[Chapter 903: Roller Coaster]
As Richard Lovett had anticipated, MGM's stock price plummeted by 6.8% throughout the day on Tuesday, following the news of Pierce Brosnan's replacement. With no remedial measures taken by MGM, its market capitalization had dropped from a peak of $12.3 billion to $11.5 billion by the day's close.
Early Wednesday morning, as major North American newspapers speculated whether MGM's stock would plummet again, a reporter stationed at MGM's Century City headquarters suddenly broke major news. Around 9:20 AM local time, Pierce Brosnan, the actor who portrayed James Bond, made a surprise appearance at Century City, flanked by a crowd of aides and security, quickly entering the MGM headquarters building. Corresponding photos almost immediately appeared on Yahoo's homepage.
In this situation, even a fool could guess that there had been a significant turnaround regarding Brosnan's replacement.
While MGM still had not released any public announcements, shares of MGM, which had started to dip again on the East Coast at the New York Stock Exchange, suddenly skyrocketed. Within just half an hour, MGM's market capitalization soared back to $12 billion.
Then, at 10 AM, MGM finally issued another announcement through Yahoo, but the content was unrelated to the highly anticipated spy movie universe. The statement declared that to alleviate tight cash flow and minimize investment risks, MGM had decided to transfer the production rights to The Lord of the Rings trilogy to Firefly Group, retaining only the global theatrical distribution rights for the trilogy.
As soon as the news broke, MGM's sharply rising stock price suddenly stalled and briefly dipped.
Rumors had persisted over the past two years that MGM was set to produce The Lord of the Rings trilogy in one go. Recently, there had been increasing indications within the industry that the project had entered a substantial stage of preparation. Terms like "rookie director,"three hundred million budget,"unknown cast," and "huge risks" often appeared in media analyses concerning the entire project.
Many media outlets also speculated that if Eric Williams, who controlled MGM behind the scenes, truly believed in this project, he would make sure that Firefly Group became involved in the investment. However, if Firefly did not participate at all, then this project was likely a gamble that even Eric wouldn't fully endorse.
Thus, the unexpected announcement caught everyone off guard.
Firefly chose not to co-produce The Lord of the Rings trilogy but instead took nearly the entire project. The so-called global theatrical distribution rights that MGM retained ultimately equated to a mere 15% share of the global box office for The Lord of the Rings franchise. The later profits from home video/DVD releases, television broadcast rights, and merchandise revenues would clearly no longer involve MGM in any significant manner.
Until the final resolution, even the most well-informed media could not untangle the various power struggles occurring within MGM in recent days. However, that did not stop them from speculating about the implications of this announcement.
Soon, the boldest and most serious speculation surfaced, quickly trending on Yahoo's hot topics: MGM had parted ways with Williams!
After MGM announced Brosnan's replacement yesterday, insider information leaked quickly, revealing that it was Eric Williams himself who made that decision. Subsequently, MGM's stock price fell 6.8% for the day, prompting MGM's European shareholders' spokesperson, Pierre Truc, to rush from New York to Los Angeles to meet with MGM management.
Following this line of thought, MGM's European shareholders could hardly tolerate the negative impact Brosnan's replacement had on MGM's stock. While outsiders speculated that Drew Barrymore, who held the largest share percentage in MGM, was just a puppet for Eric Williams, there was ultimately no substantial evidence to support this. Eric Williams's stake in MGM was only indirectly controlled through LTD Group, which held 8.4% of MGM's shares.
If Drew Barrymore and the higher management at MGM were dissatisfied with Eric Williams's decision, supported by Pierre Truc representing the European shareholders, it was not beyond possibility for the major shareholders to unite against Williams and completely free themselves from his control.
Then, this morning, when Brosnan re-entered MGM's headquarters, the company dropped the risky venture of The Lord of the Rings trilogy, signaling a potential divergence from Eric Williams's intentions.
As this speculation unfolded, it seemed entirely reasonable that MGM and Eric Williams had indeed severed ties.
Due to the speculation surrounding MGM's transfer of The Lord of the Rings trilogy, the stock price fluctuated wildly and remained highly unstable for the next hour.
As the core of the spy movie universe, Pierce Brosnan was undoubtedly important, which was evident from MGM's significant stock plunge yesterday.
However, if MGM's investors had to choose between Eric Williams and Pierce Brosnan, most would likely not hesitate much.
Everyone knew that the recent revival of MGM had been entirely due to the efforts of Eric Williams alone. The projects that had brought MGM substantial profits in recent years -- including the spy movie universe series, the Night at the Museum series, and the Resident Evil series -- were all primarily orchestrated by Eric.
While these projects might have reached stable profitability, even slightly rational investors would not consider Eric Williams to be unimportant.
After all, despite its recent revival, MGM remained the weakest among the seven major studios. Its revenue-generating points were still confined to traditional film operations, far less rooted than the other major companies that had formed large media conglomerates. If MGM completely lost support from Firefly Group -- and worse, faced a crackdown from Firefly after the relationship soured -- MGM would suffer a far more severe impact than simply losing Pierce Brosnan.
As news of the complete break between MGM and Eric spread and was accepted by more and more people, the situation suddenly shifted.
At around 11 AM PST, with just an hour and a half left until closing on the East Coast, MGM's stock price trajectory resembled a lead weight under the influence of gravity. By the time the closing bell rang, MGM's stock settled at $22.82 -- completely negating any uplifting effects from Pierce Brosnan's return to MGM Headquarters. Compared to the opening price of $26.45, the day's decline reached a staggering 13.7%, causing MGM's overall market capitalization to plummet back to the ten billion zone, resting at $9.92 billion.
