Best Director in Literature Department of Huayu

Chapter 119 Acquisition Target

Lin Ruiyang's words were like a bombshell in Roger's mind. In his extreme shock, he even knocked over the fork on the table.

"Are you crazy?! Lin!" Roger growled in a low voice.

"Make me leave CAA? That's betrayal! Richard Lovett will use the power of the entire industry to blacklist us! We won't get any investment from the six major studios, and we won't be able to survive a minute in Hollywood!"

"Ban? What can they use to ban us?" There was no fear in Lin Ruiyang's eyes.

"Rogge, you overestimate the CAA and underestimate the profit-driven nature of capital. Let me ask you, the Talent Agency Act (...")

What is the most fundamental rule in the Talent Agencies Act?

Roger paused for a moment, then subconsciously replied, "Traditional agents can only help artists find jobs and sign contracts; they absolutely cannot participate in the production and investment of films, nor can they take a share of the box office revenue."

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"That's right." Lin Ruiyang snapped his fingers.

"This is why even if CAA becomes very large, it can only do package deals and cannot run its own production studios. However, managers are not subject to this restriction."

Upon hearing the word "manager," Roger's previously flustered expression immediately calmed down.

As someone in the industry, he was all too aware of the legal boundaries between these two positions.

Traditional brokers only receive a fixed commission, but managers operate outside the strict oversight of unions.

Not only can they earn higher commissions, but most importantly, managers can directly serve as executive producers of the film, participating directly in the film's post-production global box office revenue sharing and copyright development. Just like Jerry Bruckheimer, they not only have a high degree of autonomy but also receive generous compensation.

"My short-term contract with the newcomer expires at the end of August, and I will definitely not renew it. I plan to acquire my own independent production company in Hollywood, and I need a partner who truly understands the rules of the Hollywood game, has connections in the studios, and is ambitious to be my full-time manager and co-producer for all my future projects."

"Rogge, why don't you come out and earn your own share of the pure profit that you haven't been exploited for?"

Roger stared intently at Lin Ruiyang, his breathing becoming rapid: "But this is too risky... If Richard Lovett goes berserk, the six major studios might really be pressured into rejecting us."

Roger took a big gulp of strong liquor, trying to suppress the wildly growing fire within him.

"Investment? Roger, do you think I need investment right now? Once 'The Queen' surpasses $3 million at the global box office, Elizabeth would love to dump her entire second-half budget on me. Capital is greedy and forgetful; it only recognizes projects that can make money, and it doesn't care about the reputation of any agency."

Moreover, if *Dallas Buyers Club* wins a major award at the September film festival, would Searchlight Pictures abandon its Oscar bid just because of Richard's words? At that point, the power will be in our hands, not the so-called CAA.

Roger sank into the sofa, understanding that in this world of fame and fortune, content is always king, and content creators like Lin Ruiyang who can bring returns are the truly scarce resources.

"Lin, what do you need me to do?" When Roger looked up at Lin Ruiyang again, the fear and hesitation in his eyes had completely faded, replaced by a morbid look that only gamblers have at the table.

"It's simple, Roger. You stay at CAA until my contract officially expires, and don't show anything, or you can act more proactive than anyone else and use the privileges approved by the board to frantically mobilize the company's resources during awards season."

Roger's eyelids twitched, and he instantly understood Lin Ruiyang's intention: "You want to use CAA's chickens to lay our own eggs?"

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"That's right, I need a complete awards season strategy, and CAA happens to have the best PR team in the industry. Let CAA fix the road for us, and then we'll drive away once the road is fixed."

"What about the new company? We need a platform after we leave," Roger asked the most crucial question.

As Lin Ruiyang's agent, Roger knew his current accounts inside and out. Even though he received a decent director's fee for "The Queen," for a high-end Hollywood game with a budget of tens or hundreds of millions of dollars, his cash flow was just pocket change.

