RBCT Chapter 148 MGM's Assets
Chapter 148 MGM's Assets
Chapter 148 MGM's Assets
After lunch with Robert Iger, Ernst returned to his chairman's office on the top floor of the MGM Grand.
He took off his custom-made suit jacket and casually draped it over the armrest of the leather sofa, his fingertips tracing the brass trim inlaid on the edge of the desk.
Unlike the ostentatious decorations left by the Cockleian era, Ernst preferred this understated yet luxurious design.
My assistant had just brought in freshly brewed coffee and had only been gone a short while when there was a gentle knock on the office door.
"Please come in," Ernst paused as he picked up his coffee cup.
The door opened, and Wenger entered the room with Sarah's polite gesture.
He wore gold-rimmed glasses with an impeccably tailored three-piece suit, and his briefcase looked heavy in his hands.
"Looks like I've caught a good time," Wenger said, his gaze sweeping over the coffee on the table, a familiar smile playing on his lips.
Ernst got up and hugged him, patting him on the back. "You're always so punctual, like a Swiss watch."
"After all, this is to serve someone as busy as you." Wenger released his hand, made a joke, and then began to look around at the surroundings with great interest.
"Compared to the last time I came here, it's like I've changed rooms."
6
The last time Wenger stepped into this office was when he was Ernst's private legal counsel, responsible for reviewing the acquisition agreement he signed with the Italian consortium.
The room at that time was filled with Coccrian nouveau riche aesthetics, with gilded wall decorations, huge lion sculptures, and several modern paintings on the walls that were obviously purchased to flaunt wealth.
Now, the walls have been replaced with a calming dark gray velvet, and where the sculptures used to be, there is now a huge aquarium with several rare red arowanas swimming leisurely inside.
In the center of the wall is the MGM lion logo, surrounded by autographed photos of MGM legends.
Clark Gable, hailed as the King of Hollywood, is one of MGM's iconic male stars. He starred in classic films such as "Gone with the Wind" and "It Happened One Night," and was also the winner of the first Academy Award for Best Actor.
Marilyn Monroe, a classic Hollywood icon, is one of the most influential sex symbols of the 20th century.
Judy Garland, Grianny Parker, Elizabeth Taylor, and many others—MGM at its peak was truly star-studded.
"A new owner always needs a new style," Ernst smiled and gestured for them to sit down.
;
Wenger, however, was not in a hurry. His gaze lingered on the inconspicuous little door on the inside of the office. He gently pushed it open a crack and then revealed a knowing look.
Behind the door was a cozy lounge with a large boat-shaped room, a built-in wine cabinet, and even a small vanity table with lipsticks and perfumes scattered on it, clearly not belonging to the owner of this office.
Ernst chuckled, touching his nose. "You know, there are always some actresses who aren't very confident in their acting skills and need me, the head of this media tycoon, to personally guide them."
"6
Wenger raised an eyebrow, closed the door, and without saying a word, simply walked to the sofa area and sat down with a smile.
He opened his briefcase and neatly stacked a pile of documents on the coffee table, the papers clinking together with a crisp sound.
"This is the latest information from MGM, along with the new company's registration documents. Take a look." He adjusted his glasses, switching his tone back to professional.
Wenger's special trip to MGM was to assist Ernst in restructuring MGM's equity structure in preparation for subsequent financing.
Ernst picked up the top document and paused when he saw the company name at the top: "Migoler Company?"
6
"You said any name will do." Wenger shrugged, pulled a Parker pen from his briefcase, unscrewed the cap, and placed it on the coffee table. "Once you sign these documents, all your MGM shares will be transferred to this company."
Sunlight streamed through the gaps in the blinds, illuminating the document and making the bold characters of the equity transfer agreement exceptionally clear.
To navigate the upper echelons of society, one must learn to leverage the greatest opportunities with the fewest resources.
How can you control the entire company with the least amount of equity?
This requires setting up a shrewd equity structure to help achieve this goal.
In the United States, or even globally, there are basically four methods used.
The first type is pyramid shareholding, which uses a nested structure to amplify control.
MGM is now moving towards this equity structure.
Ernst personally owns 100% of MGM, which in turn owns more than half of MGM.
In future fundraising, Ernst will choose to have MGM raise funds rather than MGM raising funds directly.
When Michael's stake is diluted to 51%, he will create another company, such as Michaelmi, and this new company will hold 51% of Michael's stake.
By repeating this process, a company with a large amount of assets can be controlled with very little capital.
In theory, you could control a multi-billion dollar empire with just one dollar, but of course, that's just in theory.
In reality, it is necessary to deal with multiple restrictions, including taxation and regulation.
The second type is the AB share system, which is familiar to many people and is more favored by technology companies. By using different voting rights for different shares, companies can gain more voting rights and thus control the entire company.
When Google integrates, Ernst will choose this model.
The reason for this differentiated treatment is mainly due to the different listing markets and regulatory requirements.
