America: My Time

Chapter 19 Global
Chapter Nineteen: Global
“John, have you considered the risks involved? Futures trading is different from other instruments. If the volatility is too high, and your leverage is too great, it could easily collapse instantly. Do you think it's worth taking that risk? Investing your existing funds into the company's development would save you a lot of time and energy, and you wouldn't have so many constraints! Tens of millions of dollars can rapidly expand any business, whether it's a music company, a publishing house, or even your animation company. I remember you said the toy company needs animation support. If you invest that money, you won't need to wait any longer; you can directly achieve IP sharing!”

Although John had plans and ideas, as a father, Smith still wanted to persuade him to give up trading in the gold futures market, as the risks involved were too great. In his view, John didn't need to take such a risk; if he really wanted to test his judgment, there was no need to use such a large amount of capital and such high leverage!
John nodded slightly and said, "I've thought about it. The futures market is indeed very risky; a slight mistake can lead to a margin call. But I still want to give it a try. I've also considered the consequences of failure, but it's really not a big deal—just a little bit of capital. My real businesses—Phoenix Comics & Animation, Legendary Entertainment, the game company, and Dream World Software—are my foundation! However, if my gold futures plan succeeds, I can accumulate the capital needed for expansion in the shortest amount of time, making my foundation more solid, and perhaps even becoming an industry giant!"

Funding for expansion is crucial, and timing is also critical for those looking to establish a presence in the media and entertainment industry. Currently, the entertainment industry is experiencing a downturn; however, once these few years pass, the market value of entertainment companies will skyrocket and never recover.

He wanted to acquire Universal's parent company and NBC in the shortest possible time. In the early 80s, Universal's parent company was valued at $20 billion, but by the 90s it had reached $65 billion. This wasn't even the biggest increase; the real power lay in American television networks. In the 80s, public television stations were valued at only two or three billion dollars, but by the 90s, their market capitalization exceeded ten billion dollars.

If this gold futures deal is a huge success, I will have enough funds to acquire Universal or NBC television networks, successfully stepping into the top of the entertainment market and becoming one of the Hollywood giants. Then I won't have to worry about the suppression from giants like Warner.

By securing control of one of Hollywood's seven major studios, Universal, and leveraging their already lucrative film portfolio, they can accumulate substantial funds in a short period and eventually acquire NBC! A head start is crucial for future success; seizing the initiative is paramount!
After taking a deep breath, John continued, "Father, how long do you think it would take for me, with my current strength, to take over Universal? I'm not referring to Universal Pictures, but its parent company. Although the comic book industry is very good and generates decent revenue every year, taking over Universal would require at least several years of accumulation, and many unforeseen events can happen during that time. I don't want any unforeseen events to occur. As long as this futures plan succeeds, we'll have a chance to take over Universal!"

"What? You want to take over Global? Do you know how high the market value of Global's parent company is? Do you understand how complex such a company is?" John's words shocked Smith. This ambition was too great, too great for Smith to believe.

“John, your father is right. You shouldn’t be so ambitious now. You need to be down-to-earth and solidify your foundation instead of trying to reach the top in one step. No matter how ambitious you are in the entertainment industry, you shouldn’t try to take over industry giants like the Big Seven Hollywoods right from the start!”

"Mom, I know your worries, that you're afraid I can't handle a big company like Universal. I've never even considered taking it over myself. When it comes to understanding entertainment, you don't know as much as I do. To achieve great success in the film industry, starting with small films and small companies presents far greater obstacles than directly taking over one of the Big Seven. Only by truly controlling one of the Big Seven can you have the initiative. I can hire professional managers for company management, but taking over Universal will save me a lot of time and energy. Among the seven Hollywood giants, Universal is the most suitable!"

Universal's parent company, MCA Corporation, includes Universal Pictures, MCA Television Group, MCA Home Video and Pay TV, MCA Recording, Putman Publishing, a 40% stake in Cineplex Odeon, Universal Amphitheatre, a 50% stake in USA Cable, Universal's vast film and television archive, and of course, Universal Studios theme parks!
John knew how profitable theme parks would be. While Disney was likely the most profitable, Disney wasn't the right fit for him. He couldn't possibly acquire Disneyland by buying Disney Studios; for roughly the same price, Universal was the most comprehensive and suitable option. What suited him best was the best choice.

