America's No. 1 financial conglomerate

I want all of Chapter 494

The following morning, when Ernst appeared in Robert Iger's office again, the latter still looked resentful.

"Looking refreshed and in high spirits," the other person said sarcastically. "Do you need me to find a couple of projects to give that person the green light?"

Ernst chuckled softly upon hearing this, his laughter filled with disdain and contempt.

Given his current status and position, why would he need to use such a low-level method as bait to seduce women?

For young women who aspire to make a name for themselves in the entertainment industry, having the opportunity to get into his bed should be something to be grateful for.

Once there is a first intimate encounter, there is a high probability that there will be a second.

If they were to meet in public one day and their intimate contact were seen by outsiders, that alone would be enough to give these newcomers in the entertainment industry their biggest advantage in establishing themselves.

In this circle, being able to connect with powerful and influential people is itself a kind of intangible resource and capital, let alone when that person is an American tycoon.

"I don't really care about you, but I'm more curious about you." Ernst said as he slowly approached Robert Egger, his gaze fixed on his face with curiosity and a look of inquiry in his eyes.

"Me?" Robert Iger was clearly taken aback. He subconsciously reached out and gently touched his cheek, not understanding why Ernst was looking at him like that.

Is there something unusual on my face, or is it a mark left by what happened last night?

"How come you look so much older after just one night?" Ernst's voice rang out again, raising an eyebrow with a gossipy look. "What happened to you last night that made you look like this? I'm really curious."

Robert Iger was taken aback by Ernst's question. He quickly cleared his throat, trying to hide his embarrassment, and then said, "Please have a seat. I'll make you a cup of coffee."

However, Ernst clearly had no intention of letting him off the hook. He slowly walked to the sofa, sat down, leaned back slightly, and patted his thigh lightly, looking quite relaxed. He said, "Did you like the gifts I gave you yesterday? Judging from your haggard appearance, you didn't use them all up, did you?"

Robert Iger, with his back to Ernst, was intently grinding coffee beans with a hand grinder. Upon hearing Ernst's words, he visibly paused. "I didn't even open those clothes."

"Oh?" Ernst drawled, his tone full of mockery. "Since you haven't even opened it, how do you know it's clothes inside?"

The other party didn't reply, but after a moment brought over two cups of coffee. "What are your thoughts on the acquisition of Liberty Television Network and the bidding for sports events?"

Wasn't that a rather abrupt change of topic? Ernst glanced at him, but then picked up his coffee, took a sip, and said seriously, "I want both."

Even if the broadcasting rights for sporting events are won through bidding, they won't take effect until next year at the earliest.

Ernst put down his coffee cup and leaned forward slightly. "Acquiring Liberty Network allows us to leverage its existing resources and experience to compensate for MGM's lack of experience in the sports event field. The two can complement each other well, laying a solid foundation for our future development in the sports media sector."

"And as you know, Liberty Television Network is not a nationwide television media outlet. We will definitely be building a brand new nationwide sports broadcasting network in the future."

"Once the NFC broadcasting rights auction ends at the end of the month, we can use the existing staff of Liberty Network as the core team, and the sports event contracts we won as the foundation, while also acquiring some regionally influential local sports television networks, connecting those television stations that want to obtain sports event broadcasting resources and are willing to join us."

"In this way, a nationwide sports event live streaming network can be quickly established."

"This is much simpler than starting from scratch, and even though Liberty Networks' offer was much higher, I think the investment is worthwhile."

"Right now, our primary concern shouldn't be finances, but time."

The NFC auction is on September 27th at the end of this month, and MGM doesn't have much time left.

If MGM can win the NFC broadcasting rights, it will be in a great hurry to build a sports television network covering most parts of the country within three months.

"That's what I think too," Robert Iger nodded.

Ernst looked at him, his eyes narrowing. "Since you've already made up your mind, why did you call me back?"

"It's a funding issue," Robert Iger said frankly. "There were too many people in the meeting room yesterday, so I didn't bring it up. I wanted to ask for your opinion today."

Yesterday, all the top executives of MGM Resorts and the management of MGM Television were present. Although these people were all promoted by Robert Iger after he took office, that doesn't mean the news wouldn't leak out.

People have selfish desires. Selling trivial information for money is a normal form of gray income in the workplace.

"MGM's total debt has now exceeded $45 billion, but we have strong cash flow, with $14 billion on the books. Combined with cash assets, our net debt is not high, less than $30 billion, which is within a relatively controllable range."

"How come there's so much cash?" Ernst asked, somewhat surprised.

The MGM Group has been in a phase of rapid expansion recently, having undertaken numerous acquisitions and investments. Logically speaking, it should not have such a large amount of cash reserves.

Robert Iger explained, "First, as you requested, I tried to retain as much cash flow as possible. Most of the funds needed for the company's acquisitions and expansion during this period came from loans, so we have sufficient cash flow."

This is Ernst's requirement: MGM must ensure sufficient cash flow, at least 7% to 10% of its market capitalization.

Although $14 billion is on the books, which seems like a large sum, it only just reaches the baseline when calculated according to MGM's valuation, and does not exceed the expected range.

Nowadays, most of Hollywood's major studios operate with high debt levels, which has become a common phenomenon in the industry.

It was precisely because of this high-debt business model that Hollywood was frequently rumored to be going bankrupt in the 1980s and 1990s. Many former industry giants were also acquired by other companies and exited the historical stage due to debt problems.

Actually, this is a good thing, because the involvement of large corporations has brought about more advanced management systems.

Leveraging is inevitable for business development, but how to leverage and where to place the fulcrum are all very important considerations.

Take MGM for example; its ample cash flow is the guarantee that allows it to increase leverage.

The internet is on the rise, the direction of the entertainment industry is uncertain, and beneath the seemingly prosperous surface, it may face fragmentation at any time.

Furthermore, the high growth of Nasdaq has already created a bubble, and no one can guarantee when this bubble will burst or how big the impact will be.

At this point, ample cash became a powerful support for MGM, allowing it to both advance and retreat. To expand, a large cash flow made it easy for MGM to raise funds, and banks were very keen to lend to such companies.

If a crisis really occurs, whether it's the internet impacting the entertainment industry or the bursting of the Nasdaq bubble causing a market crash, MGM, with its deep pockets, will be much more at ease dealing with it.

"One more thing, we sold the production rights to our DVDs and videotapes. The price was a bit low, a 15-year license, and the three companies only sold it for $3.7 million in total. However, I insisted that the funds must be received in full within a month, and I would not accept installment payments."

At this point, Robert Iger laughed. "You know what the Amazon people said? They thought MGM was just selling production rights to drain their cash flow and make them compete more with Walmart in this area, so they were desperately trying to drive down the price."

Robert Iger knew about Google Video, otherwise he wouldn't have agreed to sell the production rights.

"They're right," Ernst nodded. "I've considered that as well."

"However, there will be an even bigger surprise later."

When Ernst decided to let MGM sell the production rights, Blu-ray DVDs didn't even exist yet.

Now that Blu-ray DVDs are available, there's no need to slowly erode the DVD market; Ernst can deliver a fatal blow directly.