Huayu: Starting from joining the mainstream entertainment industry in 96

Chapter 481, Page 479: Seeking Acquisition
Monday, June 25, 2003, Los Angeles time.

The afternoon sun streamed through the Peninsula Hotel’s executive lounge’s huge floor-to-ceiling windows, casting its light on the gleaming mahogany table.

Wang Sheng arrived five minutes early and chose a relatively quiet corner where he could overlook the city street view.

He ordered a soda, his expression calm, but his mind was rapidly processing all the possibilities.

Avi Arad, CEO of Marvel Entertainment.

This person is known in Hollywood for his energetic personality, tough style, and almost obsessive desire to protect the copyrights of Marvel characters.

His personal meeting was not merely for pleasantries or to express approval of a few "side story" copyright transactions.

Wang Sheng speculated that the other party was likely interested in his rapidly rising influence in Hollywood and his reputation for "turning lead into gold," and wanted to explore a more significant role—perhaps the follow-up rights that Sony tightly held after the success of Spider-Man, perhaps a derivative character in the X-Men series that has not yet been fully developed, or even a reboot of a failed project, such as... Daredevil?
As my thoughts wandered, a figure walked briskly towards me, guided by a waiter.

Avi Arad himself appeared more sharp-looking than in the magazine photos, with his hair neatly combed, a well-tailored dark suit, and a sharp gaze that conveyed an eagerness to sell something.

“Mr. Wang! It’s a pleasure to finally meet you!” Arad extended his hand firmly, his smile warm but unable to hide a trace of fatigue. “The miracles you’ve created in Hollywood have put immense pressure on us old folks.”

“Mr. Arad, it’s a pleasure to meet you.” Wang Sheng stood up and shook hands with him, his tone calm. “It’s not a miracle, just good luck, plus the joint efforts of the team.”

After both parties sat down and exchanged brief pleasantries, Arad didn't beat around the bush and went straight to the point, which was in line with Wang Sheng's expected negotiation pace.

“My lord, I’ll be frank.” Arad leaned forward, placing his hands on the table. “I know that you recently bought the film rights to some characters from us, through Robert White, and from some complicated copyright legacy issues.”

Captain America, Thor, Black Widow, Hawkeye, Ant-Man, Doctor Strange, and even the Guardians of the Galaxy… This list is interesting, very interesting.

He paused, staring intently at Wang Sheng: "To be honest, after the huge success of Spider-Man (2002, produced by Sony, with a global box office of over $8 million) and X-Men (2000, Fox launched the series, which was a box office success), many companies came to us to discuss cooperation. However, they were all focused on those obviously 'hot' characters, or trying to find ways to get a share of the pie from Sony and Fox."

"You're the first person like you to be so interested in these... well, in their words, 'second-tier,' 'retro,' and even 'quirky' characters in our warehouse, and to be so quick and big-spending on them."

Wang Sheng nodded slightly, neither agreeing nor disagreeing, waiting for the other party to continue.

He realized that Arad's tone was shifting in a direction he had not anticipated.

“This forces me to think,” Arad lowered his voice, his tone almost seductive, “King, you seem to have a confidence in our entire Marvel character system that transcends the current market’s general understanding. It seems you value not just one or two isolated heroes, but a kind of… possibility?”

Wang Sheng's heart stirred, and he vaguely caught the other party's intention, but he remained silent, only signaling the other party to continue with his eyes.

Seeing that Wang Sheng didn't respond, Arad continued speaking to himself, his tone tinged with reminiscence and a barely perceptible bitterness: "We at Marvel were founded in 1939, originally called 'Times Comics.' We created the glory of Captain America, who was a national symbol during World War II, selling millions of copies; we experienced the golden age of the comic book industry, and also weathered the subsequent downturn and censorship. We have over five thousand characters! It's an incredibly rich world!"

He waved his arms, trying to depict that grand vision: "Stan Lee, Jack Kirby, Steve Ditko... those geniuses created a universe!"
A universe intertwined with our real world, yet brimming with boundless imagination.

The Avengers, Fantastic Four, X-Men, Spider-Man… these characters are intricately connected. This isn't just a single story; it's a world!

However, his tone immediately turned somber: "But, as you know, in the 90s, we encountered difficulties and even came to the brink of bankruptcy protection."

In order to survive, we had to sell the film rights to some of our most popular characters to different film companies.

Spider-Man is with Sony, X-Men and Fantastic Four are with Fox... and even some less core characters are scattered elsewhere.

We can only charge a small copyright licensing fee; the film's huge success means that the majority of the profits go to the production companies.

Wang Sheng was very clear about this.

This was precisely the most awkward situation Marvel faced in 2003.

Although its characters have begun to achieve success on the big screen, Marvel itself has not been able to reap huge profits to support its ambitions.

According to public financial reports, although Marvel turned a profit in 2002 due to licensing fees, its net profit was only in the tens of millions of US dollars, which was a drop in the ocean compared to the hundreds of millions or even billions of dollars in global box office revenue brought by movies such as Spider-Man.

Arad sighed, his gaze turning incredibly serious. He stared intently at Wang Sheng and posed that startling question: "Wang, since you value our 'scraps' so much, have you ever considered simply acquiring the entire Marvel Cinematic Universe?"

Despite having a premonition, Wang Sheng's eyelids still twitched slightly when he heard the suggestion in person.

He picked up the soda water, took a small sip, and used it to calm the turmoil in his heart.

He never expected that Arad had this as his plan.

Seeing that Wang Sheng did not immediately refuse, Arad seemed to see hope and quickly added, "I know this sounds crazy, but believe me, Marvel's value has not been fully realized! We have a gold mine! It's just that we currently lack sufficient funds and a powerful platform to develop it independently."

