A private airport in southern Chicago.
After the Daenerys Entertainment Falcon business jet landed, Robert Iger and Ira Deutchman enthusiastically saw a couple off the plane. The company, which was assisting John Hughes in filming 'Uncle Buck' here, had even specially sent a car to pick them up, showing meticulous care.
After the couple left, Iger and Deutchman re-boarded, and the Falcon continued flying east after take-off.
Inside the cabin, once the plane reached a stable altitude, Ira Deutchman pulled out a thick directory of Oscar judges from his briefcase, opened it, found a name, and jotted down a few remarks next to it.
Today was Monday, January 23rd.
Over the preceding weekend, Deutchman not only secured the adaptation rights for six stage plays but also hosted award-lobbying receptions for three consecutive days starting Friday.
The couple who had just disembarked, a pair of Oscar cinematography judges, had mentioned at Saturday's reception that they were returning to Chicago today, and Ira Deutchman readily offered them a ride on the company's private jet.
Such a small favour, offered along the way, didn't cost much but could leave a very deep impression on the couple.
This year's Oscar nominations had not yet been announced, but Daenerys Entertainment's lobbying efforts had already begun.
While Robert Rehme was busy expanding Daenerys Entertainment's overseas distribution channels, the nature of Highgate Films business dictated that it had to rely on major film awards to survive. Simon therefore entrusted Deutchman with the task of lobbying for the company's films from the previous year.
After failing to secure 'Sex, Lies, and Videotape', Ira Deutchman realized that his original strategy of acquiring as many finished films as possible for distribution would not be so smooth. While adjusting his plan, the results of this awards season's lobbying became crucial for him to gain Simon's approval during his one-year probation.
During his previous trip to the UK and this business trip to New York, Ira Deutchman, in addition to his work, tirelessly visited the award-related contacts he had accumulated over the years. At the same time, he remotely controlled the professional PR firm and awards marketing team hired by the company, sparing no effort.
The Golden Globe Awards, a bellwether for the Oscars, would be held this Saturday, and the corresponding lobbying work had already concluded. His focus would now shift to the Oscars.
Truth be told, with the current prestige of 'Rain Man', under normal circumstances, this film was destined to be a big winner during awards season.
However, Simon did not want 'Rain Man' director Barry Levinson and lead actor Dustin Hoffman to win, yet he wanted to ensure Best Picture, and also hoped 'Dead Poets Society' could win Best Director. This was the biggest challenge for this year's lobbying.
Both Iger and Deutchman strongly agreed with Simon's proposed cooperative mechanism and actively practiced it, thus getting along very well. Two of the three weekend receptions were held at Iger's house.
The two chatted about work all the way, and more than two hours later, the Falcon business jet landed again. This time it was still not Los Angeles, but Salt Lake City, Utah.
The 5th Sundance Film Festival had already opened last Friday. Although he knew that any film the company was interested in now might be snatched up by other studios, Deutchman still intended to see if there were any outstanding films or promising new filmmakers worth cultivating at this year's festival.
Moreover, the film festival should also not be short of Oscar judges with whom he could personally connect and build rapport.
Simon's instruction to Deutchman was to proceed step by step.
There were over three thousand Oscar judges. Lobbying them one by one, building connections one by one, he would eventually understand them all.
In the original timeline, the reason the Weinstein brothers were so invincible at the Oscars wasn't that they invested a lot of effort lobbying every judge every year. The main reason was the deep-rooted strong network and profound influence they had accumulated over many years of operation.
The Falcon business jet finally arrived at Santa Monica Airport in Los Angeles around 11:30 AM.
Iger sent his two assistants to Burbank and came to the Daenerys Entertainment headquarters, where Amy's assistant, Vanessa, was already waiting for him.
After a brief greeting, Vanessa said, "Please follow me, Mr. Iger. Ms. Pascal is currently in a meeting. She said you can go directly to the conference room after you arrive".
Iger was a little puzzled but still followed Vanessa to a small conference room in the company's office building.
Pushing the door open, Nancy Brill, who was in front of the projection screen, saw Iger, paused her explanation, and greeted, "Good morning, Bob".
