After having some food, Simon got up and started socializing among the crowd.
With Janette not by Simon's side, Sandra unceremoniously began to act as his companion. Courteney, knowing that her relationship with Simon wasn't close enough for such intimacy, tactfully left.
Sandra waited for Simon to chat with Mike Medavoy, president of Orion Pictures, for a few words. The two then walked towards the villa, and she asked, "When are you going to Australia?"
Simon raised his glass to a guest he wasn't too familiar with, without stopping, and said, "The day after tomorrow".
"The day after tomorrow?" Sandra was a little surprised: "So soon?"
"It's not urgent; it's been planned for a while", Simon said, looking at Sandra's surprised expression, "I'll probably be in Melbourne for over three months. If you have time, you can come visit".
Sandra glanced around, feigning concern, and said, "Australia is Janette's home turf, and her family even owns mines. Will I be arrested and thrown into a mine pit if I go?"
Simon nodded with a serious expression: "It's very possible".
Seeing Simon like this, Sandra became displeased and said, "Aren't you going to do anything about it?"
Simon's lips curved into a smile, but his tone was troubled: "It's hard to manage; her family has many mines, and some are even in Africa".
Sandra rolled her eyes: "Bastard".
Chatting and laughing like this, Simon approached Wes Craven, the director of 'Scream', and started a conversation.
Although there had been some friction between them previously regarding the director's fee for the 'Scream' sequel, after some deliberation, Wes Craven still accepted Daenerys Entertainment's package deal of $15 million for two sequels.
Evidently, Wes Craven hadn't been carried away by the success of 'Scream', repeating the mistake of his departure from the 'A Nightmare on Elm Street' series. A director's fee of $15 million for two horror film sequels was already very difficult to surpass.
After a few words, Simon and Sandra were about to move on when Nancy Brill, the president of the consumer products division who had recently joined Daenerys Entertainment, walked over with a slightly overweight man in his fifties.
"Nancy, you look beautiful tonight", Simon shook hands with Nancy Brill, then looked curiously at the middle-aged man, waiting for Nancy to introduce him.
Nancy Brill smiled as she shook hands with Simon, then greeted Sandra, and finally said, "Simon, this is Mr. Wayne Huizenga, he is the chairman of Blockbuster".
Simon had initially thought the middle-aged man was Nancy Brill's husband, secretly sighing that a beautiful flower was stuck in cow dung, but upon Nancy's introduction, he realized his misunderstanding.
After discussing the possibility of venturing into the video rental chain business at the last meeting, Nancy had been collecting relevant information while also managing Daenerys Entertainment's consumer products division. It was clear that this woman was not content with only overseeing a consumer products division.
Simon actually liked ambitious women, especially ambitious and beautiful women. Of course, the prerequisite was that they needed to possess matching capabilities. Although he didn't know Nancy too deeply yet, Simon could largely determine that she was a very capable woman.
Thinking this, Simon didn't hesitate. He extended his hand to Wayne Huizenga and said with a smile, "Hello, Mr. Huizenga, your surname is quite unique".
"Hello, Simon, actually the surname Westeros is truly unique", Wayne Huizenga smiled warmly as he shook hands with Simon, then clearly and intentionally added, "Our family are Nordic immigrants. Huizenga is a Dutch surname".
Simon realized, saying, "Nordic surnames, I know some, they all seem quite difficult to pronounce".
While chatting casually with Wayne Huizenga, detailed information about Blockbuster also surfaced in Simon's mind.
This company was founded in 1985 by a software engineer named David Cook from Texas, but after only a little over a year of operation, David Cook sold Blockbuster and left the company.
Wayne Huizenga, who was in the waste transportation business, discovered this company and, along with several other partners, bought Blockbuster. At the beginning of this year, they began investing heavily in its expansion. In just one year, Blockbuster grew from dozens of chain stores to 386, according to data Simon recently saw, growing at a rate of almost one store per day.
In this era, the cost of investing in a video rental store was approximately $500,000. Including other expenses, Wayne Huizenga and his partners had already invested nearly $200 million in just this one year.
