I’m in Hollywood Chapter 579: Quote
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Buffett itself is very optimistic about the video tape rental industry. For this reason, he also studied the Blockbuster data in detail. Since the mid-1980s, the profit generated by the video tape industry has been no less than that of the movie Box Office, and has 3,000 branches. Blockbuster is undoubtedly the 'Walmart' of the video tape rental industry. Blockbuster's annual profit last year was not much less than Hollywood's seven largest Film Studio. And this video rental giant also has Buffett's most fancy huge cash flow. The video tape industry has been thriving all these years, but Buffett does not feel that there is a bubble in this industry. Therefore, the contempt of Blockbuster in the Eric language makes Buffett very puzzled: "Eric, don't you optimistic about the prospects of the video tape industry?"
Video tapes and the upcoming DVD rental industry will flourish for at least ten years. Of course, Eric cannot be optimistic about this industry. He is not optimistic about the business model that at least the Blockbuster chain store will be quickly eliminated after a few years.
"Mr. Buffett ..."
Eric just opened his mouth. Buffett interrupted his words softly and smiled and said softly: "Eric, you can call me Warren. I do n’t want the communication between us to be like formal business negotiations. What do you think?"
"Okay, Warren," Eric nodded with a smile: "If you have been to some Blockbuster rental chain stores, you will find that it is always very troublesome to find some video tapes, and the various fees of Blockbuster are also very low Reasonable. I believe that if there is a better video rental business model, the elimination of Blockbuster is almost inevitable. "
Buffett does not have any posture of the rich, and continues to ask: "I think you must have considered a better business model you have said?"
"Of course, for example, on the Internet, we can build a dedicated video rental website, customers want a movie, just enter the name of the movie on the website. You can easily find the detailed rental information of the relevant movie, we It is even possible to set up a special postal system to make it easier for customers to rent videotapes. "
Buffett's focus on the high-tech industry is not too much. This can be seen from his investment portfolio clue, Berkshire Hathaway is basically involved in traditional industries. However, because of the information highway plan that Clinton Administration is vigorously promoting, Buffett has been exposed to a lot of relevant information. Buffett is keenly grasping the most critical part of the Eric plan: "Eric, you do n’t think Are there too few internet users? "
Eric has not paid attention to the growth of North America network users in recent times, but he quickly found a similar example: "It is not too much, but users who can log on to the Internet often have considerable spending power. And, ten When the personal computer first came out many years ago, perhaps no one realized that this expensive household appliance that seems to be of little use is now able to sell millions of units every year. In this decade, North America and even the world Tens of millions of users with personal computers have accumulated, and the economic strength of these people is usually not too bad. With the increasing content of the Internet, I believe most people will choose to intervene on the Internet. "
In the process of researching Eric's personal data, Buffett also deliberately logged in to Yahoo web portal, and also established his own online email account, although many people feel that his personal style is very conservative. But Buffett is a person who never forgets to learn and accept new things. He feels that the contact method of online mailboxes is indeed much faster than letters, but because of the current limitations of various hardware and software conditions, Buffett can't think of the profit prospects of these network services. Buffett has always been a profit-seeking investor, and strictly adheres to the principle that investment must be rewarded. If tens of millions of USD is invested but cannot be rewarded, he cannot think of one thing and any necessity to continue.
"Eric, before I came, I saw the Yahoo web portal that you invested in. What I want to know is, are you building this website for investment or pure public welfare?"
"Of course it is an investment." Eric feels that Buffett has obviously turned the topic upside down. Today, it is clearly about the acquisition of TV Network by Firefly. However, Eric is also very clear. Buffett is a person who has a very strong desire to ask questions. From many materials of Buffett, he can see that Buffett often bombards the heads of this company when they are interested in a company. However, Eric does not mean any impatience. In fact, many business transactions are determined in this kind of chat that you come and go. As for the kind of commercial negotiations that are often talked about, they are often negotiated in detail after the transaction intention is reached.
"So, for example, Yahoo web portal, when do you plan to make it profitable, and in what way is it profitable?"
"I have never considered the profitability of Yahoo in recent years, and it is still in the market cultivation stage," Eric replied slowly: "Warren, imagine that if Yahoo has more users than 100 million, those advertisers would be willing to How much does it cost to advertise on the Yahoo website? "
100 million users!
Buffett narrowed its eyes slightly and did not take the word Eric as a fantasy. As Eric just said, no one knew that ten years ago, personal computers could now sell millions of units each year. If in the future Internet users really increase by the scale of millions or even tens of millions of users every year, then 100 million users are not a distant matter.
Because of newspaper media ’s advertising revenue, Berkshire owns a number of newspapers, but the largest daily “The Washington Post” currently has only a few million copies, but even these millions of copies The sales volume can bring hundreds of millions of USD profits to the post company every year. Therefore, the Internet media with 100 million users, after finding suitable profit-making means, will definitely generate more profits than any traditional paper media.
Although Buffett is not an impulsive person, he has obviously made a move at this time, but this move does not allow him to immediately join the Internet wave.
After a quick moment, Buffett took a few sips from the Coke in front of him, gently lowered the cup, and looked at Eric: "Eric. The prospect is indeed very tempting, and I look forward to seeing Yahoo As you said in the future. So, let ’s talk about TV Network. I heard you talked to Barry Diller a few days ago? "
"Yes," Eric showed a regretful expression. To be honest, "It's a pity that he didn't plan to join Firefly."
