[Chapter 603: Sell Me the Rights]
In the original timeline, Victoria's Secret once dominated over 40% of the U.S. lingerie market, generating an annual net profit of $1 billion. For a traditional industry with relatively low market entry barriers, this achievement was almost miraculous. Compared to such massive profits, the annual cost of producing the Victoria's Secret Fashion Show, which ran into tens of millions, seemed insignificant.
However, Emily wasn't immediately swayed by Eric's grand proposals. She calculated simply and said, "According to what you said, if we want to create a sensational effect, this annual show would likely require an investment of around $15 to $20 million. That's enough money for the company to run ads on television for an entire year. I have just managed to stabilize the company; if we suddenly launch such a risky marketing plan, it will definitely provoke strong opposition from other shareholders and management."
Eric thought for a moment and replied, "How about this: LTD transfers the rights for the Victoria's Secret Fashion Show to Firefly, and I'll cover all the production costs. You would only need to assist from the sidelines. If the show doesn't achieve the results I mentioned, Firefly will bear all losses. If it is successful, then LTD will need to pay Firefly a licensing fee to continue producing the program."
From his memory, he recalled that the Victoria's Secret Fashion Show had an annual viewership of about ten million people. Although it only aired once a year, the ad revenue generated on ABC, subsequent cable rights, and tape distribution could allow Firefly to recoup all costs. Securing the rights now meant that if the show succeeded, LTD would be unlikely to abandon such a significant promotional vehicle for Victoria's Secret, and the annual licensing fees would bring in revenue for Firefly.
Emily quickly grasped the key point and responded, "So, if the show is successful, LTD will have to pay Firefly to continue producing it each year?"
"Of course," Eric nodded. Seeing Emily frown slightly, he chuckled, "Risk and opportunity have always gone hand in hand. If LTD isn't willing to bear the risk, then Firefly cannot go drop a huge amount of money without reaping any benefits, right? But rest assured, to me, Firefly and LTD are just like my left and right hand. I won't take advantage of you."
Emily hesitated but still didn't agree immediately. She said, "I'll call a high-level meeting tomorrow and get back to you."
"No problem, I'll be in New York for the next few days. You can reach me anytime."
Just as Emily was about to leave, she suddenly stopped and asked, "If we opt to finance the production ourselves, what would the cooperation plan look like from your side?"
Eric replied, "We can operate it like a TV movie collaboration. LTD would be the investor and producer, while Firefly would handle the distribution through television and tape channels. Both parties would agree on a suitable profit-sharing ratio."
...
The lively birthday party lasted until ten o'clock in the evening. Since many guests had to work the next day, they began to leave one after another.
Eric personally arranged for Virginia's brother's family to stay at another estate in East Hampton. Upon returning to their seaside estate, he found that all the guests had departed, leaving only a few maids tidying up outside the villa.
As he stepped into the villa's hall, Eric saw two identical tall figures bustling about, putting dishes away in the kitchen. Virginia sat on the sofa, still excitedly chatting with Kevin, who had finally opened up, in a language understood only by mother and child. Joanna quietly held a book, sitting beside Virginia, while Ewa flipped through TV channels with the remote.
After greeting the two women, Eric glanced at the twins picking up the pace and asked, "Where are Drew and Elia?"
Joanna looked up and replied, "In Elia's room, I think. Drew said she wanted to put Elia to bed herself."
"You trust Drew quite a bit," Eric chuckled as he sat down beside Joanna, resting his chin on her shoulder, inhaling her light scent, and glanced at the Russian book she was reading. "What are you reading? You can still speak Russian?"
"Anna Karenina," Joanna replied, moving closer to Eric. "When I was in school, we had mandatory Russian classes. It wasn't that hard. I learned it gradually."
Eric nodded, recalling that during Joanna's school days, Poland was still part of the Soviet sphere, so it wasn't surprising she had to learn Russian.
He sent Ewa and the twins to rest. After chatting amiably with the two women for a while, it was already eleven o'clock, and just as he prepared to head to bed, he realized he hadn't seen Drew around: "You two go upstairs; I'll go check if the girl is asleep in Elia's room."
...
Both baby rooms were on the first floor. Stepping into his daughter's room, Eric found Drew leaning awkwardly against Elia's crib, engrossed in a book. Upon noticing Eric, she quickly put the book down.
At first, Eric didn't notice Drew's unusual demeanor. Seeing that his daughter seemed awake, he bent down beside the crib intending to say a few comforting words when he suddenly noticed the tearful and sad expression on Elia's face. When she spotted her father, she immediately reached out to him crying "Daddy!"
Eric hurriedly picked her up, shot an annoyed glance at Drew, who had started to stick her tongue out, and then he recalled the earlier scene. He reached for the book Drew had seemingly hidden behind her, and was surprised to see that it was Stephen King's horror novel, Carrie.
Amused, he tossed the book aside, then gently tugged at the girl's ear.
"Hey, that hurts! Joan said Elia likes to listen to stories before bedtime. I was just reading to her, and she might not have even understood. I only read a few pages!"
Eric increased his grip slightly and laughed, "You almost scared her to tears, and you think she wouldn't understand? Did your mom read Carrie to you when you were little?"
"No one read to me! I was taken to shoot ads when I was just six months old. No one celebrated my birthday, or read me bedtime stories, or gave me a nice single room. Boo hoo, I'm a neglected and unloved child with no childhood. Boo hoo, I'm so pitiful...."
Though Eric knew she was likely just pretending, he still felt a twinge of sympathy as he relaxed his grip. He watched as she instantly ceased her fake crying and clung to him like a koala. Eric helplessly patted her back, saying, "From now on, don't read horror stories to Elia; you'll scare her."
