Entertainment mogul: Starting his business with the internet

Chapter 362 Three Major Resources
Tengda Culture, President's Office.

Liu Rong rubbed her temples with her fingertips, looking exhausted: "Is everything settled?"

Across from him, Zeng Jia nodded slightly: "Everything has been taken care of. The investment has been withdrawn as you instructed. But Mr. Liu..."

Liu Rong interrupted sharply, leaving no room for argument: "No buts! These films, 'The Assassins,' were projects personally halted by Chairman Song, and there is absolutely no room for negotiation."

"I understand, Mr. Liu." Zeng Jia sighed helplessly. With Tengda Culture withdrawing its investment in these films, her entire first half of the year had been a waste of time.

"What's there for you to be sighing about!" Liu Rong snorted coldly, "Do you know how embarrassed I was standing on the stage when I reported on these projects at the semi-annual meeting that day, and Chairman Song just called it a 'rotten movie'?"

Recalling that day, Liu Rong still feels annoyed. Fortunately, Zhang Heng, the president of Qianqian Music, was there to protect her; otherwise, she might have been the one facing the chairman's wrath.

Zeng Jia quickly bowed his head and admitted his mistake: "It was our fault for not being rigorous enough in the early assessment and for not controlling the project properly, which has caused you trouble!"

"From today onwards, all company projects with an investment of over 1000 million yuan must be personally approved by me!"

Zeng Jia was shocked. She never expected that the chairman's rejection of these projects would cause Liu Rong to lose trust in her, which greatly weakened her project review authority.

After giving Zeng Jia a warning, Liu Rong turned his attention to another vice president of Tengda Culture: "President Zhuang, have the revenue figures for January to August been released yet?"

"Just finished compiling the data."

"What's the overall situation?"

"The film segment declined year-on-year, but thanks to the huge success of the two TV series 'Palace' and 'Temptation to Go Home' in the first half of the year, the TV series segment's profits doubled, resulting in positive overall profit growth."

Liu Rong's expression softened slightly: "The film and television industry is booming right now, so the company's profits this year must increase by more than 25% compared to last year."

Zhuang Liqi quickly calculated the company's profit margin for the fourth quarter: "As long as the films produced by the company do not suffer huge losses, a 25% increase in profits should not be a problem."

Zeng Jia added at the opportune moment: "The company has two more big films to release by the end of the year, 'Painted Skin' and 'Flying Swords of Dragon Gate,' and the market predicts that the box office will not be bad."

"That's good!" Liu Rong nodded slightly. Both of these films were projects left by Zhang Zhao before she took office, and their box office success or failure was not under her control.

"Knock knock knock!" The secretary gently knocked on the door: "Mr. Liu, everyone is here, and the meeting can begin at any time."

"Understood!" Liu Rong stood up and straightened her clothes. "President Zhuang, President Zeng, let's start the meeting."

The three moved into the conference room, where a rare gathering of stars from Tengda Culture were chatting. Upon seeing the company executives arrive, several of the big stars stood up to greet them.

Liu Rong raised her hand to gesture for everyone to sit down: "I have gathered you all here today to announce a very important decision."

Inside the meeting room, as Qiao Zhengyu, Yang Mi, and Wang Luodan speculated about what new policies the new president would introduce, Liu Rong's gaze fell on Yang Tianzhen, the artist director.

“Tianzhen, you don’t need to investigate that matter anymore. I’ve already turned down Zhang Guoli.”

Yang Tianzhen was taken aback upon hearing this. A few days ago, the president told her that Zhang Guoli intended to sign his son Zhang Mo to Tengda Culture and instructed her to investigate Zhang Mo's character.

Unexpectedly, just as she began her investigation, Liu Rong suddenly changed her mind and refused to participate.

"From now on, the company must conduct rigorous investigations before signing any new artists," Liu Rong solemnly instructed, her thoughts drifting back to a few days ago.

It was quite a coincidence that a few days ago, when she was discussing business with Zhang Zhao, she casually mentioned Zhang Mo.

Zhang Zhao, who had been in Beiping for a long time and was well-informed, recalled some rumors and suggested that Liu Rong consult the paparazzi Wang Zhuowei, who might have unexpected insights.

Liu Rong was initially skeptical. She and the paparazzi Wang were complete strangers, so why would he reveal inside information to her?

After tentatively contacting Zhuo Wei, Zhang Mo was surprised to find that Zhuo Wei immediately told him not to sign the contract, because he had encountered that taboo before.

These few words shocked Liu Rong. If Zhang Mo were signed to the company, it would inevitably have a very bad impact on Tengda's image when the truth came out! Feeling extremely fortunate, she asked Zhuo Wei why he had helped her.

