Corporate mergers and acquisitions, especially at the conglomerate level, are highly complex and involve early financial and legal feasibility assessments, detailed acquisition negotiations after the launch, and audits of corporate assets and debts. Such processes usually take months or even a year or two to fully complete.
Following Sony's merger with Columbia Pictures at the end of last year, Panasonic began contacting Michael Ovitz, also aiming to acquire a major Hollywood film company. Despite a more than 30% fall in the Japanese stock market over the past six months, Panasonic, with its significant cash reserves in dollars, did not abandon its acquisition plans.
To maintain secrecy, Ovitz frequently traveled between Tokyo and Los Angeles with his team, even prohibiting staff from disclosing their travel plans to family. One of his deputies had to claim a kimono he brought back from Tokyo for his wife was purchased in London. Despite such precautions, the news still leaked.
At CAA's headquarters in Century City, Michael Ovitz had spent the previous day coordinating with Panasonic, finding plausible excuses, contacting the media, aligning his team's statements, and finalizing a plan to deny the report published by the Los Angeles Times. After personally reviewing the press release late into the night, he was back at his office before eight o'clock the next morning.
After a routine senior management meeting and discussing the day's media responses and strategies with the acquisition team, it was already half-past nine. Back in his office, Ovitz was going through his day's schedule when he asked his assistant to confirm the arrangements for his lunch with Dustin Hoffman.
Last year, under pressure from Simon Westeros, Ovitz had ostensibly terminated contracts with Hoffman and others, but he had continued to help them maintain their careers for free, significantly mitigating the negative impact of the termination on CAA.
Hoffman's involvement in "Captain Hook," as well as Semel and Guber's personal advocacy, were the results of Ovitz's behind-the-scenes efforts.
However, of the four people terminated last year, only three had managed to recover their careers. Westeros had used Meg Ryan as an example to deter others from breaching long-term contracts, and Ovitz had been unable to help her.
After discussing the lunch plans, just as Ovitz was about to start his other work, his assistant handed him the box office report from the past weekend, suggesting, "Mr. Ovitz, you might want to look at this."
Ovitz took the box office report, dismissed his assistant, and looked down, his face quickly showing surprise.
The past weekend had seen mediocre box office performances from the new releases "Presumed Innocent" and "The Jungle Book." Even though "Total Recall" dropped by 41% compared to the previous week, it still easily took the top spot with $15.06 million in revenue.
In ten days, "Total Recall" had crossed the $50 million mark, reaching $51.14 million.
What Ovitz hadn't expected was the second name on the list, "Ghost."
Entering its second week, "Ghost," a Daenerys Entertainment summer opener that had not met expectations in its first week, did not experience the significant drop seen in "Total Recall" but instead saw a slight uptick.
Compared to its opening three-day weekend revenue of $12.19 million, "Ghost" took in $12.52 million in its second weekend, an increase of 2.7%.
A 2.7% increase might seem trivial, but Ovitz understood how difficult it was for a movie with average critical reception to achieve this.
"Ghost" had done it.
Again.
Last year, "The Sixth Sense" had naturally seen an increase in its second week due to explosive critical acclaim and high public interest.
Now, what was happening with "Ghost"? This was probably the question on everyone's mind in Hollywood that morning.
A seemingly insignificant uptick had significantly altered the box office trajectory for "Ghost," a film many media outlets had predicted would only reach $60 million domestically. It was now almost certain to hit the $100 million club.
It might even surpass "Total Recall."
This was truly unexpected.
As a result, the media and other Hollywood studios began to pay attention to why this was happening.
The plot of "Ghost" moved many viewers to tears…
The soundtrack resonated with many…
Once again, the word-of-mouth effect was at play…
In short.
The audience liked the movie!
That was the most important and direct reason, something many filmmakers strive for but rarely achieve.
The media rushed to report on the viewing phenomena of "Ghost," and Hollywood began eagerly searching for similar creative sparks. Many remembered their initial skepticism about "Ghost" and couldn't help but feel a resigned admiration for Daenerys Entertainment, a sense of "your uncle is still your uncle" helplessness.
On Sunday, as Daenerys Entertainment's top executives discussed potential responses to Panasonic's
early bid for MCA and CAA's public denial in the media, Simon's focus returned to his other business concerns.
Though CAA publicly denied the reports, MCA's stock price still surged, hitting a high of $52 the following Monday. Clearly, many investors had begun to move in.
If Daenerys Entertainment had no plans to acquire MCA, Cersei Capital could have started accumulating shares now, potentially earning a significant profit once Panasonic completed the acquisition.
However, they had to pass on this opportunity.
Strictly speaking, as long as no one took it too seriously, this wouldn't necessarily be considered insider trading. But Cersei Capital was already too conspicuous, and Simon believed that engaging in such actions would undoubtedly lead to scrutiny.
Over in Silicon Valley.
Due to an unexpected surge in subscribers in May, America Online management predicted that the number of users accessing the internet through their services could reach 500,000 by the end of the year.
Furthermore, other internet service providers outside America Online's service areas had begun contacting Ygritte Company, which held core patents for the World Wide Web.
With the base of network users across the United States built up over the years, if they all switched to the World Wide Web, the number of users nationwide by the end of the year would undoubtedly exceed 500,000.
Thus, both America Online and Ygritte began planning to expand their data centers and network infrastructure.
Ygritte's existing data centers on the East and West Coasts could only support 400,000 concurrent users. This time, they planned to build two more data centers, each capable of supporting 300,000 users, allowing for up to one million concurrent users.
