[Chapter 837: Going Against the Grain]
In addition to providing a detailed comparison of the financial data of Firefly Group, Time Warner, and Viacom, Forbes also drew parallels using examples from the three telecom giants to prove their point.
In 1996, AT&T, the leading powerhouse in the American telecommunications industry, reported annual revenues exceeding $74 billion. In contrast, its closest competitors, Verizon and Sprint, racked up a combined total of only $30 billion, which was less than half of AT&T's revenue. While Firefly's revenue figures didn't show as stark a difference from Time Warner and Viacom as AT&T's figures did from Verizon and Sprint, the trend was clear.
Moreover, in terms of industry layout, Firefly shared many similarities with AT&T. AT&T was itself a diversified telecommunications giant, encompassing industries such as landline phones, mobile communications, cable television, communication software, and electronic products. If one were to compare a single business segment, AT&T might lead, but not by a wide margin over its competitors. However, when viewed as a whole, AT&T's strength far surpassed that of Verizon and Sprint among their industry peers. Currently, Firefly Group reflected a similar situation: while it maintained a slim lead over its rivals in sectors like television and entertainment, the combined force of its various ventures showcased an oligopolistic presence in the media landscape.
...
Eric sat in the restaurant, patiently reading through all the articles about himself and Firefly in this issue of Forbes. When he finally looked up, over half an hour had slipped by.
Christina remained quietly seated across from him. She had finished her breakfast and was observing him with curiosity.
Taking a glance at his watch, Eric smiled at Christina and said, "You've got that training today, right? I'll have the driver take you to Burbank."
Though Eric appeared relaxed, Christina couldn't forget the look on his face when he had been reading Forbes. She had a knack for picking up on people's emotions, and even if she didn't quite understand his reaction, she knew he was preoccupied. She nodded obediently, cleared her dishes, and left the restaurant with him.
Once outside the villa, they found the car waiting at the entrance. After giving the driver a few instructions, Eric kissed Christina on the cheek and sent her off.
He hurried back inside the restaurant, finished his breakfast, and took another car to Firefly's headquarters in Burbank. On the way, he called his assistant Kelly to take note of this issue of Forbes.
The articles published in Forbes would undoubtedly spark lively discussions among the media in the coming weeks. Having been in the industry for years, Eric understood just how significantly media perception could influence businesses, so he knew he had to prepare for potential fallout.
Since it was Monday, Eric decided to personally attend the weekly executive meeting at headquarters. Most of the time, Kelly represented him and would later prepare the minutes for him to review.
...
Recently, the company had primarily focused on the global distribution of Titanic. However, the spring television lineup had all premiered on the major channels under Firefly. Robert Iger, the head of television operations based in New York, discussed viewership ratings for shows launched on platforms like ABC, A&E, and the Disney Channel via video call. ABC and the Disney Channel had stable and rising ratings, with the fall breakout hit Everybody Loves Raymond returning after a winter break and surpassing 22 million viewers at its peak.
A&E's Lifetime channel, driven by flagship series like Sex and the City, Project Runway, and America's Next Top Model, continued to roll out new quality content and captured the female audience. Compared to the earlier ratings of under a million in prime time, under Annie Sweeney's excellent management, Lifetime's offerings were now averaging 3.5 million weekly during primetime, with core series' ratings smashing through the cable network record to reach 8 million -- making Lifetime one of the fastest-rising stars among cable channels in the U.S. in recent years.
As the final agenda point touched on Firefly's summer film releases and promotional activities, the meeting extended until eleven o'clock.
...
The executives present were well-connected and could not avoid mentioning the fresh issue of Forbes as they exited. They offered Eric congratulations earnestly or in jest. Naturally, some were quick to caution him about potential impacts the magazine's articles could have on Firefly Group.
As people filtered out, Jeffrey Katzenberg and Frank Wells remained, intuitively, and joined Eric in a nearby conference room.
Once the secretary served coffee, Katzenberg dismissed her and said, "Eric, I called Steve Forbes this morning. They shouldn't have used the term 'oligarchs,' but we couldn't anticipate this situation."
It was clear Katzenberg understood the potential repercussions of Forbes' article on Firefly Group's portrayal as "the rise of media oligarchs." From the angry look on his face, Eric speculated that Katzenberg's conversation with the Forbes head honcho had not been pleasant, and a confrontation was quite possible.
In this country, even the president gets dragged through the mud by the media from time to time. Though Firefly Group wielded significant influence in the media sector, it clearly couldn't control every narrative spun about it.
Taking a sip of his coffee, Katzenberg, without waiting for Eric or Frank Wells to speak, added, "This afternoon, I'll mention to Robert to cut the ad budget across all media platforms owned by Forbes for this summer. They can't just create a spectacle for attention like this."
It was apparent Katzenberg really had had an intense argument with Steve Forbes that morning.
Eric smiled and shook his head, about to speak when Frank Wells interjected, "Jeffrey, if you go through with this, we really become the media oligarchs Forbes described. I don't think the situation is that dire. It's better not to escalate things."
Frank had always played the role of the "good cop" within the group, earning Katzenberg's respect. Upon hearing Frank's words, Katzenberg calmed down, realizing his thoughts were too aggressive and personal. He nodded slightly and turned back to Eric.