"Good morning", Iger nodded to Nancy, shook hands with Amy, who had stood up, and then sat down next to her, saying to Nancy, "I'm sorry to interrupt you, Nancy, please continue".
Vanessa handed a document to Iger, and Nancy continued, "Two years ago, Blockbuster won a game rental lawsuit against Nintendo, gaining the right to sell and rent game cartridges. After 'Teenage Mutant Ninja Turtles' is developed, we can also use Blockbuster's channels for distribution, thus taking the initiative in both domestic North American channels and marketing".
Iger listened to Nancy's introduction, quickly flipping through the document Vanessa had handed him.
It turned out to be a development plan for the 'Teenage Mutant Ninja Turtles' video game for the Nintendo NES platform. Seeing this, Iger couldn't help but recall the Atari crash a few years ago.
Atari was originally a game console and software development company under Warner Bros.
In 1977, Atari's Atari 2600 game console quickly became popular in the United States, reaching a peak where it was even so widespread as there being one Atari console for every three American households.
However, after the success of the Atari 2600, Warner began to frantically extract profits from this game platform, unrestrainedly allowing a flood of uneven quality game developers to rush in and create a large number of inferior games.
Countless low-quality games flooded the market, continuously wearing down users' patience.
Ultimately, the 'E.T. the Extra-Terrestrial' video game, hastily developed by Warner in six weeks in 1982, became the fuse that triggered a major crash.
Users, who had been continuously battered by various inferior games, originally thought that a game combining the fame of 'E.T. the Extra-Terrestrial' with Warner's official brand would surely be quality-assured. However, the quality of 'E.T. the Extra-Terrestrial' was shockingly low, even featuring many basic bugs that wouldn't appear in even the lowest-tier games.
As a result, of the 4 million cartridges Warner had prepared for 'E.T. the Extra-Terrestrial', only 1.5 million were sold, with the rest all sent to landfills for direct destruction.
But this was not the most serious consequence.
After that incident, users completely abandoned Atari.
Sales of Atari game consoles and software plummeted in the following years. The game market, which had exceeded $3 billion in the early 1980s, shrank to as little as $100 million during its coldest period in 1985.
Some analysts believed it would take at least 20 years for the North American video game market to recover.
However, after a brief market 'ice age,' Nintendo, having learned from the Atari crash, gradually filled the North American market void left by Atari's collapse through a series of strict quality control measures, such as the royalty system.
In recent years, the North American video game market has begun to recover. Of course, this field has regrettably become dominated by Japanese companies.
Nancy, at the front, finished her introduction, discussed a few points with Amy, and then humbly asked for Iger's opinion.
Caressing the 28-page proposal in his hand, which had a total budget of only $2 million, Iger thought for a moment and asked, "Nancy, buying the electronic game development rights for 'Teenage Mutant Ninja Turtles' costs $200,000, but you only plan to use a $500,000 budget to make this game. Can the quality be guaranteed?"
Of the total $2 million budget, $200,000 were for purchasing the electronic game development rights for 'Teenage Mutant Ninja Turtles', $500,000 for production, $300,000 for maintaining the game company's daily operations, and the remaining $1 million for production, marketing, and other expenses after the game's development was complete.
Nancy nodded seriously and said, "The main expenditure for electronic game development is labour. Since this is our first venture into electronic game development, I only plan to establish a studio of about 10 people initially, and a $500,000 budget is already sufficient".
Iger then asked, "Marvel's 'Spider-Man', 'Fantastic Four', and other superheroes are also very suitable for game adaptation, and their fame is greater than 'Teenage Mutant Ninja Turtles.' Why choose 'Teenage Mutant Ninja Turtles'?"
Nancy shook her head and said, "I tried talking to Simon about it, but he said no".
Iger was puzzled: "Hmm?"
Nancy sighed helplessly, "Simon seems to value Marvel very much and didn't give me any room to negotiate. I also discussed 'The Lord of the Rings' with him, but it was rejected, as was 'Run Lola Run', for which he had already bundled and sold the merchandising rights.
