Chapter 681: Reward Plan (Bonus Chapter 1)

Danilisi Cinema City. It was July 25, another Monday.

Because he was going to watch the rough cut of "Suicide Squad" together in the afternoon, Terry Semel arrived early and had lunch with Simon in the executive dining room of Danilisi Cinema City.

He came to complain.

"$50 million in bonuses, Simon, isn't that a bit much? Since it's not stipulated in the contract, we don't need to pay such a sum. Or, like before, $20-30 million should be enough. If we give $50 million this time, the next few projects will surely ask for even more, and we won't be able to afford it then."

Terry Semel wore a distressed expression as he spoke.

The topic was about the reward plan Simon had personally finalized for the creators of "Batman: The Dark Knight Rises."

According to last week's box office statistics, "Batman: The Dark Knight Rises" had not only surpassed $330 million in North American box office but also grossed $530 million overseas, bringing the global total to $860 million. Given the current box office trends worldwide, it was certain that the global box office for this concluding piece of the Batman trilogy would surpass $1 billion.

Moreover, in just over a month since its release, sales of various types of merchandise related to "Batman: The Dark Knight Rises" had been as strong as ever. Preliminary statistics showed that the total sales of dozens of merchandise items worldwide had already exceeded $1.1 billion. Although the movie's popularity was beginning to wane, it was expected that over the next few years, the total sales of project-related merchandise would reach around $2.5 billion.

Aside from box office and merchandise, adding future revenue from VHS tapes and television broadcasts, "Batman: The Dark Knight Rises" would once again be a super cash cow, bringing in $1 billion in net profit for both Danilisi and Time Warner, the two co-producers.

Simon was never one to expect the horse to run without feeding it.

To ensure the smooth advancement of the massive DC Cinematic Universe series, Simon had initially signed very stringent contracts with all the key creators. Compared to the substantial profits from several consecutive DC blockbusters, the salaries of the superhero actors were miserably low.

Simon would not allow any changes to the initial contracts. However, besides the basic salaries, starting from "Batman Begins," he had always set aside a bonus for the main cast and directors as the projects succeeded.

In the past, the total bonus for a series of projects had never exceeded $30 million.

This time, however, Simon decided to grant a $50 million bonus at once, which immediately caused Time Warner a lot of pain.

Apart from "Batman: The Dark Knight Rises," Warner Bros. had two other projects, "Maverick" and "I Love Trouble," both of which ended in failure, with substantial losses that needed to be covered by the profits from "Batman: The Dark Knight Rises."

Now, with $50 million suddenly taken out, it could even affect Time Warner's year-end financial report.

Simon was unmoved by Semel's complaints and said, "Terry, the $50 million is to reward Bont, Adam, and Valeria for their contributions to the Batman series over the past few years. Future bonuses will depend on the circumstances. And, you should understand, compared to the profits we've gained, this amount is not much at all, only about 5% of the project's net profit. If not for the original contract restrictions, each of them could have demanded 10% or even more of the net profit share by now."

Although the DC Cinematic Universe had already created a phenomenon-level movie series miracle, compared to Hollywood A-listers like Steven Spielberg, Arnold Schwarzenegger, and Mel Gibson, the earnings of the DC Cinematic Universe creators were indeed pitiful.

$50 million seemed a lot, but it wasn't more than what Jack Nicholson alone earned from Tim Burton's "Batman" in the original timeline. Moreover, this sum was divided among many people, including director Jan de Bont, male lead Adam Baldwin, and female lead Valeria Golino. Among them, Bont and Adam received the most, each getting only $10 million.

Simon could certainly stick strictly to the contract terms and pay no more than stipulated. However, this would severely dampen the enthusiasm of the creators. The first phase of the DC Cinematic Universe had only completed its first half, and the road ahead was long. Being too stingy would only be counterproductive.

Terry Semel understood this reasoning but said, "Simon, if I recall correctly, you don't seem to like Adam very much."

Semel was referring to Adam Baldwin.

After the success of "Batman Begins," Adam Baldwin had the idea of renegotiating his contract, for which Simon had reprimanded him.

Simon nodded, then shook his head and said, "That's a thing of the past. Adam has behaved himself over the past few years. Besides, even if I don't like someone, as long as they don't cross the line, I'll give what's due. These are two separate matters."