...
After tossing and turning all night, while occasionally thinking that at worst he could sever ties with MGM, as dawn broke, from the view of his newly acquired Beverly Hills mansion overlooking morning Los Angeles, Pierce Brosnan ultimately decided to accept the salary conditions offered by MGM. Richard Lovett was right; losing the role of 007 meant that everything he had fought for in Hollywood for over a decade -- fame, glory, money -- could disappear, and the complete rift might even lead to a coalition blacklist from Firefly, MGM, and even Fox, effectively ousting him from Hollywood altogether.
However, although he decided to compromise on salary, specific terms such as personal treatment on set, whether to cooperate with MGM on product placements, and the extent of dangerous stunts during filming, were issues on which both Brosnan and Richard Lovett, who had come personally to handle negotiations, displayed a highly meticulous attitude. On the MGM side, there was no engagement on issues of set treatment details, but they were adamant about terms that could directly affect the film's quality. The two sides went back and forth in the MGM conference room all day, and as night fell, they finally settled the contract.
During this time, the news of MGM's stock price declining again was obviously impossible to hide from anyone present, bringing some turmoil within the company.
Having learned the detailed background of the situation, Drew, who had participated in the negotiations at the conference table, appeared indifferent to the stock price drop, even attempting to deter Amy from releasing any clarifying messages. This was not only because she understood better than anyone that the external rumors were entirely false, and that proper clarification would surely boost MGM's stock price again, but because she seemed to welcome the situation.
Merely a rumor of Eric possibly breaking with MGM had triggered a significant plummet in stock price, highlighting Eric's influence and importance to MGM for anyone who had doubts. After a heartfelt discussion last night, she decided to go all out to help Eric secure control of MGM, but she intended for no one to think that Eric's influence on MGM would diminish.
However, she also understood the importance of moderation. Allowing MGM's stock price to experience the kind of rollercoaster fluctuations it had throughout the day provided ample stimulation for some. That evening, MGM began to take action to restore its stock price.
After officially signing the contract with Brosnan, MGM announced the news that night on Yahoo.
...
Four films for a total of $60 million; upon hearing this news, it clearly startled many. This sum was obviously too low, rather than being too high at an average of $15 million per film.
For most Hollywood stars, an average salary of $15 million per film might be unattainable. However, given the anticipated box office revenue for Casino Royale and the immense profits it would bring MGM as part of the spy movie universe, Brosnan's $60 million package for four films was essentially a bargain. Before this, numerous media had speculated that Brosnan's next contract with MGM wouldn't dip below $60 million per film.
After the shock subsided, some people began to realize that if this contract was genuine, MGM had clearly triumphed in the salary dispute with Pierce Brosnan, achieving a madly overwhelming victory.
So, considering that Eric Williams had aggressively suppressed Brosnan's salary and even risked replacing him, would he really part ways with MGM as most media speculated? After all, without Eric's strong insistence, MGM would find it hard to secure a four-film contract with Brosnan, not even reaching $160 million.
Moreover, this victory positively impacted the overall advancement of MGM's spy movie universe's next phase. Whether it was the Charlie's Angels trio or Kevin Costner from Mission: Impossible, they wouldn't approach salary negotiations with MGM feeling overly confident.
...
Amid the chaos of comments and conjectures, the following day, MGM offered the media and the public an indirect answer through another means.
MGM was set to launch a brand-new racing movie series, Fast and Furious, with Eric personally serving as the screenwriter and credited producer. Furthermore, if the movie received favorable market reactions, MGM intended to integrate this series into the spy movie universe in the future.
On the Eastern time morning at 9 AM, MGM announced this news via Yahoo. As the market mulled over the implications of this announcement, at precisely 9:30 AM EST, just before the New York Stock Exchange opened, Pierre Truc, CEO of Havas Group's U.S. division, announced his resignation from MGM's board due to work-related reasons, with successors to be jointly nominated by MGM management and the major shareholders.
At this point, even the slowest reactors began to realize that Eric had never lost control over MGM. He not only aggressively dominated the salary negotiations with Brosnan but also unceremoniously ousted Pierre Truc, the European shareholders' spokesperson attempting to intercede in MGM's management, from the board.
While it still wasn't entirely clear why Eric would transfer the risky Lord of the Rings trilogy entirely to Firefly Group, it did nothing to prevent capital markets from rekindling confidence in MGM. After all, investors were always primarily concerned with profits, and Eric's recent strong moves, although causing turmoil at MGM, were undoubtedly favorable for MGM's development.
Consequently, on Thursday, MGM's stock price rebounded strongly to $27, with a market capitalization of $11.74 billion.
...
As Friday approached, due to a week's worth of news about the possibility of Pierce Brosnan's replacement, Casino Royale's buzz surged once again. A large number of fans flocked to the theaters to 'honor' the soon-to-depart Brosnan.
Ultimately, three weeks into its release, Casino Royale's box office decline narrowed again to just 32%, grossing an additional $52.73 million, bringing its cumulative total to $247 million. While it hadn't yet surpassed Finding Nemo's $263 million in its fifth week, Casino Royale's third-week earnings outpaced its competition by a striking $8 million.
Calculating these numbers, it was evident that Casino Royale's North American box office would ultimately exceed that of Finding Nemo, with some analysts even raising Casino Royale's expected North American earnings to $370 million, while forecasts for Finding Nemo typically hovered around $330 million.
After the box office numbers were announced, further good news coupled with a variety of positive impacts from yesterday allowed MGM's stock to breach $30, closing at an impressive $30.37. Based on a total of 435 million shares, MGM's market value at the week's close reached $13.2 billion.
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