Coincidentally, the company recently greenlit a live-action 'Teenage Mutant Ninja Turtles' movie. After researching it, I found that its character designs were very suitable for adaptation into a side-scrolling fighting game. After contacting Mirage Studios, they hadn't yet sold the game development rights for 'Teenage Mutant Ninja Turtles', so I bought them".
Iger wasn't familiar with the video game industry, and since Nancy had already considered the issues he could think of in a short time, he didn't offer any opinions rashly.
They chatted for a few more minutes, and it was already noon, so they went to a nearby restaurant for lunch.
Having recently completed the investment in Blockbuster, Nancy quickly presented another proposal, which once again put considerable pressure on Amy.
Amy had actually considered venturing into video game development but hadn't had the time to push it forward.
Now, Nancy had presented this plan, and the established game studio would be affiliated with the consumer products division, rather than being a direct company department like Daenerys Visual Effects or Pixar Animation.
If successful, Nancy would undoubtedly receive the most credit.
Even if it failed, a loss of $2 million was inconsequential for Daenerys Entertainment at this point.
Therefore, during lunch, although she tried her best not to show it, Amy inevitably seemed more affectionate towards Iger.
The mild-mannered Iger was far from Nancy's energetic and aggressive demeanour.
Clearly, Amy couldn't have known Simon's expectations for Iger.
The revenue scale of the consumer products division managed by Nancy, even after several more years of development, would still be far from comparable to the television division.
Moreover, the consumer products division was located in Los Angeles, destined to be constantly constrained by the parent company, while Iger, who solely led the television division on the East Coast, was entirely a 'regional magnate' level existence.
After some casual small talk and pleasantries, they quickly turned to work, even though they were still having lunch.
Daenerys Entertainment's television production was mainly on the West Coast, and with the upcoming TV spring season, Iger would once again begin his weekly flight schedule to Los Angeles.
This trip, in addition to preparing several TV series, also involved more important matters.
"Regarding 'Who Wants to Be a Millionaire?', Tom invited me to lunch yesterday and we discussed it in detail.
He said that if we're unwilling to make concessions, ABC can only reduce the number of episodes ordered for the second season and adjust the broadcast time slot", Iger said, noticing Nancy's puzzled look, and explained, "ABC Chairman, Tom Murphy".
Nancy nodded, not responding.
Amy asked, "What are the conditions?"
Iger replied, "The quote per episode will be halved, and ABC also wants to participate in the revenue sharing from in-program advertising placements".
Amy immediately frowned and said, "This, Simon probably won't agree to".
Nancy looked around and couldn't help but ask Iger, "Bob, what is our profit on 'Who Wants to Be a Millionaire?'"
As the head of the consumer products division, Nancy was well aware of the revenue data for 'Who Wants to Be a Millionaire' merchandise.
However, the company's annual financial audit had not yet concluded, so she didn't know the overall revenue and profit scale of this phenomenal hit reality show.
Iger, facing Nancy's inquiry, did not hide anything, saying, "According to last year's financial data, it was around $180 million. If we calculate the entire first season, it's approximately $250 million".
Nancy's eyes widened a bit, and her red lips parted slightly.
She thought she might have misheard, or Iger had explained it incorrectly, so she pressed, "Total revenue?"
Iger shook his head: "Net profit".
Nancy always thought nothing could surprise her, but this time she couldn't help but take a deep breath.
Slowly exhaling a large breath, she still couldn't quite believe it, staring intently at Iger and saying, "$250 million, how is that possible?"
Making a beautiful woman show surprise is quite satisfying for a man's vanity, and Iger smiled as he patiently explained, "Compared to TV series that only have about 13 or 26 episodes per season, 'Who Wants to Be a Millionaire?' has 69 episodes in a season, with each episode priced at $2 million.
For the first season of 'Who Wants to Be a Millionaire?', according to the settlement rules we negotiated with ABC, after the winter hiatus last year, ABC has already paid us $83 million for the first season's purchase fee, plus $30 million for the additional 15 pre-season episodes, bringing this portion of revenue alone to $110 million.