"John, have you thought about how to take control of Universal? A publicly traded company is far more complicated than you think. Although I don't know much about entertainment, the North American film market hasn't been doing well in recent years. If something goes wrong, you'll be in big trouble!"

"I've thought about it. If we successfully acquire Universal's parent company, we should act swiftly and decisively, splitting it up directly. The reason Universal has consistently been losing money is mainly because it's involved in too many things. Film production should be film production; it shouldn't be involved in too many other businesses. Television production should be spun off, as should music, publishing, and television networks. Universal will only retain its film production and theme parks!"

“John, your ambition is too great. Now I understand your plan. If Universal's parent company truly controls so many businesses, it is indeed your best choice to enter the entertainment market, provided you can manage it. I believe that if you were to acquire Universal, it would be a full acquisition, delisting Universal so you could directly split it up and merge it with your existing music and publishing businesses. But have you considered how long it would take for such a split to recover the company's vitality?” “Father, I think you've misunderstood something. The entertainment industry is different from other industries; it's a winner-takes-all market. As long as you have good enough works, you can sweep the entire market, provided you control one of the Big Seven. Only the Big Seven companies have this possibility. No matter how good other companies' works are, they will be blocked by the Big Seven in terms of distribution, and the lion's share will be taken by the distributors. As for my creative abilities, I believe you should know them. The achievements of Phoenix Comics speak for themselves, as do the Millionaire project and my best-selling books!”

Smith and Anna had no objection to John's creative abilities; Phoenix Comics' track record spoke for itself. However, they believed that John's ambitions were too great. A mere eighteen-year-old wanting to control a giant like Universal, one of the seven major Hollywood studios, made them fear that John would once again lose himself.

"Alright, I hope your idea is correct. Since you want to control a Hollywood giant like Universal, we will naturally support you. However, we need to make it clear first that you can only use the funds you have reserved in the futures market, and you cannot withdraw funds from other companies. As long as you can do this, we will grant your request!"

In the end, Smith relented. He wanted to see if John had the ability and insight to succeed in the futures market. Perhaps, as he had said before, John was still young, had time to prove himself, and could afford to fail!

Anna wanted to say something, but before she could speak, Smith stopped her. The genius's stubbornness made Smith unwilling to continue to dwell on this issue, lest he arouse John's obsession, which would be even more detrimental to John's development. Smith did not want to see such a situation happen!

Faced with his father's request, John did not hesitate and immediately said, "Okay, I'm willing to accept. No matter how much the gold futures market fluctuates, I will not use the funds of other companies. I will only use the funds I have reserved before to operate, and it will not affect the development of other companies!"

Giving up using other companies' funds to operate in the gold futures market would result in a significant loss of profits, but John was also well aware that too much of anything is bad. He was just an eighteen-year-old and needed to know when to stop. He couldn't just do whatever he wanted. The futures market wasn't always smooth sailing, and even if he had a knack for it, he had to be careful. It was best to be cautious on his first attempt and not be too arrogant.

"Very good. I'm relieved to hear your promise. As long as you can keep it, your mother and I won't be an obstacle to you. Perhaps we have different opinions, but we hope you can go further! Now is your time to prove yourself. As long as you succeed in the gold futures market, you can develop according to your own wishes. Even if you want to acquire Global, we won't stop you. In fact, we will give you strong support!"

Even if John isn't capable of controlling a Hollywood giant like Universal in the early stages, the family will fully support the acquisition. After all, it's a Hollywood giant with immense influence, a force that no one can ignore! Losing some money in the first few years isn't unacceptable; influence is the most important thing!
Losing money? No, that's impossible for someone with the golden touch; it's just a matter of how much they'll make. If, upon taking over Universal, they were determined to dismantle everything from the parent company, turning the tide wouldn't be impossible. A little short-term turmoil and loss is nothing. For a listed company like this, a purge is the best option!

Outsiders worry about being scammed, about potential problems, or about big trouble, but John sees none of that as a problem. Entertainment like film and television is a winner-takes-all market; having good enough work is the foundation for success.

(End of this chapter)