Buffett looks unchanged: "So, if I promise to sell ABC to you, how do you plan to place Tom, you know, we are good friends, I need to consider for the benefit of friends."
“If you can successfully acquire ABC, Firefly will not make too many adjustments to ABC ’s personnel. The performance of ABC in the past few years is also sufficient to prove the management capabilities of Mr. Tom Murphy. Therefore, Firefly will mainly Increase ABC's investment in content. We all know that TV Network is also like a sales platform, and TV programs are the "commodities" it sells. Any customer at the same price will be more willing to patronize and own quality. High commodity store. "
Buffett is clearly satisfied with Eric ’s answer, and he begins to ask other questions he cares about, involving various issues that may arise after Eric acquires TV Network in the future. Both people seem to be chatting about a trivial matter from beginning to end, and have not been talking about the most important purchase price.
After more than an hour, the two finished a large bottle of coke. Buffett finally said: "Eric, overall, I am satisfied with your various plans after the acquisition of TV Network, so we can now talk about the purchase price."
Buffett and Tom Murphy now own most of the equity of ABC TV Network, which means that as long as these two nods, Firefly Pictures will hardly encounter much help in acquiring ABC.
However, Eric is not too easy at this time, because he has realized other things. If Buffett just intends to sell ABC to Firefly to cash out, it won't talk to himself for so long. Perhaps he would only quote a sale price very directly.
Sure enough, Buffett immediately said again: "Eric. Although I am more optimistic about this transaction, I do not intend to cash out all the shares of ABC. I and Tom have already talked about this matter, we will only use cash at most Selling 30% of ABC's shares in the form of a transaction, and the other 70% I hope to be able to invest in Firefly Pictures as capital. "
Eric had already anticipated the Buffett attempt. From the bottom of his heart, he did not want to exchange in the form of cash plus stock exchange, but now it is different from the acquisition of Disney's. When Firefly acquired Disney's, Disney's The performance is in a downturn, and the Firefly, which was not too large at that time, completely annexed Disney with a snake-like appearance. Most investors are not too optimistic about the acquisition of Firefly. In addition, Disney does not have a major shareholder that is almost as controlling as ABC. The equity is quite dispersed, so Firefly Pictures can only realize the cash acquisition attempt.
In the past two years, Firefly Pictures's performance is really dazzling. Although this year's financial report has not been released, but the net profit exceeds 1billion USD, there is almost no suspense.
Except for the Time Warner group, which is larger than Firefly, Hollywood currently has no Film Studio that can achieve such annual profits. Therefore, the investment institutions around the world have always focused on Firefly Pictures. Looking forward to Firefly Pictures's announcement such as listing, in this case, Firefly wants to expand towards TV Network. Whether it is ABC, or the less powerful NBC and CBS, it will definitely not give up this great opportunity to invest in Firefly.
As for Buffett ’s proposal to invest 70% of ABC shares in Firefly, Eric did not rush to bargain, but asked: "So, Warren, I want to know how many Firefly Pictures shares you intend to exchange for 70% of ABC shares. What about? "
"49%," Buffett replied quickly, and it has obviously been considered for a long time: "Eric, we can use the current stock price of ABC to calculate. The estimated value of ABC is about 10billion USD. For Firefly Pictures, I give an estimate of 15billion USD Value, and, I know that you will never give up the absolute controlling power of Firefly Pictures, so we do not require controlling power, you are still the largest shareholder, I will not be involved in the management of Firefly in the future, how do you feel? "
How about it, of course not.
Although the business of Firefly is not as extensive as Time Warner, the annual profit of Firefly is definitely comparable to that of Time Warner. Although many people follow the normal development trajectory of Hollywood Film Studio, they will definitely think that this profit rate is only temporary, but Eric I am very confident that Firefly can definitely maintain a high growth status for a long time. Even without TV Network, Firefly's future profits will only increase. After all, movies produced by Film Studio or TV series are also a commodity, while Eric has the ability to produce and select ‘high-quality goods’ that no one can match.
"Warren, this price is too high, I will definitely not agree," Eric did not turn around and said directly: "Firefly ’s net profit last year was close to 1 billion USD, and this year may even exceed Time Warner, and we all know that Now that the market value of Time Warner Group is close to three 10 billion USD, Firefly only has a valuation of 15billion USD. Do n’t you think this is too low? "
“Eric, I admit that Firefly ’s performance in recent years is very dazzling, but we are also very clear that the investment return of the film industry is very unstable. Although everyone recognizes your talents in film, it does not It does not mean that you will not fail in the future, just like Spielberg, Hollywood is almost Spielberg's in the entire 1980s, but just entered the 1990s, Spielberg ushered in the failure of "Hook". And, we are also very clear , The market value of a company must not be calculated in terms of profits in a few years. Time Warner owns all industries such as film, television, publishing and music, which means that its ability to resist risks is very high, even in a certain year. There is a significant loss in this business, and it will not affect the overall revenue of Time Warner. But Firefly relatively downloads a lot of business, and businesses such as peripheral income basically basically rely heavily on movie results. "(Unfinished Continued.)