In addition, the total revenue from in-program advertising placements was $56 million, and syndication distribution and overseas licensing revenue was approximately $27 million".
Nancy listened intently and quickly reported the final statistics: "Total revenue amounts to $196 million, with a net profit of $180 million, which is indeed very reasonable.
Oh my god, no wonder our young boss is so extravagant, yet the financial situation of his two companies has never had problems; he's just too good at making money".
However, as she delved deeper into her thoughts, Nancy immediately discovered a problem.
As far as she knew, NBC was the best-performing of the four major television networks.
The fiscal year cycles for the four major networks generally start from the last quarter of each year.
According to General Electric's publicly available financial data, affected by last year's writers' strike, NBC's total revenue for the 1987-1988 fiscal year was $3.3 billion, but its net profit was only $310 million, a significant drop from $380 million in the previous year, with a profit margin of less than 10%.
After careful consideration, Nancy confirmed that 'Who Wants to Be a Millionaire?' could bring Daenerys Entertainment $250 million in net profit per season, and there was nothing wrong with that.
Television networks operate seven days a week, and the total number of prime-time programs is roughly twenty to thirty.
However, just like the films produced by Hollywood studios each year, these TV programs are certainly a small portion that are profitable or loss-making, with most generally breaking even.
Coupled with the enormous basic operating expenses of a national television network, overall, being able to earn $310 million a year like NBC is already very commendable.
Looking at 'Who Wants to Be a Millionaire?', this program occupied the most prime three 8 PM slots out of seven days a week, and it was an hour-long program.
Due to its phenomenal viewership data, its advertising revenue scale was entirely comparable to the most profitable blockbuster films with over $100 million at the box office that studios earn each year.
Compared to ABC's comprehensive investment in operating a national television network, as the producer, Daenerys Entertainment only needed to bear production costs totalling around $20 million and a small amount of initial marketing expenses.
Thus, for Daenerys Entertainment, the total revenue brought by the first season of 'Who Wants to Be a Millionaire?' was approximately $280 million, less than 10% of the network's annual revenue.
However, like a super-successful low-cost, high-grossing film, Daenerys Entertainment's profit margin on this program was nearly 90%.
Occupying the best resources, taking the most generous profits, and not having to share ABC's massive operating expenses and loss-making project costs, Daenerys Entertainment naturally made money hand over fist.
Thinking of this, Nancy quickly asked Iger again, "Bob, how much can ABC earn from this project?"
Iger thought for a moment and said, "If we only count this one program, roughly $80 million."
Upon hearing this, Nancy's gaze swept between Amy and Iger, and she pulled the corners of her mouth into a silent, strange grimace.
Amy and Iger also exchanged glances, speechless.
Daenerys Entertainment raked in $250 million, while ABC, as the platform owner, which should have been in a strong position, only had a profit margin of $80 million, less than one-third of Daenerys Entertainment's.
Anyone would be furious.
Tom Murphy was able to patiently negotiate with Daenerys Entertainment mainly because ABC simply couldn't do without 'Who Wants to Be a Millionaire?'.
Although the average viewership data for individual programs was firmly suppressed by 'Survivor,' 'Who Wants to Be a Millionaire?' aired three times a week, compared to 'Survivor's 13 episodes per season.
Thanks to the super-high viewership data of 'Who Wants to Be a Millionaire?', ABC, which was originally only slightly stronger than the emerging Fox among the four major networks in terms of overall viewership share, after last year's fall season, had subtly shown signs of surpassing the number one NBC network.
In such a favourable situation, ABC certainly wouldn't dare to rashly abandon 'Who Wants to Be a Millionaire?'.
But at the same time, if Daenerys Entertainment was unwilling to compromise, in a situation of severely imbalanced profit distribution, as long as ABC's management had some foresight, the network would definitely try to break free from its dependence on 'Who Wants to Be a Millionaire?' at all costs.
Everyone was silent for a moment, then Amy finally said, "This matter still needs Simon to decide personally, Bob, talk to ABC again, and then write a report and send it to Melbourne".
Iger nodded.
The matter was significant, and for now, this was the only way.