"Okay, okay...."
Virginia, having soothed her son to sleep, walked over after hearing the commotion and leaned against the doorframe, grinning as she watched Drew snuggling against Eric. She asked, "What are you two up to?"
Drew showed no shyness and remained clingy to Eric. He could only hand Elia over to Virginia with a laugh. "You can calm the little one; I'll handle the big one."
"Ha ha," Virginia chuckled as she took Elia. Once the frightening noises subsided, and with time well past midnight, Elia quickly dozed off on Virginia's shoulder.
With his hands now free, Eric patted the little girl clinging to him. "Alright, let go of me; it's time for bed."
"Carry me to my room!"
Eric scooped her up, playfully bouncing her and laughing, "You seem a lot heavier now; I can't lift you."
"I'm not! I'm still under 100 pounds. Feel for yourself!"
Virginia gently placed Elia in her crib, checked the baby monitor, then smiled at the two snuggling together, saying, "Elia is asleep now, so you two don't make a fuss here."
Eric could only helplessly scoop the little girl up, and amidst her triumphant giggles, he headed out.
...
The next afternoon, Emily called Eric in a huff. She first berated the LTD board as a bunch of 'short-sighted fools,' then indicated that LTD ultimately chose the second option Eric proposed and decided to sell the rights for the Victoria's Secret Fashion Show to Firefly. Eric later heard from Chris that Emily had argued fiercely with the LTD board over it.
LTD had essentially been seized by Chris through hostile takeover tactics from shareholders like Leslie Wexner, and while Leslie Wexner had left, many of the shareholders and management who favored him were still employed at the company. These people were the backbone of LTD, and as long as their decisions wouldn't cause turmoil, Emily couldn't just dismiss them all.
However, Eric believed that once the Victoria's Secret Fashion Show launched, and with the brand's value rising, Emily's position would be solidified, allowing them to fully take control of the company.
Now that LTD had made its choice, the negotiation didn't take long. Three days later, amidst his busy schedule, Eric found a few hours to sign the cooperation agreement with the team formed by LTD and Firefly. He then handed over a draft plan he had managed to prepare to kick off the early preparations.
...
On the ABC side, after signing the merger agreement, by late April, both parties completed the stock exchanges and merger processes, and on April 26, the newly formed Firefly Group held its first shareholders' meeting.
Even though Eric still held over 70% of the stock and had absolute control over Firefly, the consolidation led to dozens of new shareholders, making the formation of a board of directors inevitable.
Eric had initially planned to establish a five-member miniature board, but Warren Buffett, Tom Murphy, and other small shareholders from the former ABC insisted on at least three board seats. Given the shareholding proportions, Eric reluctantly expanded the board to the more common 11-member structure used by large companies in North America.
The original ABC shareholders included Warren Buffett of Berkshire, current ABC CEO Tom Murphy, and David West, president of State Street Global Advisors, who supported the merger. Aside from Eric, who was the undisputed chair of the board, most of the other board members were senior executives from Firefly.
Though the group unanimously suggested Eric hire a few independent directors to provide a more detached perspective on Firefly's decision-making, federal law did not require private companies to have independent directors, and Eric did not want Firefly's internal operations exposed to unrelated parties. Thus, he declined this suggestion.
...
With the board established, the next step was adjusting the management and streamlining the departments.
Michael Lynne's contract was about to expire. Originally, Firefly only needed to pay a nominal compensation to have Michael pass the CEO position to Katzenberg, retaining only a board seat. However, with the summer blockbuster season approaching, and given that Katzenberg had previously focused on the ABC merger, the film's primary distribution responsibilities for Firefly's summer blockbusters fell on Michael Lynne and Jeffrey. Due to the upcoming ABC downsizing, Katzenberg couldn't shift his attention back to film. To ensure the blockbuster releases went smoothly, Michael Lynne's contract not only needed to be extended but also pushed to September. Thankfully, both sides reached an understanding, meaning no disputes were necessary, and a simple amendment to the contract sufficed.
...
At ABC, after the merger, Tom Murphy and the 69-year-old CEO originally planned to retire and enjoy their golden years. However, to avoid any turbulence similar to the 1980s mergers, Tom Murphy agreed to remain CEO of ABC until the end of next year. Fortunately, Eric didn't need to dig deep into ABC to find a suitable next CEO: Robert Iger. After all, Robert Iger's capabilities had been proven in Eric's previous life. After several in-depth discussions with Robert, and having secured the approval of people like Tom Murphy, this choice was confirmed internally at ABC.
...
Jeffrey, who had just celebrated his sixtieth birthday last year, planned to step down as the company president. Feeling grateful for the challenging experiences while producing films with his wife, he intended to manage a small farm in Maryland after leaving. Meanwhile, he wanted to use his annual dividends from Firefly's stock to set up a film fund to help young directors realize their cinematic dreams. Although Eric believed Jeffrey was likely to waste significant money, the old man clearly cared little about money. Chris supported his father's actions, so Eric refrained from commenting further.
...
The final adjustment confirmed that when Tom Murphy and Michael Lynne eventually retired, Katzenberg would become CEO of Firefly Group, responsible for the overall operations and growth of the group. Robert Iger would serve as president of Firefly Group and CEO of ABC, responsible for all ABC matters. Frank Wells would take on the role of president of Firefly Group and CEO of Disney, handling all subsidiary Disney affairs. The three would form a triumvirate for Firefly Group, and the respective heads of the various departments under Firefly would be adjusted accordingly.
Although Eric served as the board chair, his main focus remained on Firefly's film production. Unless Katzenberg and others made decisions that were entirely contrary to the film industry's future trends for the next decade, Eric did not intend to interfere with the company's daily operations.
*****
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