's stock price has been falling for several months due to the dismal box office of the summer season, and with the failure of this auction. Time Warner's hope of entering the field of animated films was shattered. The negative impact of this incident caused Time Warner's stock price, which had stopped falling because of the summer vacation, to start to fall again.
Faced with increasing pressure and busy work, Terry Semel even had some thoughts of quitting. Of course, this thought is only fleeting. Not to mention the rich salary brought by the position of CEO of Time Warner, no one will give up the power brought by the position of the helm of a large media group. Therefore, Terry Semel can only be painful and addicted to find a solution to his current predicament.
Of course, as a seller, although the Firefly Group received a huge cash of 2.5 billion U.S. dollars because of this business, the media's attitude towards Firefly did not show much congratulations.
Most media generally believe that the auction price of 2.5 billion US dollars for the Disney animation department is still far below its actual value, and there is no need to pay attention to what will happen in the future. The "Lion King" that is still in theaters can prove this point. "The Lion King" three Net profit of US$1 billion is expected within the year. It means that Firefly will bring more than US$300 million in net income per year on average. According to the common law that the company’s market value is usually more than 10 times its annual profit, the media believes that the actual value of Disney’s animation department should definitely exceed US$3 billion.
Compared with Terry Semel, who was desperately needed to accept interviews from major media in person in order to reverse the recent decline of Time Warner, Firefly only held a routine press conference when signing with Paramount, and then did not speak to him again. No response to media remarks. This also reflects the benefits of non-listed companies, not having to bear the pressure from the media and capital because of factors such as stock prices and financial reports.
Moreover, although the firefly group abandoned the Disney animation department in the media, there have been negative voices on Disneyland, Disney stores and other businesses. But in fact, the internal development rhythm of Firefly Group is very clear.
After spinning off the hand-drawn animation department. Katzenberg immediately began the rebuilding of Disney's animation division.
Although most of the best digital animators are concentrated in Pixar, in recent years, there have been a lot of advertising design companies and special effects studios using computer graphics technology. With the training of professional and technical personnel, it can be said that it is easy to restart the Disney animation department in a short period of time. Firefly Software and Pixar Studios can also provide a full set of mature animation technology and some management talents for the new Disney animation department.
Under the personal control of Katzenberg, who once led the revival of the Disney animation department, if all goes well, the new Disney animation department will be able to launch the first work within three years, so the rhythm of Disney's animation release will only be in 2019. There was a brief break in 1996, and then it was able to restore the best production status of Pixar and Disney alternately producing works.
The continuous divestiture of two businesses, the sale of paper media assets and the hand-painted animation department, has made Firefly Group's cash reserves skyrocket again. However, Eric has no intention of rushing to expand again.
Although the process of merging ABC was very smooth, there was no violent shock. But at this time, the Firefly Group is like a huge media machine that has just been combined. This media machine has just realized the most basic operation, and there is still a long way to go before reaching the highest operating efficiency. Many problems need to be solved. If these are completely ignored and the next step of expansion is impatient, then there are only two final results. One is that the group expands too fast and becomes more and more bloated, and internal problems accumulate, eventually causing the entire business to collapse , fell into operational and financial crisis, and the other is Time Warner, which is superficially strong but full of internal contradictions. In the end, it is still inevitable to decline.
Eric hopes that the various departments of the Firefly Group will be reorganized and coordinated, and finally reach a perfect state that can run smoothly even if they encounter high-level iterations like Time Warner.
So, while rebuilding Disney's animation division. In order to further connect the two major business sectors of film and television, Firefly Group is also constantly making business adjustments to ABC TV Network, Disney Channel, ESPN, Marvel Entertainment and other departments.
Internal business adjustments often do not need to consume too much capital, and the operating cash flow within the Firefly Group is fully sufficient to cope with these adjustments.
In the case that Firefly's various businesses still maintain strong profitability and have just brought in huge funds through the divestiture of two parts of assets, a huge cash surplus has emerged within the group. Firefly temporarily chose to extend the payment period when it auctioned off the Disney unit, which also had considerations for this reason. Because there is too much income in a short period of time, if you can't put it into business, you have to pay taxes!
If faced with this situation before, Eric's first reaction was often to choose to pay off Firefly's debt.
But after several years of experience, Eric's original conservative business philosophy has gradually changed, and he has gradually accepted the state of corporate debt management. Although Firefly's current debt has reached 10 billion US dollars, the debt ratio is only about 30%. For For most group companies, this debt ratio is very healthy. And it also helps to use debt interest for tax avoidance.