"Although we don't need to sever ties completely, we should still show our stance. Let Robert handle that," Eric concluded before asking Frank, "Frank, do you think we might face any substantial legal risks?"
Frank, originally a lawyer, pondered before answering, "The group's continued expansion doesn't pose immediate risks. After all, we're still far from the real industry oligarchs like ExxonMobil, General Electric, or AT&T. However, if in the coming years we expand into other fields -- like you've mentioned, cable operations -- we would face very stringent antitrust scrutiny, and the chance of setbacks would be high."
Eric had discussed this issue with the management team a couple of years prior. The decline of public television networks in North America and the rise of cable channels was a natural trend in the television industry. To maintain a competitive edge in this landscape, they needed not only to continue producing high-quality content but also to ensure they had distribution resources. Without a dedicated cable platform, Firefly's television operations could easily be undermined. While federal law did not prohibit media groups from owning cable channels, Firefly's dominant position would certainly attract antitrust concerns.
"Regardless, that's an issue for a few years down the line," Eric summarized his thoughts. "For now, let's focus on the challenges at hand."
Frank Wells nodded, "Our film and television ventures shouldn't encounter any legal hurdles, but there might be issues in Digital Domain. A few months ago, when we announced halting external partnerships, there were calls for the Justice Department to investigate. If Forbes stirs things up too much, several people could bring those discussions back to light."
"So, what we need to do is prevent the term 'oligarch' from being exploited, ideally shifting media attention away from the company," Katzenberg suggested, glancing at Eric. "Eric, I have a proposal worth considering."
Eric nodded, signaling him to continue.
"My suggestion is to shift more media focus onto you."
Eric spread his hands. "If that's effective, I'm all for it, but do you really believe any topic involving me could overshadow corporate matters?"
"That's why we'll need to create a focal point artificially," Katzenberg suggested, tapping on a copy of Forbes lying on the table. "The reported $98.7 billion is $60 billion more than the second richest, Bill Gates. That's a hard pill for many to swallow. Before Forbes released their issue, I saw plenty of media questioning the legitimacy of your fortune. Now might be the perfect opportunity to stir that controversy and redirect media and public attention."
Frank Wells chimed in, lightly tapping the table in agreement, "Eric, that's an excellent strategy."
After some deliberation, Eric agreed that this strategy was indeed viable. The $98.7 billion statistic from Forbes would draw significant attention but could also elicit skepticism, given people's reluctance to believe in miracles.
...
The trio discussed the details of the plan, and afterward, Eric called Kelly back to go over it. After lunch, Katzenberg and Frank returned to their tasks while Eric personally oversaw the implementation of their agreed strategy.
During that era, it was nearly impossible to find large-scale astroturfing to manipulate public perception. However, Katzenberg's observation during their discussion served as a wake-up call for Eric. With Forbes releasing a figure far exceeding the estimates of other financial media outlets, it was clear that those who had expressed skepticism before would be even more vocal now.
Eric's goal was to amplify their voices in the media as much as possible.
The efficiency in the assistant's office was impressive. Just after two o'clock, Kelly handed Eric a list of 45 names. All of these were well-known financial journalists or commentators who had published skeptical articles about Eric's wealth recently.
Looking through the folder, Kelly quietly explained, "We reviewed around 300 different newspapers and magazines. This group holds the most significant influence. If they manage to unify their voices in the media over the next period, it'll create considerable impact and encourage other media platforms to follow suit. Additionally, we've identified suitable outlets under News Corp, Hearst, and Conde Nast for potential articles, but you may need to reach out to them personally for their cooperation. I've already spoken with Tina at Yahoo, and she'll request related coverage from our list this afternoon."
After previewing the profiles, Eric pulled up a contact list on his computer. As he dialed, he joked with Kelly, "I wonder how those skeptics will react if they realize they've been played as pawns in this game."
Kelly chuckled softly, remaining quiet as Eric connected the call.
On the other side of the desk, Eric casually leaned back in his chair with a pencil in hand and propped his legs up on the table. A cheerful voice came through the receiver. "Hey, William, it's me, Eric. How've you been? ... Haha, really? Oh, you're at San Simeon? I've been wanting to check that place out forever, but you've never invited me! ... Not this time, too busy, but you can come to L.A."
After casual chit-chat with William Hearst III, Eric jumped into the topic once William inquired. "It's just a small request. I'm hoping you could line up a few feature pieces over the next week in your daily newspapers."
With A&E and ESPN jointly held by Hearst, the connection between Hearst Group and Firefly had always been robust. Eric briefly explained his intentions, and Hearst quickly agreed. As the head of the world's largest newspaper group, William was no stranger to Eric's motives. He even threw in a playful jibe during the call.
After noting a higher executive's number that William provided, Eric hung up and dialed Rupert Murdoch's private number. While greeting Elisabeth worked just as well, direct contact with Murdoch often yielded faster results.
After making several calls, Eric finally sat up straighter and handed Kelly the list filled with contacts. "Here, reach out to these people. You can discuss specifics directly with them; they'll be cooperative."
*****
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