Chinese Entertainment: Starting from 1996

Chapter 519: Funding
It is February now, and the second season of "The Voice of China" has actually started.

Auditions are currently being prepared. Due to the huge success and adequate publicity of the first season, the number of people who want to sign up for The Voice of China has increased several times compared to the first season.

The excitement is no less than the audition scenes after the Super Boy and Super Girl competitions became popular.

"The Voice of China" is somewhat different from the auditions for Super Boy and Super Girl. The latter is divided into different regions, and each region competes against each other and then advances to the finals.

While the former is said to be an audition, in fact the program team organizes people to go to all parts of the country to select suitable candidates to participate in the program recording.

Since the first season was not very famous, the production team was able to really select some talented contestants to participate in the subsequent program recordings.

But now that the show is so popular, if this kind of audition method is not controlled, it will inevitably be filled with people with connections. At that time, "The Voice of China" will still become a game of capital like in the original time and space.

It is certainly unavoidable that people with connections have connections, and that doesn’t mean that all people with connections have no power.

In the auditions for the second season of The Voice of China, half of the contestants were selected based on their connections, while the other half followed the audition model of Super Girl, where contestants were selected through various competition areas to participate in the recording.

Although this gives more opportunities to civilian singers, it also increases the workload of the program team several times.

Therefore, the preparations for the second season of "The Voice of China" began after the end of the first season.

In addition to the busy preparations for the auditions, the most important thing is of course the negotiations with Zhejiang Satellite TV.

Zhejiang Provincial Satellite TV will definitely not give up this program, otherwise it will only have one season, and it will be impossible for the TV station to gain influence.

Of course, Jiahe Production’s first partner is Zhejiang Satellite TV. After all, the cooperation in the first season was very pleasant, and if they do not cooperate with them in the second season, they will seriously offend them no matter what the reason.

So even if Zhejiang Satellite TV’s offer is slightly lower, Jiahe will still cooperate with them.

Continuing to maintain a good cooperative relationship with Zhejiang Satellite TV will also bring considerable benefits to Golden Harvest. At the very least, it will have an additional large-scale publicity platform, and its artists will have more exposure channels.

In any case, Zhejiang Provincial Satellite TV is also a first-tier TV station. The only ones that can surpass it now are Xiangnan Satellite TV and Oriental Satellite TV. Jiangsu Provincial Satellite TV and Beijing Satellite TV are also on par with it.

Therefore, if the price difference is not too big, Jiahe is not willing to break up with Zhejiang Satellite TV.

However, Zhejiang Provincial Satellite TV is self-aware and did not deliberately manipulate the situation just because it is the platform, knowing that the initiative is in the hands of the other party.

Therefore, they are actually more anxious than Golden Harvest. Before the first season ended, they had already started to negotiate with Golden Harvest about the second season.

Golden Harvest Productions was not so anxious and only started negotiations with the other party after the first season was completely completed.

Zhejiang Satellite TV was quite sincere and the offer it made was quite satisfactory to Jiahe.

The 50% advertising revenue share remains unchanged, and the cash increase is directly from the original 50 million to 100 million.

This offer was the bottom line of Zhejiang Satellite TV. Jiahe was not ungrateful. Since the other party was so sincere, they did not drag their feet and signed a contract with the other party in less than a week.

Other TV stations may be able to offer higher quotes, but they won’t be much higher, so there is no need to contact other TV stations at all.

Although Zhejiang Satellite TV paid a higher price, it will definitely make it back.

They didn't expect the first season to be so popular, so they were inevitably a bit hasty in attracting investment.

Now it is the second season and there is plenty of time, so they can do it well.

Not only advertising fees, but also other charges such as various channels will increase significantly. Never underestimate the ability of TV stations to make money.

Moreover, it is impossible for Golden Harvest to pocket all the naming and sponsorship fees for this program. In fact, this is equivalent to advertising, after all, the broadcasting platform is still someone else's TV station.

Because the first season was relatively rushed and Zhejiang Satellite TV was in need of help, it gave all the profits from this to Golden Harvest. Now it is obviously no longer possible to do so.

After all, this piece of cake is not just worth 40 or 50 million.

However, Zhejiang Provincial Satellite TV was not too greedy. After negotiations, the two sides decided to split the profits 40% to 60% with Jiahe getting 60% and the other party getting 40%.

This time, the title sponsor and sponsors will be recruited by two companies together. There will be only one title sponsor, but there will not be only three sponsors like last time.

