America's No. 1 financial conglomerate

Chapter 649 I'll handle it.

confusion.

Unbearable.

The merger of MGM and CBS was not as simple as one acquiring the other, or swallowing and being swallowed; it was a combination of two behemoths.

One possesses top Hollywood film and television production resources and globally renowned IPs, while the other controls a broadcasting network with a 75% coverage rate, integrating MGM television and reaching over 82% of American households.

This combination gave birth to a media empire unlike any other in American history.

But the stronger the power, the more intense the conflict becomes.

It involved power struggles across various departments, affecting everyone from top to bottom.

"The team has become too big, it's harder to manage."

March 17th marks two weeks since MGM acquired CBS.

The internal management problems have not only not been resolved well, but the power struggles are even intensifying.

Ernst stood in front of the floor-to-ceiling window of the conference room, a Cuban cigar between his fingers, the smoke rising slowly in front of him, intertwining with the sunlight outside the window to create a hazy play of light and shadow.

His gaze fell on the central plaza below the building, where the blue MGM lion flag and the gray CBS eyeball logo flag intertwined and fluttered in the spring breeze, just like the complex relationship between the two major groups at present.

On both sides of the long table in the conference room sat the core executives of MGM and CBS. These were all influential figures in the media industry, but at this moment they all lowered their heads and even deliberately lowered their breathing.

MGM Resorts International president Robert Egger fiddled with the buttons on his suit sleeve, while CBS president Mel Karmazin gripped his pen tightly, his knuckles turning slightly white.

This young tycoon cannot be judged by his age.

Long-Term Capital Management has a bloody example right before its eyes; it's a company that's ruthless and decisive.

This statement was clearly a warning to them, including everyone, including Robert Iger.

The current silence may well be the prelude to a storm.

If the power struggle continues, it will lead to continued chaos in internal management.

Of those present, I estimate that quite a few will be leaving.

"Gentlemen." Ernst turned around and walked steadily to the head of the long table. The sound of his leather shoes hitting the floor was particularly clear in the quiet conference room.

After he sat down, his gaze slowly swept over the crowd. "An investment of $124 billion is not as simple as buying a television network. It is a unified media empire that can cover 82% of American households and influence the direction of American public opinion."

This is what Ernst considers most gratifying about MGM's acquisition of CBS.

By acquiring CBS, his media network effectively covered the entire United States, making the Garfield family arguably the second largest media mogul in America after the Morgan family.

The influence is self-evident, especially on Walton.

"But what I see now is not a media empire that dominates America, but an empty shell teetering on the brink of collapse due to internal strife." His face turned cold as he pointed to the documents on the table in front of him. "In just two weeks, CBS's core programming ratings have dropped by 2.1%, and MGM's ratings have declined in tandem. I want to know, why is this? Can anyone explain it to me?"

Sitting to his right, CBS President Mel Karmazin broke the silence, directly attacking, "Hollywood people don't understand what broadcasting and television are at all. Last week's '60 Minutes' wouldn't have suffered such a drop in ratings if we hadn't pulled the report on Ford's safety issues."

"What about contingency plans?" Ernst scoffed, his eyes icy. "CBS, one of the three major television networks in the US, has decades of experience in news production. Doesn't it even have a contingency plan for dealing with changes in topic selection?"

He snorted, even laughing in exasperation. "I watched last week's 60 Minutes myself. It was less of an in-depth news program and more of a community news storytelling session."

"For CBS, one of the most authoritative news programs in America, to report on a lost pet dog in a neighborhood is an insult to its viewers and a trampling of its century-old brand."

Ernst was so angry he almost smashed the TV. It was like a businessman watching the news, trying to learn about national affairs and find some business opportunities, only to find a report about a lost dog in a neighborhood.

The next day, The New York Times had a particularly jarring headline on its front page: Media Giants: Is Bigger Always Better?

This is undoubtedly a public questioning of the effectiveness of the merger between the two groups and a blow to the credibility of this new media empire.

He knew perfectly well that CBS couldn't possibly be without a contingency plan.

As a flagship program that has been refined over decades, "60 Minutes" has long established a comprehensive reserve of topics and an emergency response mechanism. Even if it were a temporary cobbled-together program, it would be impossible for such low-quality content to be broadcast.

Clearly, this is CBS management deliberately creating trouble to express their dissatisfaction with MGM's integration strategy.

"It's almost the 21st century, and CBS is still clinging to those outdated ideas, which is a problem in itself."

Leslie Moon of MGM Resorts seized the opportunity. He had been advocating for the transformation of CBS using MGM's content production model, and naturally, he wouldn't let go of this chance to suppress the competition.

"Take program production for example. Whether it's dramas or entertainment programs, CBS's program production costs are pitifully low, while MGM's program ratings over the past year have been remarkable, demonstrating what the right path is."

Ernst didn't indulge him. He glanced at him, his tone devoid of any emotion. "So, MGM Entertainment has once again increased program production costs and screenwriter salaries?"

Last year, CBS's drama production division paid an average of $6.2 per episode, while MGM's standard was as high as $8.8 during the same period. This gap had already sparked discontent among CBS employees after the merger of the two groups.

