[Chapter 105: Company Formation, Silicon Valley Property Acquisition]
Upon arriving at the studio, Robert, Mary, Bella, and Goodman were already waiting. Robert had prepared the new company's structure and job requirements.
The new company was named Linton Films, focusing mainly on film production, without involving film distribution for the moment.
The company set up departments for production, finance, screenwriting, and administration; legal affairs were outsourced to Goodman's law firm.
Linton served as chairman and also director of the screenwriting department, Robert was the general manager and head of production, and Mary took charge of the finance department.
...
The key staffing focus was on the production department. Meeting Linton's target of producing 3-4 films per year, Robert planned 25 critical roles within production.
These included essential crew positions such as editors, sound engineers, and colorists.
The production department was subdivided into two teams: production and post-production, so future film post-production could be entirely completed in-house.
Finance added two people, and the screenwriting department planned for three roles.
The office handled company administration, daily reception, and front desk tasks, with four positions planned.
After discussions, Linton directed Robert to prioritize recruiting outstanding graduates from the University of Southern California's School of Cinematic Arts, especially those with proven experience as lead producers on film crews.
Robert was tasked to leverage his network at USC for recruitment.
Other positions would be advertised by Goodman; all staff were to be hired before early October.
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The new office location had been chosen nearby, renting the fifth and sixth floors of an adjacent office building, totaling 22,000 square feet.
Robert also presented the office renovation plan and a list of furniture and equipment purchases, including $2.8 million worth of state-of-the-art post-production gear.
Linton approved the plan but insisted the equipment be installed by the end of September.
Additionally, he proactively proposed buying four vehicles for the company: two Mercedes sedans (since he was a Mercedes spokesperson), one for Robert's use, another for company reception, plus a business van and a pickup truck.
Robert and Mary were to handle the purchase together, necessitating new recruitment of four drivers managed centrally by administration.
With Universal Music's $18.6 million revenue from movie merchandise settled, the studio's budget was healthy.
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Goodman was also instructed to register Linton Copyright Studio to manage film and music copyrights.
They planned to hire two people, with office space at the original Linton Studio, co-located with the fan club.
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Subsequently, Robert handed over gathered data on recent overseas full-rights transactions for North American box office hits over $100 million from the past three years.
As of 1992 last week, three films outside the Hollywood Big Seven had North American box office over $100 million.
These were Lethal Weapon 3 (North American box office $144 million, overseas full-rights transaction $61 million), Basic Instinct ($117 million box office, $46 million overseas rights), and A League of Their Own ($107 million box office, $33 million overseas rights).
In 1991, there were three such films, in 1990 just two;.They were Terminator 2: Judgment Day, The Silence of the Lambs, City Slickers, Teenage Mutant Ninja Turtles and Total Recall. Their overseas rights accounted for less than 40% of North American box office.
Linton reviewed and realized Lethal Weapon 3 had the highest ratio of overseas rights to North American box office at 42.36%.
These figures confirmed Levitt's claims: this year's overseas deal ratio was noticeably higher than prior years, and genres like action, sci-fi, and animation had better overseas sales.
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"Since Lethal Weapon 3 hit 42.36%, our Step Up's overseas rights can't be less than that. My prior requirement stands: overseas rights sales not below 42% of North American box office. Anything beyond that, the negotiation team gets a 10% commission. Think through negotiation strategies carefully; talks should begin in early October."
Robert's team nodded confidently.
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After the meeting, Goodman stayed behind to report to Linton, handing over documents.
"Boss, the paperwork for Linton Property Management is done."
Thanks to Linton's increasing business volume, Goodman earned a handsome income and recently resigned from his old firm to start his own law office, serving Linton exclusively.
"Also, three candidates were headhunted for the property management company manager position. Their backgrounds and work histories checked out. When can you interview them?"
"Tomorrow morning. Let's nail this down quickly. We'll have to rely on them to set up the real estate company and put it into operation as soon as possible. Let Winnie join us then."
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In the afternoon, accompanied by Winnie and Henry, Linton inspected five office buildings in Silicon Valley for acquisition.
Winnie had a good eye: locations, building structure, floor area ratio, landscaping, parking, and current occupancy rates were all favorable.
Thanks to the recent LA riots, some companies went bankrupt; banks reclaimed assets, resulting in many quality office buildings on sale.
The combined price for the five buildings settled at $35.8 million, which pleased Linton.
Contracts were signed with two real estate firms that afternoon.
As usual, they put 30% down, $10.74 million, financing the rest with a 10-year bank loan.
Winnie was tasked with handling property title transfer.
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After signing, Linton, Winnie, and Henry met at the charity foundation office to discuss further investments.
Universal's swift action saw $38.4 million deposited into their bank account by afternoon.
For tax reasons, after calculation, Henry recommended donating $25 million to the charity foundation and retaining the balance under Linton's name for future expenses.
Linton considered: with so many women in his life, keeping some liquid money was sensible; he already owned an estate, and he wanted a plane, and a yacht, though purchases for these two would wait. Now wasn't the time for showboating -- he'd invest in computing and communications, sectors ripe for huge future returns.
Plus, continuous earnings from endorsements made this pragmatic.
He finally decided to transfer $35 million to charity, leaving $3.44 million in his personal account. Winnie and Henry were impressed; Winnie's eyes sparkled.
Though already investing $50 million in Silicon Valley office real estate, Linton planned to focus on tech and communications for next investments.
He assigned Winnie to find investment targets in those industries and develop a plan for his approval.
He believed that if an enterprise was truly impressive, he would recognize the name and business scope.
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At the charity office, Linton, Goodman, and Winnie formed an interview panel for the three headhunted candidates.
They selected Edward Lister, a 35-year-old white male who had worked in major real estate before and managed departments at Silicon Valley property mogul Garrett's firm.
After using Soul Induction to ensure Edward had no hidden agenda, they offered him a $200,000 annual salary.
Once hired and under confidentiality agreement, Linton gave him company and property information.
Edward was to produce the company structure and staffing plan for Linton's approval and choose office space from the seven buildings.
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That afternoon, Linton dove into Universal's editing room.
With editor Juliet's help, in just one and a half days, Linton comfortably cut the Step Up Director's Cut.
The Director's Cut ran 122 minutes, adding five minutes of Linton's difficult full-length street dance sequence, plus 6-7 minutes of scenes previously cut for length.
Additionally, about ten minutes of behind-the-scenes footage was included.
A "Do Not Try This At Home" subtitle remained in the bottom right corner during the five-minute dance.
After the Director's Cut was edited, Levitt organized a group of young employees from the distribution department to watch it. After viewing, they raved about its quality, most saying they'd pay an extra $10 for this version.
Levitt suggested pricing the standard VHS at $28.80 and the Director's Cut at $38.80, pending final negotiations with VHS distribution license holders.
Linton left subsequent matters to others; after over two months of nonstop work, he deserved a break.
Besides, two beauties awaited at his estate, and with a sizable recent payment from Universal, a vacation with Winona and Shania sounded perfect.
*****
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