According to the plan agreed upon by both parties, sponsors will be divided into different tiers with different prices, and a total of 24 sponsors will be included.

Now Jiahe still has to have some dignity and does not want the quality of the program to be affected by too many advertisements. If it were to follow the Zhejiang Provincial Satellite TV's intention, it would have to recruit at least more than 30 sponsors, and by then even Hua Shao's lung capacity might not be enough.

In fact, even the revenue from one title sponsor and twenty-four sponsors is already not low. A conservative estimate is at least over 150 million.

Facts have proved that this was indeed a conservative estimate. In the end, the total revenue was as high as 2.1 million yuan, of which the main sponsorship fee was million yuan.

The title sponsor for the second season was again taken by Pepsi, apparently they also tasted the sweetness in the first season.

Pepsi has always been willing to spend money on advertising; otherwise, it would not have been able to grow from a small beverage factory to a beverage giant comparable to Coca-Cola.

Being able to get so much money is also thanks to Zhejiang Satellite TV. As for commercial resources, it depends on the TV station. Jiahe’s commercial resources are actually not few, and it is unique among domestic film and television companies, but compared with TV stations, it is still dwarfed.

Therefore, cooperation can create greater benefits.

Add the 100 million from Zhejiang Satellite TV, and the 60% of the naming fee and sponsorship fee that Jiahe will get, which is 120 million.

In other words, before the second season of "The Voice of China" even started recording, Golden Harvest Productions had already earned 2.2 million yuan.

Of course, the 2.2 million yuan cannot be obtained all at once, but half of it has been received as a deposit, and 1.1 million yuan has been received, which completely covers the production cost of the second season of the program.

Although the revenue of the second season has increased greatly, considering the level of Zhejiang Provincial Satellite TV, Jiahe can get at least 100 million yuan from the advertising revenue this time.

If the online copyright fees for the second season are added, Golden Harvest’s total revenue from the second season of “The Voice of China” may reach 400 million yuan.

However, the production cost of the second season will also increase significantly.

Apart from other things, the salaries of the four mentors will be greatly increased. Liu Huan is the mainstay of the show, and he became popular again in the first season, which fully released his influence. Therefore, his salary in the second season increased by nearly one-fold to 15 million.

As the current popular superstar, Chen Yixun has become even more popular after the baptism of the first season. With the bonus of being a Hong Kong star, his salary this time is directly on par with Liu Huan, which is also 15 million.

Then there is Han Hong. She used to claim that only Nayoung could outshine her in mainland China, but she is not Nayoung after all, and her commercial attributes and popularity are relatively weak. So although she was quite famous in the first season, her pay was not high.

Through "The Voice of China", Han Hong also gained a lot of fans, his commercial value increased significantly, and his salary for the second season increased to eight million.

Yu Chengqing's pay also doubled to six million.

It can be said that Golden Harvest was also quite sincere this time, paying the four mentors a total of 44 million in remuneration.

It was precisely because the money was paid that the four of them agreed to continue the cooperation so readily.

Moreover, for them, what they gain is not just the pay from The Voice of China. After they become famous and have high traffic, they can earn even more money off the stage.

In addition to the instructors' salaries, Golden Harvest Productions also has a lot of expenses in other areas.

The venue and stage may not cost much money, but the auditions added a lot of steps and workload. In addition, the second season will definitely be more sophisticated, and the Bird's Nest is also planned to be rented for the final stage.

All these miscellaneous expenses added up will be as high as 40 to 50 million.

Therefore, the production cost of the second season of "The Voice of China" is as high as 80 to 90 million yuan. Golden Harvest has approved a budget of 100 million yuan this time, and this time it will really cost 100 million yuan.

Despite this, Jiahe's profit in the second quarter was at least 300 million yuan. If Zhejiang Satellite TV had been more generous in advertising fees, it would definitely have been more than 300 million yuan, which would have been about 100 million yuan more than the first quarter's revenue.

The production cost of 100 million yuan does not even require the use of previous self-owned funds. The deposit for Zhejiang Satellite TV, the naming rights and the sponsorship fees are enough.

The funds in Golden Harvest's production account totaled 2.2 million yuan, including the 3.2 million yuan in profits from the first quarter of The Voice of China and the million yuan allocated by the group.

In addition to the basic operating funds, Golden Harvest Productions can withdraw 300 million yuan in funds.