"Actually, I've been thinking about this for a long time." As he spoke, Lin Ruiyang took a piece of paper out of his bag.

Above is a simple architecture diagram, which Roger examined carefully.

"BVI?"

"Delaware LLC?"

"The issuing company?"

This is clearly a well-thought-out plan that has been consulted with professionals.

Roger grew increasingly calm as he observed, realizing that Lin Ruiyang's decision was far from spur-of-the-moment. From funding sources and controlling structures to future acquisition targets, even tax and legal risks had been considered in advance.

"When did you start preparing for all this?"

"Before I came to Hollywood last year."

"At that time, I realized one thing: a director is always just a director. Even someone of Spielberg's level doesn't really make money from the director's salary."

Rogge nodded silently.

DreamWorks, Amblin, Lucasfilm... the top tier of Hollywood professionals all ultimately follow the same path: from creators to investors.

"So your goal was never to sign a bigger agency contract?"

"Of course not. If I just wanted to be a director, I would already be working on that A-list contract you brought tonight. The problem is, I don't want to work for someone else my whole life, even if that boss is CAA, an industry giant."

"So, what kind of company are you planning to acquire?"

"The smaller the better, ideally a small independent publisher with a publishing license and a core team. No high debt, no complex equity structure, and no long-term litigation... We're buying a distribution channel, not a burden."

Roger's eyes flickered slightly. He had seen quite a few companies like this in his career, especially in Hollywood, where a large number of independent distributors die from cash flow crises every year.

Many of these companies are simply lacking a lifeline. As long as they have a stable source of films and a bridge loan, their existing distribution networks can be put back into operation at any time.

Roger slowly put down the paper in his hand. As an agent, his first thought was not about the risks, but about the feasibility.

Because Lin Ruiyang is right, the value of a distribution company is never in its office building and desks and chairs, but in its distribution qualifications, theater relationships and remaining personal networks, which are precisely the things that can be bought with a little money.

"I know a few," Roger suddenly said.

"Um?

"After the DVD market crashed in the past two years, many independent distributors have been struggling, and some owners are even willing to sell their companies to enjoy retirement."

"Then tell me."

"They weren't very big, most had fewer than twenty employees, and some even had only seven or eight people left to keep the business running," Roger recalled, stroking his chin.

"The valuation of such companies is not usually too high, ranging from several hundred thousand dollars to several million dollars."

This number is roughly the same as Lin Ruiyang's previous estimate.

While the director's fee for "The Queen" and the cash reserves accumulated over the years weren't substantial, they were enough to leverage an acquisition of this size.

If that's still not enough, you can use future earnings as collateral for loans; banks always prefer people with anticipated cash flow.

"Since you know what's going on, I'll now provide you with two companies that meet the criteria."

First, FirstLook Studios. They recently acquired another independent label and are now facing cash flow problems due to integration. The owner is eager to cash out some shares or sell the entire company.

The second is FilmFoundry. This company is even smaller, with only twelve people, but they hold long-term screening agreements with two hundred independent arthouse cinemas across the US. Because of two poorly received European arthouse films last year, their finances suffered, and the founder was struggling to stay afloat.

Lin Ruiyang did not immediately give a response: "If you had to choose, which company would you choose?"

"Photo and Image Entertainment".

"reason."

"Because what we lack most right now is time and cash."

Roger held up two fingers: "First Line Pictures looks bigger, but it has more problems. Post-merger debts, legacy contracts, employee compensation, potential lawsuits—each of these could become a bottomless black hole."

"Yingtu Entertainment is much simpler. A small team of twelve people can see the entire balance sheet at a glance. More importantly, their core assets have not depreciated."

"Then let's make the images our top priority."

"Understood," Roger replied.

"However, don't just focus on these two companies."

"you mean?"

"Keep searching."

"In the next month, we will screen all eligible targets. As for which company to buy from, we will decide after the due diligence is completed."