We have our own Marvel Studios plans, but we desperately need capital! If you're willing, we can sit down and seriously discuss the price. I believe that a partner with keen insight and strong execution skills, like you, can lead Marvel to a whole new level.

Wang Sheng put down his cup and calmly met Arad's expectant gaze. His mind was racing.

Acquire the entire Marvel Cinematic Universe?

At that point in 2003, it was undoubtedly an extremely tempting idea. According to his memories from his previous life, Marvel Entertainment was acquired by Disney in 2009 for a staggering $42.4 billion, thus ushering in the era of the globally dominant Marvel Cinematic Universe (MCU).

If you can buy it now at a lower price, the future return on investment will be astronomical.

Arad proposed this idea because he saw the potential recognition of Marvel's overall value behind Wang Sheng's "irrational" acquisition behavior, as well as Wang Sheng's current strong cash flow (huge profits from "Night at the Museum" and "Saw") and Hollywood operating capabilities.

He longed to find a "white knight" to help Marvel out of its predicament and realize its dream of producing its own movies. However, Wang Sheng quickly calmed down. The temptation was immense, but reality was harsh.

First, the price.

Despite its current predicament, Marvel is, after all, a publicly traded company with a large number of intellectual property rights (Marvel Entertainment, stock code MVL).

Driven by the success of movies like Spider-Man, its market value, though far less than in later years, was still considerable.

In June 2003, Marvel's market value fluctuated between approximately $300 million and $400 million.

A premium is inevitable if an acquisition is to be launched, and the final transaction price will likely need to reach $5 million or even $6 million.

This is an extremely heavy burden for Wang Sheng and Shengying Media, who have just made profits from a few films. They almost have to stake their entire fortune and take on huge debts.

Secondly, and most importantly, identity and barriers.

This is Hollywood, the heart of America's cultural industry, backed by powerful barriers of capital, politics, and ideology.

How could a Chinese company want to acquire a company in 2003 that possessed so many iconic American cultural symbols and, to some extent, embodied the "American spirit"?

Wang Sheng could almost immediately foresee the enormous resistance that would be encountered.

The Committee on Foreign Investment in the United States (CFIUS) will undoubtedly conduct the most rigorous review on the grounds of "national security" and "cultural security," making the chances of approval extremely slim.

Opposition from some members of Congress was almost predictable headline news.

More importantly, the "Big Six" Hollywood studios (Warner Bros., Disney, Paramount, Sony/Columbia, Universal, and 20th Century Fox) will not sit idly by while a Chinese company controls such a vast IP library, which could potentially threaten their market position and vested interests (especially Sony and Fox, who already own Marvel characters).

They will use every commercial and political means to obstruct it.

In Hollywood, a place protected by American imperialism and monopolized by six giants, it is truly inadequate for a Chinese capital with shallow roots to attempt a snake-swallowing-elephant acquisition of Marvel. It can even be said to be courting death.

This is not just a business merger, but will evolve into a sensitive political and economic game. Given his current strength and background, his chances of winning are almost zero.

Having thought all this through, Wang Sheng had made up his mind.

He gave a slightly regretful smile, his tone steady and firm: "Mr. Arad, thank you for your kindness and honesty."

I must admit, the blueprint you've described for the Marvel Cinematic Universe is incredibly compelling, and Marvel's roster of characters truly is a world-class cultural treasure.

He then changed the subject: "However, I'm sorry, at present, Shengying Media has no plans to acquire the entire Marvel."

Such a merger is beyond our current capabilities and strategic focus. We prefer to establish connections with Marvel through project collaborations or in-depth development of specific copyrights.

The light in Arad's eyes dimmed considerably in an instant. He opened his mouth, as if he wanted to try again.

Wang Sheng raised his hand, gently but firmly stopping him: "However, Mr. Arad, my interest in certain Marvel characters is genuine, and I am also extremely curious about Marvel Studios' potential future self-produced projects."

Perhaps we could explore collaborations on more specific projects? For instance, if we both share a common vision for the development of a particular character, Shengying might consider participating as an investor or co-producer?

Wang Sheng proposed an alternative solution.

He can't buy the entire Marvel Cinematic Universe, but that doesn't stop him from continuing to be deeply involved in future Marvel movie projects as a collaborator, especially those characters for which he already owns the rights.

This would both reduce the risk and ensure that he gets a share of the profits as Marvel rises in the future.

Arad took a deep breath, clearly disappointed by Wang Sheng's rejection, but he quickly adjusted his mindset.

As a shrewd businessman, he understood that forcing things was useless.

Although the cooperation path proposed by Wang Sheng is not as straightforward as a direct acquisition, it is still a viable option, especially when dealing with a partner like Wang Sheng who has successful experience and financial strength.

“I understand your decision, Wang.” Arad’s professional smile returned, though less eager. “Marvel’s doors are always open to sincere partners. We can stay in touch regarding project collaborations. Perhaps… after your ‘Spy Kids’ once again shocks the world, we can sit down and talk again?”

“Of course.” Wang Sheng smiled and raised his soda glass. “I look forward to future cooperation, Mr. Arad.”

The two cups gently touched together, making a crisp sound.

This meeting did not result in a groundbreaking acquisition agreement, but it planted a seed for the future.

Wang Sheng gained a clearer understanding of Marvel's value and his own limitations, while Arad also remembered a Chinese director who was "deeply in love" with Marvel and whose strength should not be underestimated.

For Wang Sheng, at this stage, it is far wiser to continue to solidify his foundation in Hollywood, use his "God's-eye view" to accurately invest in and produce films, and accumulate more capital and industry influence than to risk swallowing the "elephant" Marvel.

The road must be walked one step at a time.

His Hollywood journey and capital layout are far from reaching a stage where he can act recklessly.

(End of this chapter)