[Chapter 152: Opening Day Box Office and Miramax's Value]
At 12:30 AM, Levitt called again with good news. The Shallows had earned $5.42 million on its Friday opening day. Including the midnight screenings which brought in an additional $640,000, the total was $6.06 million, securing the top spot at the box office that day.
In second place was last week's release, Indecent Proposal, with $3.87 million in box office receipts. Third place was Fit to Kil, also released that day, earning $2.84 million.
Though the opening exceeded expectations, what was especially notable was that none of the films released at the same time could genuinely compete. Levitt said they would further communicate with the theater chains to secure more screenings.
With such huge positive momentum, the fairy immediately bounced back fully charged, launching a fresh offensive with even sexier moves...
...
The next day, Cameron went to Universal energized, planning to join director Zack and Universal's staff for a promotional tour across major cities.
Linton was swimming leisurely in the pool when Robert arrived at the estate carrying a thick folder.
"Boss, The Shallows's opening day box office was a huge hit, great news!" Seeing Linton come out of the pool, Robert thoughtfully offered a towel.
"It is indeed great news. Have the production team keep in close contact with Universal's marketing department, cooperate with them to enhance the promotion, and aim for even better results. Tell them the bonuses won't be small."
"Good. You're amazing. I was worried about The Shallows at first, with Zack being a rookie director and Cameron a newcomer actress. I didn't expect the market response to be this good."
"Stop flattering me. It's mainly the crew's effort -- they made a film the audience loves." Linton knew Robert was flattering him but appreciated hearing it, smiling warmly.
"Actually, it's mainly thanks to you. You wrote the script, arranged the project, selected the director, finalized the leading role, and were also co-producer. You even put effort into assembling the crew and had a cameo yourself. So the success of The Shallows is undeniably mostly yours -- at least 60%."
What a way for Robert to flatter! Linton felt pleased yet knew he couldn't foster a culture of flattery in the company.
He wanted to reprimand him but ended up saying, "Alright, let's stop with such words in the future. They don't look good. Let Meena take you to the study for a bit. I'll change my clothes and be right there."
...
"What is it?" In the study, after Meena brought coffee, Linton asked.
"This is the detailed information on Miramax, from a third-party research firm." Robert handed over the folder.
"Oh, highlight the key points."
"Miramax's most valuable asset right now is their distribution network. After fourteen years of development, their North American distribution system is very comprehensive, capable of pushing films into all major mainstream and art house theaters across North America. Its estimated value is $23 million."
"Their distribution network is good. Among Hollywood's Big Seven, probably only New Line can compare."
"The second valuable asset is their ownership of rights to 130 films, including Oscar-winning titles like Sex, Lies, and Videotape, Cinema Paradiso, and My Left Foot. Over 60 of these were purchased from foreign markets, with North American rights only, valued at $11 million.
These are the two valuable assets; the other production units aren't worth much, and their office assets were destroyed by a major fire."
"How about liabilities?"
"There are two main liabilities. One is a $4 million bank loan. The other involves two previously produced films, The Night We Never Met and Dance Fever High. The total investment was $22 million, with Miramax only investing $5.5 million; the other $16.5 million came from outside financing.
Now that the films' prints have been destroyed by fire, the investment is lost. These financiers have applied to the court to convert their investment into debt.
Those two liabilities together total $20.5 million."
"So the net value is about $12.5 million?"
"In theory, yes, but it depends on whether there are competing buyers and their offers."
"Are there any buyers yet?"
"Several have submitted acquisition offers. The strongest competitors are Disney and Fox. Other offers come from smaller Hollywood indie companies, though their bids are unknown."
"What do you suggest?"
"Miramax still holds significant acquisition value for us. Owning them would let us fully handle North American distribution for our films, which is very profitable.
More importantly, their industry status is exceptional. Distribution companies hold a higher position than production studios, upstream in the film industry, and every production house relies on them.
Since you had plans to enter distribution before, I think now is a perfect opportunity."
"It's a good choice. What do you think is a fair offer?"
"Based on company valuation, it's theoretically worth $12.5 million. But with many competitors, there will be a premium.
I suggest we initially offer $12.5 million, no premium yet, and express acquisition intent to Miramax. The Weinstein brothers will probably approach us, likely trying to pit the bidding companies against each other to drive up the price."
"Okay, let's do that. You and Goodman prepare an acquisition proposal and formally approach Miramax. The price can be raised moderately, but I have one condition: after acquisition, offer the Weinstein brothers two choices.
First, to continue working at the company for at least three years without guaranteed positions. Second, to take a buyout but must sign a non-compete agreement not to work in film or TV production and distribution for three years."
"Got it, but they might find it hard to accept this."
"It's necessary. Disney and Fox will probably have similar conditions. You have to understand, their most valuable asset is their distribution network, reliant on their distribution team. Without this restriction, the brothers could take the team and start their own company, leaving us with the short end of the stick."
In reality, in the original timeline, Miramax was bought by Disney in 1993. In 2005, Harvey and Bob Weinstein clashed with Disney chairman Michael Eisner, faced suppression, were forced to leave Miramax, relinquished their Disney and Miramax shares, and immediately set up The Weinstein Company with former staff members drawn from Miramax.
"Yeah, boss, you really thought this through."
*****
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