Zhuo Wei just smiled mysteriously and said, "Mr. Liu, in our line of work, if you can survive, you must have a powerful figure protecting you. You're a smart man, so you know what I mean."

With Yang Tianzhen's agreement, Liu Rong gathered her thoughts, looked around, and began today's main topic.

"We have some good news to announce. With the booming development of the film and television industry, many film and television companies are implementing equity incentive policies to achieve win-win cooperation with their stars."

Although Tengda Culture is a subsidiary of the group, it does not currently have plans for an independent listing.

However, after fully considering current industry trends and with the group's approval, the company has decided to implement a virtual equity system. You are all among the first to enjoy this virtual equity!

As soon as he finished speaking, the celebrities present began to whisper among themselves, surprised that the company would give them such a pleasant surprise.

Liu Rong slowly took a sip of tea, seemingly giving the company's artists ample time to digest it.

As the entertainment industry becomes increasingly prosperous, top-tier celebrities are establishing studios or film and television companies, launching an assault on capital.

Major companies in the industry are also using various methods to bind top celebrities with equity incentives, project investment rights, and premium equity investments.

Tengda Culture also followed market trends and created a virtual equity incentive plan, precisely to establish a long-term interest relationship with its core artists.

As the company's top star, Qiao Zhengyu, representing all the artists, asked, "President Liu, could you please give us a detailed explanation of the rules regarding virtual equity?"

Liu Rong explained, "Virtual shares enjoy the right to dividends and the right to appreciation, but do not involve voting rights, transfer rights, or inheritance rights. If you leave Tengda one day, the company will repurchase them at the market price."

The virtual shares require you to subscribe with funds, but don't worry, the internal price is very cheap; you can refer to Huayi's previous internal subscription.

After Liu Rong explained it this way, everyone generally understood that the main benefit of virtual equity was the ability to enjoy profit dividends from Tengda Culture every year. The company's net profit in 2010 was 380 million yuan, and if one subscribed to 1%, they would receive 3.8 million yuan in dividends annually.

"The company will set its total share capital at 1 million shares, and will allocate 20% for virtual equity incentives, with a subscription price of 10 yuan per share. I will send you the specific details after the meeting."

Several celebrities quickly calculated in their minds that, based on this pricing, Tengda Culture's total valuation was only 10 billion yuan. Compared with the market value of listed companies such as Huayi, the internal subscription price was practically a "fire sale".

Based on the company's current profit level, the investment can be recouped in about two years, yielding considerable returns, which is indeed a company welfare policy. However, the problem lies in the fact that virtual equity cannot be cashed out, and subscribing to 1% equity requires paying 1000 million yuan in cash, which is not a small amount for celebrities.

"You have a week to think it over," Liu Rong interrupted their deep thoughts. "Next, I have the second thing to announce."

The group perked up, temporarily putting the equity subscription issue aside, and looked intently at the president.

Liu Rong smiled and said in a light tone, "Starting next year, the company will implement a business partnership system. For some projects developed by the company, you will receive project shares by investing or contributing resources."

Qiao Zhengyu eagerly followed up, "President Liu, regarding the company's film and television projects, if I invest, can my studio participate in the production and development?"

Wang Luodan, who had also established her own studio, looked at Liu Rong with great interest. If her studio could participate in the company's film and television project development and accumulate production experience, it could quickly transform into a real film and television company.

Liu Rong nodded solemnly in confirmation: "The projects you invest in will have a certain say in casting and personnel selection, and you can recommend candidates to producers and directors."

Qiao Zhengyu was overjoyed, believing that this business partnership system was Tengda Culture's greatest support for the company's artists.

Being able to participate in project development and have the right to make personnel recommendations means that his studio can independently sign artists, carry out artist management business, and no longer have to worry about insufficient resources to support newcomers.

Yang Mi, Lü Yi, Wang Kai, and Zhang Songwen were all equally excited and couldn't wait to set up their own studios. Who doesn't dream of being their own boss?
Zhao Liying sat quietly to the side, shaking her head slightly, feeling that Yang Mi and the others had been blinded by the company's partnership system.

Of the company's artists, only Yang Zi and Chen Xiao are not yet big enough to independently operate a studio, so they can view this system more calmly.

Benefits and risks are always commensurate. Sharing benefits means sharing risks.

Tengda Culture doesn't guarantee profits from every project, and she believes the company certainly wouldn't share its top-tier projects.

These celebrity studios rely on personal funding, unlike large corporations like Tengda Culture. If their investments fail, they could suffer significant financial damage and their assets could shrink drastically.

Compared to the partnership system, virtual equity incentives are the truly reliable way to ensure income regardless of circumstances.

