Chapter 3 - Chapter 3: Startup Capital

With Ronan included, Sahai Entertainment now had only four employees left. Mary temporarily managed the company's daily operations and finances, while Robert Lee from the marketing department and George Clint from the publicity department had nothing to do for the time being.

Ronan's next plan required manpower, at the very least, he needed to keep these three people stable.

Salaries had to be paid on time; after all, the purpose of working was to earn money. Phrases like "I'll create a broad development platform for you" were only used to deceive fresh graduates.

Apart from salaries, people also needed to see some hope. More precisely, they needed to stay busy; idleness bred all sorts of wild ideas.

"George, you've worked in the media industry and are an expert in publicity. You have a good network in the media," Roger called for a company-wide meeting in the office. "Manage your relationships with them; we'll need the media for our next steps."

George Clint, in his thirties but looking much older, furrowed his brows. His face was lined like that of a sixty-year-old man. "Mr. Anderson..."

"Ronan! Call me Ronan," Ronan appeared very approachable.

"Are we launching a new film project?" George Clint asked.

Mary and Robert Lee also looked concerned.

Ronan nodded. "Yes. We're initiating a new project to save ourselves."

Surprise flashed across the faces of the three. Sensing someone about to ask, Ronan preempted, "I'll handle the funding. Starting from February, your salaries will be increased by ten percent, and I guarantee they will be paid on time."

The reassurance had some effect, calming the three down a bit.

Ronan then turned to the forty-year-old curly-haired man. "Robert, do you know about the Abu Dhabi Investment Authority?"

"They've just set up an office in Los Angeles, mainly to evaluate investment projects," Robert answered.

"Just to evaluate?" Ronan noticed Robert nodding and thought for a moment before saying, "You go make contact with the office, find out their impression of Hollywood. Also, gather some information about Abu Dhabi, such as investments and cultural environment."

Robert Lee pondered for a moment and said, "I have a friend who often does business with Arabs; I can ask him to make contact." He seemed to guess Ronan's intentions. "Are you planning to seek investment from Arabs?"

Ronan nodded. "I have a classmate from Abu Dhabi at USC. I've been in touch with him these past couple of days. Arab oil tycoons are very wealthy and are waving their checks around the world, looking for investments."

George Clint interjected, "Can we attract Arabs to invest in the company? For film investment... Ronan, we just messed up a project."

Ronan shook his head. "Directly having Arab funds invest in the company might put us under tremendous pressure."

The three immediately understood the implications. There was an exceptionally powerful force in Hollywood that didn't tolerate Arab influence.

Ronan continued, "We need to prioritize the film project. A single film project isn't as sensitive." They needed manpower for the plan, so he first fooled these three onto the ship. "You three are the old guard of Sahai. You didn't abandon Sahai in difficult times, nor did you abandon me, Ronan Anderson. I am very grateful for that."

"No need to say that, Ronan," Mary interjected. "It's only right."

Ronan understood the importance of team cohesion. After expressing his sentiments, he talked about the practical matters, promising earnestly, "If we can secure investment this time, each of you will receive one percent of the total amount as a reward."

The plans ahead required their execution. These three were industry veterans.

Robert Lee and George Clint glanced at each other. The latter asked, "Ronan, how much funding are you planning to raise?"

"My target for now is Arab tycoons," Ronan said lightly. "Raising a few million dollars shouldn't be a problem."

There were backup options like Indian investors.

These three had stayed with the company until now; they must have some emotional attachment to Sahai Entertainment. Combined with the lure of money, their spirits were somewhat lifted.

As soon as the impromptu meeting ended, Ronan rushed to the Los Angeles branch of PepsiCo with Mary.

In the office, Robert Lee said to George Clint, "Ronan seems different."

"Yeah," George Clint sighed. "It's normal to change after experiencing a painful failure."

"Hope he doesn't mess up this time," Robert Lee lacked confidence in Ronan.

But George Clint said, "Hollywood has always risen from failures. Ronan has talent; what he lacks is experience."

Some things simply couldn't be said to Robert. He had been considering resigning recently, but for now, he would see how things unfolded. What if they could secure investment? Those Arabs who made a fortune

 from oil supposedly didn't care much about money.

Ronan and Mary arrived at the Los Angeles branch of PepsiCo in Century City and met with Anthony, the copyright buyer, in a meeting room.