After the acquisition, MGM Entertainment Group not only failed to consider balancing the integrated compensation system, but also increased writers' fees by 10% again, while significantly increasing the program production budget.

This may seem like an effort to improve content quality, but in reality, it puts CBS in a very difficult position.

CBS's business structure is far more complex than that of MGM Entertainment Group. In addition to profitable sectors such as television dramas and entertainment programs, it also includes business segments with a strong public service orientation, such as news and weather, which have long been in a loss-making state.

Television stations all operate this way, relying on revenue from profitable departments to subsidize loss-making businesses and maintain overall operational balance.

MGM's business model is still very focused, or rather, its business scope is small, allowing it to invest the majority of its revenue in the production of highly profitable programs and create more high-quality content products.

MGM's latest salary adjustment will likely cause employees in CBS's profit-generating departments to see that their peers at MGM are paid far more than they are, leading to a strong sense of dissatisfaction and potentially even strikes or other unstable events.

This is an internal power struggle using the group's interests, which is one of the reasons for Ernst's dissatisfaction.

Raising actor salaries is easy, but lowering them is not so easy.

If things go wrong, the entire writers' guild will be in an uproar.

The merger of two media giants is both difficult and simple.

MGM Resorts International comprises six subsidiaries: MGM Television, MGM Studios, MGM Entertainment, MGM Records, Playboy Group, and MGM Television Networks.

The entities truly involved in this major merger change are MGM Entertainment Group and MGM Television Group.

MGM Studios, MGM Records, and Playboy Group will remain unchanged.

As for MGM Television Network, due to the Telecommunications Act and the overlapping coverage issues between the two television networks, they can simply cut some of their affiliated television stations.

In addition, there are departments such as the GG department and the human resources department, which were integrated for the purpose of overall planning, unified coordination, and convenient internal transfers.

MGM Television, on the other hand, is different. This group owns the television stations that MGM acquired and operated independently.

Now that the two groups have merged, MGM Television will be fully integrated into CBS.

After that, there was no longer a MGM Television Group; instead, it became the CBS Group.

Therefore, there is fierce power struggle among the top executives of MGM Television Group.

As for MGM Resorts International, this group includes a content production center, as well as weather and news departments.

Ernst's meaning was clear: CBS needed to streamline its operations and merge the production of its dramas and programs into MGM Entertainment.

The meteorological department and news-related operations were merged with the news center.

From now on, CBS will focus solely on developing its television network.

This undoubtedly represents a significant weakening of CBS's power, and they certainly have their objections.

That's why the "60 Minutes" news incident happened; it was meant to embarrass MGM.

Tell MGM that they can't make good shows the way they do it.

Ernst glanced at Robert Egger, who looked straight ahead, seemingly oblivious to his gaze.

He chuckled inwardly, knowing full well that if the other party truly wanted to promote the integration of the two groups, the current chaotic situation would never have occurred, but he did not want to do so.

The reason is simple: power.

He prefers that MGM's core team take the lead in the integration process and completely absorb CBS's power structure, so as to further consolidate his control within the group.

Ernst also supported him in doing so, since MGM's personnel were all his staunch supporters.

But haste makes waste, and seizing power shouldn't be done in such a rush.

This is CBS, not some run-down local TV station. It's not that easy to completely swallow them up.

"Okay." Ernst nodded with a smile. "Don't be afraid of problems; we'll solve them."

"If you can't solve it, then I will."

"The original integration framework remains unchanged. Except for the GG business, which needs to be aligned with the group's overall strategic layout, CBS Group will maintain its autonomy in development."

These words were like a bolt from the blue, causing both Mel Karmazin and Robert Iger's expressions to change simultaneously.

Mel Karmazin's face instantly darkened because of Ernst's statement that the original integration framework would remain unchanged.

This means that CBS's content production departments will still be separated and placed under the management of MGM Entertainment Group and the News Center.

Robert Iger's brow furrowed because of the phrase "maintain autonomy in development."

This means that CBS will have independent decision-making power in core areas such as personnel and operations. MGM's core team's plan to fully control CBS has basically failed, and they have only dismantled a part of it.

That wasn't all; Ernst then hung a sharp blade over everyone's head.

"To ensure the standardized and efficient operation of the group during the integration period, an audit and supervision committee has been established. The core responsibilities of this committee include supervising all employees to comply with the company's rules and regulations, investigating and handling violations such as absenteeism, leaks of confidential information, and embezzlement; handling reports and complaints from internal employees and external customers, and cooperating with management in the work of determining responsibility and maintaining order."

"This committee will be fully managed by Helen McKesson."

This time, not only Kalmazin and Robert Iger, but everyone's face darkened.

Listen to these responsibilities; they cover almost all the powers that should be in place in all departments, including human resources, legal affairs, and auditing.

In theory, this department has the right to investigate all problems at MGM.

The head of the department was Helen McKesson, Ernst's former protégé and current secretary-general.

The crucial issue is that she did not step down as Ernst's secretary, which is what everyone feared most.

This is Ernst's trump card. During the upcoming integration period, if anyone tries anything funny, they shouldn't blame him for being ruthless.

In large corporations, how many of the top executives are truly clean?

This is especially true for companies that are doing well.