America Online focused on expanding its basic network infrastructure.
While constructing a nationwide network transmission channel would require an investment of over a billion dollars, just investing in the main fiber-optic networks on the East and West Coasts was within America Online's financial capabilities. Simon had no immediate plans for further funding or dilution of other shareholders' equity. If necessary, America Online's next phase of financing would involve loans.
As for the internet cafes, after confirming the model and operational plan, 100 internet cafes were expected to open by the end of July.
America Online held a 60% stake in the 'Internet Bar' subsidiary, and each cafe's base cost exceeded $100,000. However, America Online only needed to invest $3.5 million itself, with the rest covered by sponsors and an investment fund under IBM.
At Daenerys City in Malibu.
It was June 13th, a Wednesday.
"Ghost" had unexpectedly hit big at the box office. Although it had fallen nearly $3 million short of "Total Recall" in its opening weekend, by the weekdays, "Ghost" had surpassed "Total Recall" in daily box office receipts due to increasing media attention and audience acclaim.
Yet Simon did not relax.
The first of Daenerys Entertainment's ten-film plan, "Sleeping with the Enemy," was set to premiere on June 15th. However, several internal screenings attended by media professionals had given the film poor reviews, and audience screenings had not generated impressive feedback either.
Daenerys Entertainment's ten-film plan was highly anticipated by both Hollywood and the public.
Now, with Daenerys's solo project "Ghost" showing signs of becoming a blockbuster, if the collaborative project "Sleeping with the Enemy" failed at the box office, it wouldn't just dampen public anticipation for the subsequent films in the plan; other studios might also start to rethink their strategies.
Simon had no way to control audience reactions to a film.
However, having tied many Hollywood studios to the ten-film plan, manipulating the media to ensure a passable reception for "Sleeping with the Enemy" wasn't a big issue.
As the new week began, Simon started contacting media connections accumulated by Daenerys Entertainment over the years, also urging Fox and other participants in the ten-film plan to exert their influence. Everyone understood that a poor start for "Sleeping with the Enemy" would affect the other films in the plan, which had already created a brand effect in the audience's mind.
In the executive conference room on the top floor of Building One in the administrative district of Daenerys City, teams from Daenerys Entertainment and Fox were discussing this matter, with Simon, Amy Pascal, and Fox's Joe Roth participating.
After busy preparations, Fox's distribution team, with the help of Daenerys Entertainment and other Hollywood contacts, had managed to secure favorable editorial directions from major North American newspapers like the Los Angeles Times, the New York Times, the Chicago Tribune, and the San Francisco Chronicle.
Industry publications like The Hollywood Reporter and Variety also agreed to provide relatively lenient reviews.
Beyond influential media platforms, the team had contacted well-known critics like Roger Ebert, who had also agreed to cooperate.
Overall, while excessively high reviews might not be forthcoming, achieving an average score above 6 was definitely within reach.
Simon wasn't worried
about this manipulation of film reviews leaking out, as it was essentially a form of public relations—a practice not new to Hollywood. Although still relatively new to Hollywood politics, Simon knew such tactics should not be overused.
Thus, before "Sleeping with the Enemy," Daenerys Entertainment's other productions had not engaged in similar PR efforts.
An occasional intervention, as long as it wasn't too frequent, was something newspapers and critics were generally willing to accommodate for a Hollywood giant.
Even if it came to light, since it didn't involve actual financial transactions and was more about forming an understanding over coffee or phone calls, it was unlikely to cause much uproar.
With influential media platforms like the Los Angeles Times and the New York Times handled, "Sleeping with the Enemy" was assured a reasonable reception.
Amid these busy undertakings, another week quickly passed.
From June 8th to June 14th.
Arnold Schwarzenegger's "Total Recall," with a 41% drop in weekly box office, collected $21.32 million, maintaining its position at the top of the weekly box office chart, with a total of $57.4 million over two weeks.
However, compared to "Ghost," whose reputation and popularity were on the rise, "Total Recall's" advantage was diminishing.
In its second week, "Ghost" saw a 4% uptick in its weekly gross, earning $20.55 million, closing the gap with "Total Recall" to less than $1 million. In two weeks, "Ghost" had accumulated $40.31 million.
In response to "Ghost's" unexpected box office performance, Daenerys Entertainment swiftly increased the number of screens for the film's third week to 1,866, up from 1,521 at its opening—an addition of over 300 screens, ensuring the film's third week would likely not see a significant drop.
The other two new releases:
Harrison Ford's "Presumed Innocent" ranked third in its opening week, earning $11.71 million, unfortunately not breaking $10,000 per theater.
"Back to the Future Part III," in its third week, earned another $10.84 million, bringing its total to $52.72 million.
Disney's re-release of "The Jungle Book" ranked fifth, bringing in $7.7 million in its first week.
Beyond the top five, "Firebirds," which opened alongside "Back to the Future Part III," plummeted in its third week to $1.78 million, bringing its three-week total to just $12.01 million. It was expected that most screens would be withdrawn after the next week, with final earnings likely hovering around $15 million, leaving Paramount unable to recoup even its promotional costs through North American box office alone.
On June 15th, the new week saw two new films hit North American theaters: Fox and Daenerys Entertainment's collaborative project "Sleeping with the Enemy," and Disney's comic book adaptation "Dick Tracy" starring Warren Beatty and Madonna.
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