[Chapter 642: The Farce]
As August had just begun, Eric found himself feigning negotiations with Peter Schneider while the topic of Firefly closing its hand-drawn animation department, which had cooled off after a heated discussion at the end of June, suddenly reignited in fervent debate.
News stories began to surface, claiming "Eric Williams in heated conflict with executives of Disney's animation department," "Disney animation staff express dissatisfaction and threaten mass walkout," and "The Lion King may mark the end of Disney's 2D animation."
The anticipated total profit of The Lion King was expected to surpass $1 billion, a staggering return on an investment of under $50 million, achieving an astonishing 2000% return rate that far exceeded the profit margins of other live-action films released during the summer. Consequently, if Firefly were a publicly traded company, even with several blockbuster films supporting the summer box office, the stock price would undoubtedly suffer a significant drop due to concerns over the potential fragmentation of Disney's animation department.
Under this powerful media onslaught, all observers quickly grasped the notion that Firefly was on the verge of losing Disney's hand-drawn animation department. Institutions and media outlets closely monitoring the situation speculated on which other forces might be pressuring Firefly Group in this manner.
To them, it appeared that Firefly would never easily relinquish Disney's animation department in the face of The Lion King's massive profits. Yet, at the same time, Disney's animation department couldn't possibly exert such broad media influence. After all, Disney Animation was a subsidiary of Firefly Group's subsidiary, and the media resources it originally commanded were mostly controlled by its parent company, making it impossible for them to stir such a tempest on their own.
Moreover, compared to the overwhelming media pressure closing in like a dark cloud, Firefly Group's responses to the series of news stories seemed somewhat inadequate. Most analysts concluded that Firefly would be forced to yield to Disney's animation department.
...
On the second Monday of August, Ron Perelman, the chairman of MacAndrews & Forbes based in Manhattan, New York, publicly issued a statement as a creditor of Firefly Studios. He, alongside 27 other long-term bondholders, expressed concerns about internal turmoil caused by a series of poor decisions made by Firefly's board and management. To protect the creditors' interests, Ron Perelman openly sought to join the Firefly board as a creditor, hoping to participate in the group's decision-making processes. He warned that if the Firefly board rejected this request, he would seek arbitration from the Federal Securities and Exchange Commission.
Shortly after, Peter Schneider in Los Angeles and Roy Disney, an important member of the Disney family, issued statements on behalf of all Disney animation employees. They expressed strong disappointment over Firefly's series of strategic decisions while welcoming the involvement of Firefly's creditors in the group's operations, urging shareholders to consider this matter seriously.
To avoid leaks about the situation, it was noted that the total bonds held by Ron Perelman and his 27 creditors amounted to $3.6 billion, less than half of Firefly's total bonds.
Once Ron Perelman made his statement, all media outlets and institutions closely monitoring the storm of the early August news cycle suddenly grasped the situation at hand. In his press conference, Ron Perelman also called upon other Firefly creditors to unite. However, as some bondholders were still weighing the pros and cons, Peter Schneider and Roy Disney's declarations of support prompted them to quickly align with Ron Perelman's side.
...
"It only took three days to form a creditors' alliance; that's remarkably quick. I'm just a little curious about how a total of 77 creditor agencies plan to divide those two board seats they're pursuing," Eric remarked sarcastically as he looked over the latest documents in a Firefly meeting.
Katzenberg glanced at the directors, including Buffett, then said, "Eric, I think you're complicating this matter unnecessarily. We shouldn't have to deal with such a media crisis. Even though we're a private company, antagonizing our creditors could have significant negative impacts on Firefly's future financing."
"Isn't that what everyone thinks?" Eric glanced around the room, chuckling. "Actually, I'm doing this to make others see what's about to unfold as a form of retaliation. I want Marvel Entertainment more urgently than you all can imagine. Now, I have no reason to hide that objective, and soon everyone will realize that instigating this farce, which won't truly impact Firefly, is absolutely worthwhile."
While Marvel Entertainment was a public company, its shareholder structure was similar to MGM's, with most shares held by Ron Perelman's MacAndrews & Forbes Holdings Group. Acquiring Marvel through public channels was impossible; the only way was to initiate a public takeover bid. If another company attempted this, Ron Perelman would surely dump the burden of that debt-ridden, consistently loss-making venture. In the original timeline, even Michael Jackson nearly became a potential buyer for Marvel.
However, Firefly's situation was entirely different. Their current performance was so outstanding that if they publicly initiated a takeover offer, it would clearly signal to others that they were eyeing certain character copyrights from Marvel, inviting competition, the outcome of which could be easily anticipated.
It was evident that while competitors could drive up the purchase price for Marvel, a savvy businessman like Ron Perelman wouldn't miss such an opportunity. Once he determined Firefly's determination to acquire Marvel, he would undoubtedly seize the chance to inflate his demands. At that point, Firefly might welcome another major shareholder with a significant stake -- something no company would want to face given Marvel's troubled assets.
Inspired by Ron Perelman's attempt to join Firefly's board as a creditor, Eric spent over a month secretly strategizing, ensuring that the leverage they had acquired would compel Ron Perelman to part with Marvel, with no other recourse available.
"Since no one has any objections," Eric concluded his earlier remarks, noticing silence in the meeting room, "let's start discussing how to bring this farce to an end."
*****
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