Chapter 350: Agreement
Chapter 350: Agreement
Michael Lynne froze for a moment, but quickly nodded. A bitter smile appeared at the corner of his lips. This matter was not a secret. Many of the old employees from New Line knew about it.
At the time, Michael Lynne had hoped Robert Shaye would wait a little longer, because although New Line’s profits were far inferior to Firefly’s, its operations were healthy. Firefly, meanwhile, had nothing except the rights to several blockbuster films. It was basically just an empty shell. Therefore, Firefly’s need for New Line’s complete distribution channels far exceeded New Line’s need for Firefly. If they could have dragged things out for another half year to a year, Firefly definitely would have offered a much higher price.
After Teenage Mutant Ninja Turtles was released, Robert Shaye had even expressed regret to him face-to-face during a gathering. If he had followed Michael Lynne’s advice back then, once Teenage Mutant Ninja Turtles became a success, New Line’s value would at least have doubled. But now, it was too late to say anything.
“Eric, that’s indeed the case,” Michael Lynne admitted with a nod, making no attempt to defend himself.
Eric did not care about Michael Lynne’s subdued reaction and said with a smile, “Michael, I can actually guess why you opposed Robert selling New Line back then. But he didn’t listen to you. Do you know why?”
Michael Lynne raised his head to look at Eric, waiting for him to continue.
“Because I told him back then that time was running out for companies like ours that weren’t first-tier film studios. If we didn’t seize the chance to expand to a sufficient scale, we would eventually end up being swallowed by the major studios. Last year Columbia Pictures was acquired by the Sony conglomerate. Recently, MCA, Universal Pictures’ parent company, is also about to be acquired by Panasonic of Japan. At the same time, Warner Bros. merged with Time Inc. to become Time Warner. This entire wave of consolidation proves that what I said last year was correct.”
“Eric, I don’t quite understand,” Michael Lynne suddenly said.
“No, you definitely understand,” Eric replied. “You should be able to see why I acquired New Line. In my original plan, the division of labor within Firefly was very clear. Robert would be responsible for company operations and oversee film distribution affairs, expanding Firefly’s distribution network across the world as quickly as possible, while I would focus on production. From the very beginning, my goal was for Firefly to expand, expand, and expand again as fast as possible. But now Robert has gone down the wrong path.”
Michael Lynne lowered his head, unwilling to meet Eric’s blazing gaze. There was none of the youthful immaturity that should have belonged to a young man who had just turned twenty. Instead, there was the oppressive presence of someone in authority.
At some point, a small scrap of paper had fallen onto his knee. It looked especially glaring against his gray suit pants. Michael Lynne lightly brushed at it once, then again, but the scrap stubbornly clung to the fabric, so he gave up.
“Michael, I know you and Robert have always been very good friends, so I hope you can talk to him. It’s not convenient for me to step in personally, because that would create misunderstandings between Robert and me. But you’re different. You’ve worked together for more than ten years, so he should be willing to listen to you. As long as he can devote all his energy to what he’s actually supposed to be doing, I can even transfer another portion of shares to him.”
“It’s useless, Eric,” Michael Lynne finally raised his head and said seriously. “I’ve worked with Robert for so many years, so I understand his personality very well. It wouldn’t make any difference even if I said it. The reason Robert and I have been able to remain friends is because I’ve never posed any threat to his authority. To put it bluntly, I have no influence over him.”
Eric put away the sample tissue box in front of him, then took a document from the nearby filing cabinet and pushed it toward Michael Lynne.
“In that case, you can take a look at this first.”
There was nothing written on the cover. Michael Lynne suppressed the expectations rising inside him and opened the first page.
It was a share transfer agreement, amounting to 2%. The effective date of the agreement was the end of the year. Before then, the selling party could terminate the agreement at any time.
“Michael, I know you definitely don’t have the cash needed to buy 2% of Firefly’s shares, but I can help you borrow that amount of money. There won’t be any legal risks. You’ve definitely seen Firefly’s financial statements from last year. As long as Firefly maintains its current pace of development, you’ll only need two years’ worth of dividends to pay off the loan. After that, you’ll be one of Firefly’s shareholders.”