Liu Rong's eyes gleamed as she squinted at the celebrities who were already lost in thought, and smiled faintly: "Let's end the meeting here today. Please confirm the number of shares you will subscribe for within a week, that is, before September 17th."

A week flies by.

On September 17th, the atmosphere in Tengda Culture's conference room was quite different from the last time.

Compared to a week ago when everyone was present, today the female celebrities Wang Luodan and Lü Yi were missing, and the male celebrity Wang Kai was the only one present.

There were no more than five people in the meeting room, including Liu Rong.

“All four of you have subscribed to the shares at the maximum allowed per person.” Liu Rong’s gaze swept over you with satisfaction, a smile of approval appearing on her face. “Although the company does not mandate subscriptions, your ability to subscribe in full shows that you have full confidence in the future of Tengda Culture.”

For this virtual equity subscription, Tengda Culture set different limits based on a comprehensive consideration of each artist's contribution.

The largest single investor, Qiao Zhengyu, can subscribe to 4%. Zhao Liying, on the other hand, can only subscribe to 0.6%. As for Yang Zi, who recently joined Tengda, she only has a symbolic quota of 0.1%.

Zhao Liying and Yang Zi exchanged a quick glance. They had previously analyzed the situation carefully and felt that they should subscribe to the maximum amount of company shares to demonstrate their confidence in the company's future and their loyalty.

Therefore, the two girls sold everything they owned and raised 600 million and 100 million respectively to subscribe for their maximum number of shares.

Back then, Huang Xiaoming gained the attention of the Wang brothers by subscribing to Huayi shares, and from then on, he had no shortage of resources. The two brothers also wanted to follow the same path.

"The others have big ambitions; they want to go solo and start their own companies and are unwilling to invest money in Tengda. Since they've chosen to start their own businesses, the company naturally won't invest resources in them."

If you want to start your own film and television company, you must be prepared to face market competition independently.

Liu Rong paused briefly, then sighed, "Perhaps my statement is a bit of a generalization, but I'm sorry, this is the chairman's attitude."

If you want to start your own business, stop relying on Tengda's resources. So, the four of you have passed the test.

Upon hearing this, Yang Mi's eyes flashed with surprise. She had just received 1800 million yuan in film and television fees and endorsement deals a few days ago and was worried about how to manage her finances.

Coincidentally, the company allowed her to subscribe to 1.8% of the shares, which was the same amount. Since she wasn't in a hurry to use the money, she invested it all and unexpectedly received a pleasant surprise.

Suppressing their joy, the group listened intently to Liu Rong's next words.

"In the past two years, international high-end luxury brands have paid more and more attention to the Chinese market, and the fashion industry has also begun to open its doors to mainland celebrities. The Harper's Bazaar Charity Gala at the end of this month will be jointly hosted by Weibo and Fashion Group."

The chairman personally facilitated connections with European fashion resources, inviting executives from luxury brands such as Kering and Dior to China to participate in this charity event. This can be seen as an important assessment of the mainland's elite.

Yang Mi, Zhao Liying, Yang Zi, and Wang Kai were stunned by the bombshell news dropped by Liu Rong. It's well known that high-end international brands are typically aloof and rarely favor mainland Chinese celebrities, with only a handful of them serving as brand ambassadors.

If someone were to catch the eye of a brand executive at a charity gala, even just by becoming a brand ambassador, they could boast about it in the entertainment industry for quite some time.

"Fashion resources serve as a link between celebrities and the fashion industry," Liu Rong explained. "They encompass brand collaborations, media exposure, and interactive participation, directly impacting a celebrity's public image and monetization capabilities."

In the future, fashion resources will be a crucial indicator for measuring a celebrity's commercial value and industry standing.

With a look of anticipation in her eyes, Yang Mi asked sweetly, "President Liu, do we have a chance to be featured in the top five magazines?"

"Of course!" Liu Rong answered decisively. "You are lucky. Tengda Culture not only has no shortage of television and film resources."

Now that Chairman Song has stepped in, even the most difficult-to-access fashion resources have found a way, giving them a significant head start over other celebrities in the entertainment industry.

After the Bazaar Charity Gala, as long as your performance isn't too bad, getting one or two brand ambassadorships shouldn't be a problem.

However, whether you can establish a foothold in the fashion industry depends on your own performance. If you don't live up to expectations, lack popularity and traffic, even the strongest company like Tengda Culture won't help.

Zhao Liying felt both happy and apprehensive after hearing this.

The good news is that the company truly lives up to its reputation as a top giant in the industry, with strong financial backing and the ability to access even the most scarce fashion resources in the entertainment circle.

What worries me is that I'm just a nobody in the third tier right now, and those high-end international luxury brands probably wouldn't even look at me!
(End of this chapter)