In addition, although early repayment of debts can save some interest expenses for Firefly, even if all 10 billion U.S. dollars of debts are repaid in the short term, the debt interest that Firefly can save is only about 5 billion U.S. dollars. Within the ten-year long-term debt period, with Eric's rebirth advantage, there is absolutely no problem in multiplying the 10 billion US dollars several times, so. The choice between paying off debt and investing is almost a no-brainer.
With abundant cash support, although the internal expansion of Firefly has temporarily stopped, Eric has accelerated the pace of investment in the high-tech fields he is familiar with. We are about to enter the second half of the 1990s when the high-tech industry was rising. This is also the best chance to get in.
In order to support the technology research and development of Yahoo Advertising Alliance and Yahoo Technology Alliance, Eric injected another 200 million US dollars in development funds to Yahoo.
The US$200 million debt financing promised to AOL was also transferred to the other party's account at one time.
At the same time, according to the original angel fund plan for the rapid promotion of the Yahoo Advertising Alliance, Eric began to accelerate the injection of funds for those websites with good development potential.
However, these investments still only occupy a small part of Firefly Group's financial reserves. Of course, Eric will not blindly increase investment to be taken advantage of, so. Leaving nearly US$1 billion in cash after dividends from other shareholders has also become a more distressing thing for Eric.
"It's really a happy distress," said Eric, sitting in the office of Firefly Studios more than a week after the auction of the Disney animation department, looking at the latest group financial statement.
Kelly, who had just pushed open the office door and walked in, gave Eric a slight stare, came across to Eric, handed a schedule to Eric, and said quickly: "A Gulfstream commercial plane has been contacted. Airliner, the Victoria's Secret team will be able to fly to New York tomorrow morning, and Miss Brighton has arranged a press conference there. In addition, the set of the Armory on Lexington Avenue in Manhattan has been arranged according to the drawings you gave, just you The camera remote control slider mentioned is still being customized, and it may take another week. And for the headset recorder..." At this point, Kelly paused, and said: "I really don't know you have so many strange ideas, but , Motorola said they are willing to customize for free, but they need to print a prominent Motorola logo on the device."
Eric nodded: "This is no problem, but they also have to hand over the equipment within a week before coming back."
"Of course, I have told them," Kelly nodded, and said, "This is about Victoria's Secret. In addition, Mr. Katzenberg's assistant just called, and he will go to New York tomorrow."
Eric, who was flipping through a document, raised his head: "What is he doing?"
Kelly did not tease Eric this time, and explained: "Tomorrow is the 19th, Monday, "Survivor" premiered on Tuesday, and Mr. Katzenberg should hope to see the ratings of "Survivor" as soon as possible." News, if... something happens, it will be convenient to make adjustments as soon as possible."
Eric nodded suddenly. He just remembered that "Emergency Room Stories" and "Friends" were broadcast on September 28 and September 29, but he ignored that the premiere date of "Survivor" was a week earlier.
After the trial broadcast, ABC has not worried too much about the ratings of "Story in the Emergency Room" and "Friends", but for "Survivor", a very novel reality show, although this program is Eric I personally picked it, but many people still have doubts. Moreover, because of the special format of the program, "Survivor" cannot arrange a pilot episode. Katzenberg wants to sit in the ABC headquarters in New York in person, and it is not surprising that he can make immediate adjustments to the possible consequences of this program.
Eric is not too worried about the program "Survivor". After all, this program has already proved its popularity in the previous life. Even after the program was launched more than ten years ago, various types of similar Follow the reality show. However, Eric has no intention of interfering with Katzenberg's decision.
Seeing that Eric didn't say anything, Kelly handed over a thick document: "This is the information you asked me to collect. The products developed by this radio communication technology company completely deviate from the mainstream GSM format. I didn't read it. There is no need to invest, unless you are confident that their communication system can completely replace GSM, but I think this is unlikely. The first generation of analog signal transmission was used for more than 20 years before it was eliminated by GSM Even if this new communication format has more advantages than GSM, I don't think it can replace GSM in a short time. After all, all mainstream communication technology companies and mobile device manufacturers in the world now use It is the GSM standard, and has invested a lot of research and development funds, and these world-class electronics giants are unlikely to allow the technological achievements they have just obtained to be replaced by other technologies." (To be continued.)