Michael Lynne pressed together his somewhat dry lips. Both hands tightly gripped the agreement in his hands. Although 2% did not look like much, based on Firefly’s current profitability, he would be able to receive nearly ten million dollars in dividends every year. That was several times higher than his annual salary. Not to mention that the 2% stake itself was already extremely valuable. From Eric’s words, he understood that these shares were basically being handed to him for free.
But there was no free lunch in the world. Taking these shares meant completely betraying Robert Shaye and moving over to Eric’s side. And not only that. From the additional clause stating the agreement would take effect at the end of the year, it was obvious that if Robert Shaye insisted on going his own way, Eric would remove him from Firefly by year’s end. What Michael Lynne needed to do was help Eric stabilize Firefly’s situation at that time and minimize the damage if Robert Shaye, driven into a corner, chose actions that would hurt both sides. Clearly, that was no easy task.
“Eric, this isn’t an easy matter,” Michael Lynne said after several minutes of silence, his voice strained.
“Mm, all right then,” Eric nodded and pulled another prepared document from the filing cabinet. “Then what about this one?”
Michael Lynne opened it again. The conditions were almost exactly the same, but the transferred share amount had changed to 3%.
Michael Lynne tugged at the corner of his mouth. He wanted to laugh, but the muscles in his face felt stiff and uncomfortable. He wanted to throw the document back in Eric’s face in a burst of youthful defiance, but he was no longer some hot-blooded young man. Those youthful impulses had long since faded.
“Eric, I…”
“This is my limit, Michael. Jeffrey only has 3% too.”
This time Eric did not pull out another offer, because in his mind, Michael Lynne was only worth this price.
He had already conducted a detailed investigation into Michael Lynne. The man was Robert Shaye’s classmate from Columbia University and held a doctorate degree. He had entered the film industry almost at the same time as Robert Shaye and possessed more than ten years of film distribution experience. After Robert Shaye left, Michael Lynne was fully capable of taking over Robert Shaye’s position.
Moreover, compared to the overly power-hungry Robert Shaye, Michael Lynne was not nearly as ambitious. Someone with that kind of personality was more suitable for the position of Firefly’s CEO, assisting Eric in expanding Firefly into something even greater.
Senior executives at film companies generally received a certain percentage of shares as rewards, just like how Eric had converted Jeffrey’s bonus into 3% equity earlier that year. Since he had already chosen Michael Lynne, Eric was effectively taking what the man would eventually receive in the future and using it now to purchase his loyalty at a good price.
Michael Lynne did not hesitate for long. He reached down and forcefully flicked away the annoying scrap of paper on his pants before finally raising his head with a smile.
“Eric, aren’t you afraid that I might ultimately refuse and instead tell Robert about all this?”
“I rarely do things unless I’m sure of them,” Eric replied lightly, able to tell Michael Lynne had already made the decision he wanted. “Telling Robert about this brings you no benefits whatsoever. I doubt Robert would hand you 3% of the shares for free. At that point, I’d have no choice but to risk major turmoil within Firefly and remove both of you together. Do you think the two of you could really build another New Line?”
Michael Lynne gave a bitter smile and shook his head. “I just think this is a little too… cruel to Robert.”
“Hollywood competition was cruel to begin with. If I hadn’t survived the storm at the start of this year, then by now Firefly would already have become a subordinate of the Big Seven.”
Michael Lynne sighed. He found a pen on the desk and signed his name on the agreement. Eric quickly handed over another copy. After signing it as well, Eric collected the duplicate.
“Then, Michael, starting now, I want you to use the next six months to completely grasp all the resources in Robert’s hands. I believe Robert won’t be too wary of you. I don’t want any of Firefly’s operations to fall into stagnation after Robert leaves. As for the old New Line employees, I think once you receive your promotion and generous dividends by year’s end, they definitely won’t choose to leave together with Robert.”
“I understand,” Michael Lynne nodded, then picked up the agreement in front of him. “Eric, if there’s nothing else, I’ll get back to work.”
“Mm,” Eric nodded.
Watching Michael Lynne leave, Eric finally let out a long sigh of relief. This matter was finally settled.
The reason he had handled this so cautiously was not because he was worrying unnecessarily. Miramax in his previous life was a perfect example. Because of conflicts with Michael Eisner, the Weinstein brothers left Miramax, directly causing the company’s operations to fall into stagnation. After struggling for several years, Disney ultimately had no choice but to shut Miramax down.