Now that Golden Harvest Productions is self-sufficient, it would be a waste to keep so much money in the account. All this money will be transferred to the group. After all, the group currently has two big money-making companies, namely Golden Harvest Film and Television City and cinema chain.

Not only Golden Harvest Productions, but also the profits of several other branches will be transferred to the headquarters, in addition to retaining enough funds to maintain the company's operations and major projects.

The most profitable branch of Golden Harvest Group last year was Golden Harvest Films, which had a profit of 2 billion yuan, making it the leader in the industry.

The projects that need funding this year are mainly "Painted Skin 2" and "Mojin: The Last Dragon". Production of "Aftershock" has been completed, and the funds for "The Flowers of War" and "Flying Daggers of Dragon Gate" have also been in place.

Combined with the investment in other films such as "Cold War", it should be enough to leave 500 million yuan for Golden Harvest Films.

After all, no big company would be so foolish as to invest the full amount in movies nowadays. They either have to find other companies to cooperate with them or borrow money from banks.

Jiahe’s core projects will definitely not be distributed, but banks are eager to lend money to Jiahe’s core projects.

Therefore, 500 million yuan of funds is enough to leverage several large projects, not to mention the revenue from movies released this year as a supplement.

Then, the TV drama department also had a profit of 3.3 million last year. Golden Harvest Films’ own funds are also sufficient to cope with the company’s operations and investments, so it can also put out million yuan in funds.

As for the 20 to 30 million yuan in profits of Golden Harvest Entertainment, there is no need to adjust it upwards. Starting this year, Zeng Jia also plans to sign more new people, and the company's expansion also requires more funds.

Therefore, the funds available to the group last year amounted to 2.1 billion.

Of course, this is only nominal profit. Several branches have made money, but there are also some that need to continue to invest money.

For example, the Jiahe Film and Television Base, which had an investment of 600 to 700 million yuan, was able to start this project because Jiahe provided 500 million yuan of its own funds and Hangzhou provided a loan of 1 billion yuan.

But 1.5 billion is far from enough compared to the total investment. Liu Zhou originally planned to issue additional stocks for financing. After all, the funding for the Jiahe Film and Television Base project cannot be cut off.

Now that several other branches made a lot of money last year, the film and television base’s funding problems have been greatly alleviated, and financing can be slowed down.

The construction period of a film and television base takes at least three or even four years. If Golden Harvest can guarantee such a high profit every year, it can build the film and television base with its own capabilities.

However, Liu Zhou knew that this was impossible. Last year, Golden Harvest Films had a huge explosion, and it would be difficult to be so lucky every time in the future.

But even if we cannot achieve last year’s results in the next two years, we should be able to solve some of the funding problems.

If it is still not enough by then, Liu Zhou will not raise funds but continue to borrow from the bank.

Currently, the market value of Golden Harvest is approaching the 100 billion yuan mark, and it will definitely break through this mark this year.

For a company with such a high market value, its debt is only 1 billion yuan, and its debt ratio is only 1%. Compared with those real estate companies whose debt ratios are as high as 70%, 80%, or even 80% or 90%, Jiahe Group is much healthier.

But sometimes a company having low debt doesn’t necessarily mean it’s good, just like Jiahe now, which has always relied on its own funds for development.

If it weren't for the good foundation laid in the early stages and the fact that Golden Harvest's performance had always been very good and could provide a large amount of cash, the company's development would have been affected.

Now, after Golden Harvest started the big project of Golden Harvest Film and Television Base, it is actually a bit stretched.

Funds from other branches have been drawn to fill the gaps in this project, which has actually affected the development of several other branches to a certain extent.

This is also because after its listing, Golden Harvest Group reserved enough development funds for the cinema chain company for nearly two to three years in advance.

However, in the past two years, Golden Harvest Cinemas has purchased land and started building cinemas in major cities in advance, and the funds previously reserved are almost spent, so the cinema chain will have to be allocated funds again in the second half of this year at the latest.

Therefore, this will require a large amount of funds. If we only rely on the group's profits, it will definitely not be enough. Even if it is enough, it will take several years to raise the funds.

The film and television base is fine, but the expansion of theater companies will not wait for anyone. If you miss the time, you can only lag behind others.

Now that Jiahe Group has such a low debt ratio, going to the bank for a loan can be said to be the best option. I believe they will definitely be happy to lend money to Jiahe.

(End of this chapter)