Hollywood starts with an agent

Chapter 54: Using the Issuance Contract to Obtain a Loan
Sidney Ganis was also in charge of the production department at Columbia Pictures and had his eyes on Ghost!
Aaron smiled and said, "Thank you. Actually, Suguang is also very willing to cooperate with Sony Columbia."

Originally, Columbia and TriStar have now merged, but in recent years, the two companies must have released some films separately;
Last year's "Ghostbusters 2" and "When Harry Met Sally..." were released by Columbia;

"Flying Over Innocence" and "Love Hearing" were released by Samsung. This is due to the competition within the group and the different types of films they focus on.

"Castle Rock, you know, the producers of 'When Harry Met Sally...' have a distribution deal with us at Sony, and so does Carlock!"

"Yeah, I know, but let's talk about this movie 'Phone Booth' first."

Sidney Ganis nodded. "How about buying out the Asian distribution rights for $300 million?"

Aaron blinked. "Mr. Ganis, you should know that Phone Booth has already grossed $2800 million in North America, right?"

"It's predicted to reach $4000 million. Japan is the second largest market after North America, and there are also South Korea, Southeast Asia, Hong Kong and Taiwan."

“Is $300 million too little?”

Now that it’s released in North America, the word of mouth and box office have proven it, isn’t it before filming started?
"Aaron, you and I both know that Phone Booth won't make $4000 million at the box office, and it's estimated to only make $5 or $6 million in Asia."

"We also need to make a little money from subsequent videotapes or TV broadcasts, and that takes time!"

Aaron shook his head. "No, the ratio between Hollywood and the international market is about 4:6 right now. This kind of movie has a higher international box office."

"Asia will probably bring in between $1500 million and $2000 million, so I think $500 million is enough to sell the Asian distribution rights."

Sidney Ganis refused directly, "That's impossible, Aaron, these are just your guesses. Many movies have higher box office in North America than in the international market;"

"Besides, the largest international box office is Europe..."

Finally, after much negotiation between the two, Sidney Ganis was only willing to pay $350 million to acquire the Asian distribution rights!

"Okay, so, if Dawn Pictures plans to independently produce Ghost and have Sony Columbia distribute it, how much commission do you plan to charge?"
Sony, Castle Rock, and Carlock all have this kind of cooperation model, and so does Dawn, which is pretty good!

"In North America, we'll charge a 15% distribution commission. In the international market, Dawn Pictures can get 25% of the box office revenue."

"Sony can advance the marketing expenses and recoup them later!"

Aaron frowned. This was only slightly better than 20th Century Fox, which made concessions on international distribution.

"Mr. Ganis, you know that I was the one who pushed for Disney to develop 'Pretty Woman,' right?"

Sidney Ganis laughed. "Of course, many people know what you said to Warren Beatty!"

“So, for me, a 15% commission on distribution is too high.”

"Not really. Columbia is not an independent publisher. The distribution capabilities of the two are different."

Aaron knocked on the table. "For amounts below $5000 million, you charge a 15% commission. For amounts between $5000 million and $1 million, you charge 12%. For amounts above $1 million, you charge 10%."

"For international distribution, as you said, I'll cover the production costs myself, and Sony won't take any risks except for some publicity and promotional expenses." "I don't believe Castle Rock and Carlock won't need financing from Sony. I'm fully shouldering all the risks myself. If Sony doesn't agree, I'll propose this condition to other film companies, and I'm sure someone will agree!"

Aaron signed up for "Ghost" a long time ago just to make a big splash, and it will take off immediately after it is released next year.

Sidney Ganis thought for a while. What Columbia Samsung needs now is influence. Since being acquired by Sony, facing the wealthy Japanese consortium, the most important thing is to promote Sony!

Sony's board of directors spent $2 million to poach Batman producers Peter Guber and Jon Peters from Warner Bros., using the money to acquire the shell film company they had co-founded.

Although no one can understand this approach, Sony did it anyway. Now it is being sued by Time Warner for unfair competition. In order to settle the matter, Sony compensated Warner Bros. with half of Columbia's shares in the Warner Bros. studio base.

In the early days, Columbia Pictures Group was also located in Burbank, and the current Warner Bros. Studios base in Burbank was jointly established by Columbia and Warner Bros.;
After Coca-Cola acquired Columbia Pictures, because it did not pay enough attention to the film studio base and Warner Bros. wanted to renovate the studio, Coca-Cola directly moved the Columbia Pictures Group from Burbank to the current Culver City Studio.

"Okay, Colombia agrees to your terms!"

Sidney Ganis agreed, and anyway, Peter Guber and Jon Peters, who are now running Sony Pictures Entertainment, are two eccentrics;
Although Michael Ovitz advised against inviting the two, the success of "Batman" blinded Sony's eyes.

Sony is spending money like water now. As long as the movie does well at the box office, it will be fine. Whether it makes money or not is not important.

Japanese consortiums have plenty of money, and Sony can spend a lot of money in Hollywood!

“Right decision!”

Aaron immediately stood up and extended his hand to shake hands with Sidney Ganis.

The next day, after Daniel Williams in Los Angeles saw the contract fax, Aaron Anderson signed a distribution contract for "Ghost" with Sony on behalf of Dawn Pictures.

The Asian distribution rights of "Phone Booth" were sold for 350 million US dollars, and Aaron is going to use the distribution contract of "Ghost" to borrow money from the bank!
The stock market is currently sluggish, so Wall Street's funding is actually quite abundant, and the growth of Hollywood's box office is also a reality;

There are many investment banks and institutions on Wall Street that have film investment funds specifically targeting Hollywood. Aaron took the distribution contract for "Ghost" and found a film fund of Credit Suisse First Boston.

"Mr. Anderson, you're quite famous in Hollywood right now, aren't you?"

The fund manager focuses specifically on Hollywood and has been mentioned several times in newspapers because of "Pretty Woman" and "Teenage Mutant Ninja Turtles".

"Not bad," Aaron said, taking a sip of coffee. "You've checked out the work I've handled before. The production budget for 'Ghost' is $2000 million. I'd like to use the Sony Columbia distribution contract to borrow $1500 million. Is that okay?"

The fund manager exhaled. "Mr. Anderson is going to make this film independently?"

Aaron clenched his fist, "I like to be in control of my own work!"

The fund manager shook his head. "This is Mr. Anderson's first time producing a film of this magnitude. We can only provide a maximum loan of $1200 million."

"It's a three-year loan with an annual interest rate of 9%. As you know, with banks tightening their belts and the economy in recession, 9% is considered low."

The interest for one year would be $108 million. Aaron nodded!

(End of this chapter)