[Chapter 980: Warner's Calculations]
After attending the product launch event for Firefly Electronics, the next day, Eric flew to a small town called Lone Pine, located over 200 kilometers east of Los Angeles, on the VH-60N helicopter he retrieved from Larry Ellison. He continued filming outdoor scenes for Iron Man.
At the same time, with the buzz generated by the collaboration of three companies, Austin Powers: The Spy Who Shagged Me continued to rake in over $6 million a day at the box office. After a weekend opening gross of $46.99 million, the total box office for Austin Powers in its first week reached $73.6 million. This amount set a record that many blockbuster films found hard to achieve.
In comparison, the originally anticipated film City of Angels only earned $23.96 million during its first week, falling well behind Austin Powers. The movie quality of City of Angels wasn't particularly bad, and Warner's marketing efforts were commendable. However, with Firefly, Fox, and MGM's cunning marketing strategies drawing the audience's attention, City of Angels had almost fallen into a state of forgetfulness. Despite Warner's efforts to recover the situation, they still failed to seize any substantial attention from Austin Powers: The Spy Who Shagged Me.
The facts revealed that a film lacking in attention often performed worse at the box office than a movie that had been widely criticized. Notably, Austin Powers, although labeled as a bad film by many critics, enjoyed a decent reputation among general audiences.
...
Entering the week of Easter, The Wedding Singer and Species both opened widely. Inspired by the excellent box office results of Austin Powers: The Spy Who Shagged Me, the marketing departments of the three companies stepped up their game, flexibly changing their promotion strategies and hitting the theme of "more choices" to promote the Easter movie package.
While Austin Powers had tremendous buzz, a significant portion of the audience still didn't appreciate such raunchy films. The release of The Wedding Singer and Species provided these viewers with a fresh alternative. The marketing tactics of the three companies effectively concentrated on this point.
Consequently, many theater operators noticed a significant increase in the number of patrons heading to the cinemas compared to previous years during the Easter weekend.
This trend continued until Monday, April 13.
...
Richard Parsons, the CEO of Warner Bros, rushed to the Warner Bros headquarters in Burbank early in the morning. His secretary had already placed the Easter weekend box office data on his desk.
In addition to New Line and MGM's two new films, there were several other low-budget films that opened last Friday. However, looking at the box office figures in his hands, Richard Parsons frowned slightly; the three films from Firefly's system were undoubtedly occupying the top three positions on that weekend's box office chart.
With increased competition, there was no repeat of the previous week's dominant performance by Austin Powers: The Spy Who Shagged Me. New Line's The Wedding Singer, a warm romantic comedy appealing to a wide audience, grossed $31.7 million in its opening three days, landing firmly at the top of the Easter weekend box office rankings.
Following closely was Austin Powers, which saw a very respectable 45% drop from its opening weekend, bringing in another $25.85 million, securing the second position on the box office list. It was worth mentioning that in just ten days, Austin Powers: The Spy Who Shagged Me had accumulated a total of $99.45 million at the North American box office, just shy of the $100 million mark by a mere $550,000.
In contrast, the sci-fi thriller Species performed somewhat more sluggishly, with an opening weekend three-day gross of just $21.77 million. Of course, this sluggish performance was only in comparison to the two other Firefly films, as Universal's new release, Playing Hard to Get, ranked fourth with a mere $13.12 million, trailing Species by nearly $9 million.
[T/N: I did not find any reference to the Universal's movie. Original text was 欲擒故纵. You can assume this is a Butterfly-ed movie.]
At fifth place was Warner Bros' City of Angels. Being squeezed by this series of films, City of Angels faced a staggering 46% drop in its second week, bringing its second weekend box office down to just $8.19 million, with a cumulative total of $32.15 million over ten days, still just one-third of Austin Powers: The Spy Who Shagged Me's earnings.
One could say that Austin Powers: The Spy Who Shagged Me was undoubtedly the biggest winner in this year's Easter season.
...
Setting aside the box office data report, Richard Parsons rubbed his temples, reflecting with a sense of dark humor that if the Firefly system's companies launched another Easter movie package next year, there would surely be internal disputes over who got to lead the charge, making for quite the lively affair.
Considering the current situation, Austin Powers: The Spy Who Shagged Me had nearly hit the $100 million mark in just ten days, and with another two weeks of concentrated box office earnings still to come, it could potentially amass an additional $60 million or so, indicating that if it maintained a slight uptick, its total North American box office could range between $180 million to $200 million.
In contrast, whether it was The Wedding Singer or Species, the maximum potential for North American box office earnings, given their current openings, was only around $100 million, and the likelihood of that happening was very low. The Wedding Singer might just scrape through to the $100 million threshold, but Species clearly did not stand a chance.
Achieving $100 million at the North American box office during Easter, even if it ended up earning just $70 or $80 million, was still an exhilarating success given the mid-range production budgets of the two films. However, compared to Austin Powers: The Spy Who Shagged Me, such success would inevitably seem vastly inferior.
Faced with the over $100 million earnings gap, Richard Parsons did not believe that the current close cooperation among the three companies could continue.
After some self-soothing thoughts, he suddenly regretted not doing everything possible to facilitate Warner Bros' collaboration with the three Firefly companies in the "Easter Movie Package."
It was clear to everyone that the three films launched by the Firefly system could not be regarded as top-notch in terms of quality. Their box office success was primarily due to an exhaustive marketing campaign by the three companies.
Warner had a significant opportunity to be part of this initiative, as it was Firefly that had initially proposed the collaboration. However, due to delays from the specific executors in the distribution department, Warner missed out on this chance.