Google will definitely list on Nasdaq. Nasdaq has very high requirements for equity transparency, while pyramid structures have very low transparency, with many layers and often hidden transactions.
Is there a lot of shady business in Hollywood? It's a well-known money laundering hotspot, needless to say, it's an open secret.
Later, Disney spent three years just dismantling the equity structure in order to acquire Fox.
Therefore, Hollywood's publicly listed companies are all listed on the New York Stock Exchange because the NYSE's requirements are much more lenient towards entertainment companies.
Ernst picked up his pen and signed his name on each document.
After everything was over, he put down his pen, picked up the thick MGM Group document, flipped through a few pages, and couldn't help but laugh out loud: "I never imagined that MGM would have so many companies now."
66
The documents show that MGM Resorts International currently has six subsidiaries: MGM Television, MGM Studios, MGM Entertainment, MGM Records, Playboy Group, and MGM Television Networks.
Each subsidiary has spawned numerous branches, forming a vast media empire.
MGM Television Group comprises three television stations: MGM Television, which focuses on news and dramas; Playboy Television, which focuses on adult entertainment content and variety shows; and Orion Television, which focuses on movie channels.
These three television stations cover different audience groups, forming a complementary content matrix.
MGM Studios owns three film production companies.
MGM, which focuses on big-budget commercial films; Orion Pictures, which is responsible for art films and award-winning films; and United Artists, which Robert Iger positions as a company that remakes and develops classic IPs.
It is worth noting that MGM Studios also comprises two key companies.
MGM Home Entertainment is the home video and film distribution division of MGM Studios, responsible for the production, sale, and distribution of MGM's films, television programs, and other content into home video products.
Then there's MGM, which is responsible for film distribution, including film promotion, marketing, and theater scheduling.
MGM Resorts International comprises two companies: MGM Festival Production Center and News & Weather.
MGM's self-produced content center bears the heavy responsibility of content production, and is responsible for the recording of all programs on the television network, including dramas, talk shows, reality shows, and current affairs programs.
News and weather companies ensure the supply of daily news broadcasts and weather forecasts, a seemingly basic but indispensable function.
It can be said that MGM Resorts International is the lifeline that keeps MGM Television Network running.
The fourth subsidiary group is MGM Records.
Although this is a sector that Ernst has only recently focused on investing in, its expansion speed is astonishing, and it has the most subsidiaries among all its subgroups.
MGM Copyright, the company responsible for copyright management, is specifically responsible for managing all copyrights related to MGM Music.
MGM Audio & Video Records, which focuses on releasing film and television soundtracks, will release the soundtrack album for "Titanic".
There's also MGM Records, which directly competes in the market and is the main force behind MGM's efforts to cultivate singers and conquer the record market.
In addition to these, Robert Iger also acquired or invested in 13 independent labels with different styles during this period, covering multiple fields such as jazz, country, rock, and folk.
There are countless brands like this in America, at least eight hundred if not a thousand.
This is similar to the later artist studios, where musicians with a little fame would create their own labels.
Then there's MGM Television Networks, which is key to connecting content and channels, primarily responsible for business collaboration with affiliated television stations.
Ernst was particularly focused on GG Distribution, a subsidiary of GG, and had high expectations for the company.
Once a television network reaches a certain scale, integrating the GG resources of all affiliated stations into a unified negotiation can often earn 5% to 20% more than if each station were to operate independently.
MGM GG Distribution has now signed relevant GG licensing negotiation contracts with all affiliated TV stations. This premium is split equally between the company and the affiliated stations, which not only increases the accumulated revenue of partners but also creates stable income for the group.
This is a common profit model for major American television networks and one of their important sources of revenue.
However, Ernst is more looking forward to the election being cancelled, because that's the real money-making business.
Voters will buy a time slot to broadcast their platform and campaign for votes.
In addition, there are network survey companies that specialize in audience research, using precise data feedback to guide program production.
Finally, there's the Playboy Group, now touted as a super win-win acquisition. It has more than ten subsidiaries, including Playboy Entertainment, which publishes the magazine; Playboy Fashion, which operates clothing and accessories; Playboy Underwear, which was recently spun off and operates independently; Playboy Properties, which is involved in retail stores; and Playboy International, which is responsible for overseas business, among others.
This is actually related to American business practices. The financial industry is so developed that they want to split up their various businesses and raise money through multiple IPOs.
The term "corporation" first became popular in the United States. You might think that a company with a market value of several hundred million dollars is not as large as the corporate world, but Americans can break down the business of such a company into dozens or even hundreds of parts.
As soon as the business started to show promise, they immediately raised funds to prepare for an IPO.
After closing the document, Ernst was very satisfied with MGM's development.
The fact that he has achieved so much in less than a year since acquiring MGM is no wonder that Robert Iger said the board of directors is now almost under his control.
Because he brought MGM enormous profits that were clearly visible, no one dared to utter a word about MGM's internal management decisions.
Even if you have to fart, you have to hold it in and find a secluded corner where no one is around before you let it out.