However, judging from the revenue data from the previous few quarters, Blockbuster's total revenue for 1988 was probably only $130 million. Due to continuous large-scale investments, the annual financial report naturally showed a loss.
Wayne Huizenga also started from scratch back then, having been in business for over twenty years, and his personal assets were still less than $300 million. Naturally, he could no longer sustain Blockbuster's high-speed expansion, even if he shared the investment with his other partners. Blockbuster still accumulated a debt of up to $80 million in the past year.
Now, with the North American stock market not yet fully recovered, Blockbuster is not suitable for financing through an IPO. To continue its current expansion rate, Wayne Huizenga can only seek other investors to buy into the company.
From memory, five years later, Blockbuster was acquired by Viacom for a massive sum exceeding $8 billion. Even if Blockbuster's current valuation is calculated on the higher side, given its various conditions, it wouldn't exceed $300 million, and its share of the North American video rental chain market is still less than 5%.
Therefore, even though Simon has always had some reservations about the video rental chain business, entering Blockbuster at this time is definitely the best opportunity, and it is sure to bring very generous returns.
Since it was a celebratory New Year's Eve party, Simon didn't discuss overly formal matters with Wayne Huizenga. After agreeing on a meeting time for tomorrow morning, Wayne Huizenga took his leave.
Simon watched Wayne Huizenga's figure walk away, then looked at Nancy and asked, "How did the talks go?"
Simon had no time to haggle with Wayne Huizenga, as he was leaving for Australia the day after tomorrow. Tomorrow's meeting would largely determine if the two parties could reach a cooperation. Prior to this, Simon had already authorized Nancy to negotiate with Wayne Huizenga.
Nancy Brill said, "He initially hoped to get $100 million in investment from Daenerys Entertainment by transferring 30% of Blockbuster's shares. I negotiated it to 35% for $120 million. Simon, we are not the only company interested in investing in Blockbuster; Sumner Redstone's Viacom Group has also been in contact with Wayne Huizenga".
Simon thought for a moment and said, "$120 million probably isn't enough for Blockbuster's expansion next year, is it?"
Blockbuster has already invested $200 million this year. Continuing at a growth rate of one store per day, Blockbuster's store count is estimated to reach 800 by the end of next year. Even if the company's own revenue offsets some of the financial pressure, next year's investment should not be less than $200 million.
Nancy shook her head, explaining, "Indeed, it's not enough. However, transferring 35% of the shares is the limit Wayne Huizenga and others can accept; they don't want to lose control of the company. Viacom wanted more shares, which is why the two parties couldn't reach an agreement. As for the remaining funds, Blockbuster should solve it through loans. If necessary, they might introduce other investors or conduct an IPO early."
Simon also nodded slightly.
If Daenerys Entertainment were in urgent need of funds right now, even if Simon owned 100% of the factory's shares, the maximum he would be willing to transfer would probably only be 35%.
Wayne Huizenga, along with his other partners, owned Blockbuster, and none of them originally held more than 30% of the shares. For Daenerys Entertainment to acquire 35% of the company's shares for $120 million, it should make them the largest shareholder.
It is conceivable that in tomorrow's meeting, Wayne Huizenga will certainly propose a clause stating that Daenerys Entertainment must not unduly interfere with Blockbuster's operations as a major shareholder.
However, if he couldn't interfere with Blockbuster's operations, Simon had little confidence in the company's long-term development.
David Cook's original creation of Blockbuster only partially mimicked Walmart's warehousing and logistics and information integration systems. This management and operational model was very successful in Blockbuster's early years of expansion, but the video rental industry developed and changed much faster than supermarkets. By the 1990s, Blockbuster's current business strategy would quickly become outdated.
From memory, a significant turning point in Blockbuster's development was its acquisition by Viacom five years later.
After that, under the control of Sumner Redstone, who no longer had enough energy to manage Viacom's business empire, Blockbuster, although still expanding in scale, was actually on a downward trend, much like the entire Viacom Group.
Although Blockbuster still existed until Simon's reincarnation, compared to its successor, Netflix, the two were already worlds apart.