City of Angels had a production cost of $55 million and a marketing budget of $25 million, making its total budget around $80 million.
Now, looking at the box office figures for City of Angels, it seemed this film only stood to earn approximately $50 million at the North American box office. Warner's distribution department was even considering canceling its overseas release, opting instead to focus on recovering costs through outright sales of the rights, which would likely only yield around $10 million.
Therefore, the total revenue that Warner could recover from City of Angels would total less than $40 million. Given the lengthy cycle for DVD releases and broadcast rights, which were not a current consideration, it implied that in the short term, Warner's losses on this project would exceed $40 million.
While Time Warner was a large corporation, a $40 million loss could not be classified as a small sum.
Although the failure to secure this collaboration partnership did not fall squarely on Richard Parsons, someone had already brought the matter up against him during last week's executive meeting. He also regretted not compelling the collaboration; as the CEO of Warner Bros, he could have enforced the smaller partnership without anyone being able to stop him.
However, despite his position, the political factions within the film division at the group were heavily intertwined. Concerned about potentially igniting internal discord, Richard Parsons refrained from taking such actions and hence, what could have been a straightforward achievement turned into a regrettable decision.
...
As Richard Parsons contemplated how to mitigate the potential impacts of this incident on his future, there was a knock at the office door. His secretary entered and announced, "Mr. Parsons, Mr. Levin is here."
As the secretary spoke, a tall man with somewhat graying hair stepped into the office; it was Gerald Levin, the current vice chairman of Time Warner. Besides his role at Warner, Levin was also one of the significant personal shareholders in Time Warner.
Richard Parsons had risen to his current position with the backing of Gerald Levin, and he could be considered among Levin's most trusted aides. Seeing Levin enter the office, Parsons quickly stood to greet him.
The two embraced warmly, and Parsons instructed his secretary to prepare coffee. He led Gerald Levin to the sofa in the reception area and said, "Jerry, what brings you here at this time?"
"I just met with Steve Case over the weekend. I have a few things I'd like to discuss with you," Levin replied, noticing the lingering worry etched on Parsons' face. "What's wrong?"
Parsons managed a wry smile, rose from his seat, walked to his desk, retrieved the document he had been reviewing, and handed it to Levin. "It's about the Easter weekend box office."
Levin took a glance at the document, tossed it aside casually, and said cheerfully, "Don't worry, as long as we handle the upcoming matters, these little issues won't affect you at all. Plus, Fred who is in charge of distribution is a Semel person; you can easily pin this slip-up on them."
As they were talking, Parsons' secretary brought the two men their coffees, pausing their conversation momentarily until the elegant blonde left the room and they resumed their discussion.
"I've had a detailed conversation with Steve Case. As long as we can jointly facilitate the merger between AOL and Time Warner, he's willing to work alongside us in running the future company. By then, Time Warner will continue to hold authority," Levin explained.
Since last year, Levin had started negotiating secretly with AOL's CEO Steve Case regarding the merger of their two companies. As one of Levin's key insiders, Parsons had been in the loop regarding these discussions.
Just as he took a sip from his coffee cup, Parsons sounded slightly confused by Levin's statement, "Jerry, are you saying this merger will be led by AOL?"
Levin nodded, "Theoretically, that is correct. AOL is initiating an acquisition of Time Warner, and we will respond accordingly."
Parsons furrowed his brow slightly; in recent months, the Asian financial crisis had led to a substantial influx of hot money back to the U.S., and the NASDAQ index had begun to rise rapidly again. AOL, as one of the foremost tech stocks, had already surpassed a market capitalization of $30 billion.
However, Time Warner's market value was nearly $50 billion, and that was merely the difference in stock value.
When it came to fundamental strength, Time Warner had the upper hand over AOL by a considerable margin. To say nothing else, Time Warner's annual revenue was five times that of AOL.
Thus, Parsons found it hard to accept that this acquisition would be led by AOL; he didn't think a company like AOL, bloated by the tech boom, had the qualifications to acquire an established media giant like Time Warner.
Yet acceptance was one thing; Parsons quickly realized that putting the reins in AOL's hands was the only way to ensure they maintained influence over the newly merged company. If Time Warner led the acquisition, the internal faction aligned with Levin would most likely not gain control over the merger transaction.
Over the years, Time Warner had essentially become a publicly traded company, and key individual shareholders like Gerald Levin maintained their stakes at merely single-digit percentages.
With shareholder power being so diffuse, no single party had decisive influence, meaning the management of Time Warner had well-established control over the media giant. As long as they secured control over Time Warner, Levin was willing to make certain sacrifices, even if it affected his own interests as a shareholder, let alone those of other shareholders in the group.
Thus, after receiving reassurances from Steve Case, Levin had unhesitatingly relinquished the lead role in this acquisition.
As Parsons swiftly pieced together these details, he drank from his coffee cup, set it down, and said, "So, Jerry, the most important question is, what's Firefly's stance? After all, they are the largest shareholder in AOL."
"Chris Hansen, the head of Firefly Investments, had made it clear that they didn't want AOL moving toward becoming a comprehensive media group. This was likely also in line with Eric Williams' intentions; they did not want AOL to venture into the media sector, preferring instead for it to focus purely on being an internet service provider," Levin explained. "However, Firefly's stake in AOL is only about 30%. Steve Case is currently lobbying the other AOL shareholders to support him. He assured me I shouldn't worry; we only need to resolve the issues on the Time Warner side."
Parsons nodded, "What is it you need me to do?"
"I also need to lobby Time Warner's board and shareholders during this period. You need to dive into the merger details with Steve Case, and I hope we can reach a preliminary merger agreement by the end of the year."
*****
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