PepsiCo was the largest video tape chain company in the United States, mainly engaged in video tape production, sales, and leasing. In the early 1990s, it was acquired by Viacom, under Sumner Redstone, and showed signs of monopolizing the video tape market.

The reception Ronan received from Anthony, a very ordinary copyright buyer, was less than enthusiastic towards Sahai Entertainment.

Small production companies like Sahai were a dime a dozen in Hollywood.

"$200,000 for the copyright fee is absolutely impossible!" Anthony's voice was calm but carried a hint of arrogance. "Terminal Rush' performed miserably at the box office and isn't worth that much."

Of course, Ronan knew he had set the price too high, but he tried to negotiate nonetheless. "Terminal Rush' is a unique action film, blending the bloody elements of B movies, a genre that has always been a favorite in the video tape market. Besides, there are many precedents of films that flopped at the box office but succeeded tremendously in the video tape market, like The Shawshank Redemption,' which has been doing very well in the rental market in recent years."

Anthony, with a hint of disdain, said, "That film still hasn't recouped its costs. Maybe it'll turn a profit in five years, but isn't time a cost?"

Ronan directly asked, "How much are you offering?"

Anthony replied coldly, "Eighty thousand dollars."

"That's impossible!" Ronan feigned disbelief. "The production cost of Terminal Rush' was $6 million!"

In reality, this was a normal offer. In most cases, the basic transfer fee for a film's video tape rights was between ten to twenty percent of the North American box office.

The hotter the movie at the box office, the higher the copyright fee, plus sales or rental royalties.

Sahai Entertainment was an old client of Anthony's, but when it came to commercial interests, it didn't matter.

Especially when Sahai Entertainment was on the verge of bankruptcy.

Anthony shrugged, with a hint of disdain in his tone, "Just a reminder, Terminal Rush' only made $800,000 at the North American box office."

A flop like this movie couldn't give Ronan any confidence at all.

But $80,000 was indeed too little.

Ronan continued, "Besides the standard set by industry associations, Sahai Entertainment won't ask for any back-end shares."

Anthony furrowed his brows, thinking. Just as B movies were an important category in the video tape industry, bloody action films had a certain market in video tape rentals.

"A one-time buyout!" he raised his eyebrows. "Including TV rights."

Ronan deliberately gritted his teeth. "I want $300,000!"

Anthony burst into laughter, full of mockery in his smile. "Young man, Sahai Entertainment is on the verge of bankruptcy. You can't get a high price from any company."

"Sahai Entertainment hasn't gone bankrupt yet," Ronan replied nonchalantly.

Anthony shrugged, as if hearing a joke, and said directly, "One hundred and fifty thousand dollars! A one-time buyout for video tape and TV rights! Let's not waste each other's time."

Ronan pondered for a moment and slowly said, "Alright, $150,000." He emphasized, "You need to pay the full amount at the time of signing the copyright transfer agreement."

Anthony didn't care. "Sure."

After the negotiation, both parties drafted an agreement, but the formal signing would have to wait until it was approved by PepsiCo.

As Mary put it, there would hardly be any surprises in such a small deal worth tens of thousands of dollars.

For PepsiCo, a giant corporation, this was as small a deal as it could get.

Leaving the PepsiCo branch, Ronan glanced back at the signboard. The attitude of the PepsiCo buyer had left him feeling frustrated, but he had no way to vent. Not to mention the fact that Sahai Entertainment was facing bankruptcy; even at its peak, they were not regarded highly by people from PepsiCo.

The wealth and status of the two sides were simply not comparable.

Ronan became even more determined to implement his plan.

At this moment, Mary asked, "Is this money for startup capital?"

Ronan smiled and said, "Without this operating funds, how can we attract investment?"

Mary reminded him, "According to the contract we signed with the distributor, New Line Cinema, they are entitled to fifteen percent of the copyright transfer fee."

Ronan had read the contract and naturally knew this. After some thought, he said, "Follow the proper procedures to notify New Line Cinema and delay the payment as much as possible."

Mary nodded. "Delaying for two months should be fine."

Ronan sighed. The distributor was at the top of the Hollywood food chain.

Distributors not only took a cut from the box office but also generally took a percentage of peripheral copyright income, ranging from ten to forty percent.

"You have the script ready?" Mary asked with concern.

Ronan nodded. "It's ready."

With startup capital now available, he needed to present a compelling project, and the foundation of that project was the script.