To avoid repeating past mistakes, Blockbuster must constantly adjust its development strategy in the coming years. Simon had no confidence whatsoever in Wayne Huizenga's ability to do this. Therefore, if Simon wanted to be involved in the video rental chain business long-term, taking over control of Blockbuster was clearly the best option.
However, this matter is not urgent at the moment.
The most important thing now is to secure 35% of Blockbuster's shares. As long as Daenerys Entertainment ensures these shares are not diluted in the coming years, Simon will have enough leverage to seize control of Blockbuster when necessary.
As Simon was talking in a low voice with Nancy, a hearty greeting sounded from nearby.
Turning around and seeing Robert Redford, Simon smiled and said, "Bob, I'm so glad you could make it tonight. How have you been recently?"
"Very well, Simon", Robert Redford shook hands with Simon and said, "I've seen 'Metropolitan Man', it's a very thoughtful film".
Simon smiled. Although Sundance only accepted one Daenerys Entertainment film this year, he harboured no resentment towards Redford. Everyone was in the same circle, and Redford was one of CAA's most important stars, so he couldn't be completely unaffected by those around him.
Moreover, this Hollywood big shot had helped him a lot back then. Aside from 'Run Lola Run' unexpectedly pushing the Sundance Film Festival into a fast development track, Simon himself hadn't repaid the other party much. If calculated carefully, he actually still owed Redford some favours.
The two chatted casually about recent events for a few moments, then Redford's expression became a little more serious, and he lowered his voice slightly, saying, "Simon, there's one more thing. Michael hopes to speak with you in person. Are you free tomorrow?"
The Michael in Redford's mouth was naturally Michael Ovitz, the president of CAA.
Recently, with the unexpected success of 'Rain Man' at the box office, CAA's position in this storm seemed very awkward. Moreover, CAA should also have already felt Daenerys Entertainment's complete ban on its artists.
Aside from anything else, at tonight's party alone, apart from a handful of collaborators like Redford, Daenerys Entertainment did not invite any other prominent figures from CAA. The big names at the party were basically all from companies like WMA and ICM.
Daenerys Entertainment and CAA had never openly broken ties, and Simon's few meetings with Ovitz could even be described as pleasant. However, after the series of entanglements surrounding 'Rain Man', the huge rift between the two parties was almost common knowledge.
Ovitz likely asked Redford to relay the message this time, considering that a direct approach from himself might be rejected by Simon. If Ovitz had been able to dissuade Barry Levinson and others from breaking ties back then, if CAA hadn't pulled those small tricks behind the scenes before 'Rain Man' was released, if CAA hadn't demanded an exorbitant price for Meg Ryan, there might still have been some room for reconciliation between the two parties.
Now, Simon would indeed refuse the other party; he felt there was nothing to discuss with Ovitz.
As for completely falling out with CAA, Simon didn't care too much. The nature of talent agencies themselves already determined their subservient position to Hollywood producers, rather than a dominant one. Frankly speaking, because CAA had continuously and significantly raised the budget costs for studios' film and television projects in recent years, even without this incident, Daenerys Entertainment and CAA were destined to become adversaries due to conflicting interests.
Although he had a good relationship with Redford, Simon couldn't agree to his mediation without principle. So, he regretfully shook his head and said, "I'm sorry, Bob, my schedule for tomorrow is already full".
Redford didn't give up, saying, "Simon, it's just one movie. Moreover, Daenerys Entertainment has already achieved success, there's no need for everyone to be like this".
Due to a fundamental detachment from this world, Simon rarely got overly emotional about anything, but at the same time, he was never a forgiving person. When someone throws various dirty punches behind another's back, almost making them vomit blood, and then afterwards says, 'there's no need for everyone to be like this' to seek reconciliation, how is that possible?
Shaking his head again, Simon smiled and changed the subject, saying, "Bob, what are you planning to shoot for your next movie? I'm really looking forward to it".
Seeing that his efforts to mediate were fruitless, Robert Redford could only sigh inwardly. Although he had some friendship with Simon, given Simon's current wealth and status, he didn't feel he could influence the young man too much. Since the message had been delivered, Redford didn't waste any more words.