Terry Semel, knowing that it would be hard to change the young man's mind, proposed an alternative, "Alright, Simon, how about paying in installments? $50 million, let's start with $15 million and spread the rest over the next few years."

Time Warner was not in a great financial situation now, and spreading the $50 million over the coming years would mitigate its impact on their financial report.

As long as the total amount remained the same, installment payments would still maintain the enthusiasm of the DC creators.

Simon knew this must have been a plan Semel had come up with before coming here, and he agreed to it readily.

Semel, though not entirely satisfied with this outcome, accepted it and shifted the topic, "Simon, have you considered that Adam's contract has only two movies left?"

Simon, cutting his steak, asked casually, "And?"

Semel said, "After the planned 'Justice League,' I think this series can continue."

Simon slowly chewed a piece of steak and said, "Terry, I told Stan Lee before that Danilisi Entertainment might start the Marvel Cinematic Universe in 1995. Given the current situation, that's unlikely. However, after 'Justice League,' this will certainly not be delayed any longer."

The reason why Time Warner couldn't grasp the control of the DC Cinematic Universe was not just because Danilisi Entertainment firmly held the rights to DC's three major superheroes, but also because of Marvel.

The profits generated by the DC Cinematic Universe were so substantial that if there were no Marvel as a backup, Time Warner might go all out, forcing Danilisi to compromise on the share of voice.

The current situation, however, was that if Time Warner were dissatisfied with their share of voice and profit and wanted to renegotiate or break off the partnership, it would result in Time Warner losing everything, while Danilisi could immediately start its own Marvel Cinematic Universe.

Terry Semel clearly didn't want to delve into the topic of Marvel and said, "I mean, the two can coexist, right?"

Simon smiled and said, "Of course they can coexist. However, Terry, I think you might be looking too far ahead. Frankly, if you can't succeed Steve Ross as Time Warner's chairman, how many more years do you think you'll stay in the company?"

In Simon's memory, Terry Semel left Time Warner around 2000, after the AOL-Time Warner merger, and then joined Yahoo as CEO.

This time, there would be no AOL-Time Warner merger. However, given Time Warner's complex internal power struggle, once Steve Ross's influence faded, the management from the Time Inc. side would not allow Terry Semel to rise further. As a joint CEO with Robert Daly, if he couldn't advance to chairman, the only outcome would be to leave.

Semel, hearing Simon's words, immediately forgot about the DC issue and remembered his own situation.

Though he and Michael Eisner, now lying in Manhattan's Sinai Medical Center, were the same age, even five or six years later, he would still be only in his early fifties, far from retirement age. Having worked at Warner for so many years, Semel was reluctant to lose everything suddenly.

After a moment's hesitation, Semel suddenly said, "Simon, can you help me? Help me become the next chairman of Time Warner?"

Just the DC Cinematic Universe alone was enough to influence the internal management of Time Warner.

If, at the peak of internal struggles, Danilisi Entertainment suddenly suggested that the next leader of Time Warner could determine whether both sides could continue their cooperation on the DC Cinematic Universe, a significant portion of shareholders and board members would take Simon's personal intentions seriously.

Additionally, BlackRock Asset Management had been steadily acquiring Time Warner stocks over the past few years, with their stake now reaching 4.9%, ready to surpass the 5% threshold.

Buying Time Warner stocks was mainly for investment purposes.

Time Warner hadn't fully recovered yet, but in the coming years, with federal deregulation, it could venture into the ISP field, capitalizing on the internet boom and sending its stock prices soaring.

Though the current holding hadn't surpassed 5%, BlackRock could easily increase its stake when necessary. At that point, public disclosure would be one thing, but more importantly, as a shareholder with more than 5%, BlackRock could demand a board seat at Time Warner, gaining voting rights on major decisions.

These were Simon's bargaining chips to help Terry Semel become the next chairman of Time Warner.

Therefore, Semel had no doubts about Simon's capability to help him and didn't need much explanation. Simon simply asked, "So, Terry, what do I get in return?"

This time, Semel didn't hesitate

 and said, "An ally, the strongest ally."

Simon noncommittally said, "I'll consider it."

Semel didn't press further. The promise of an ally was too vague and would need actual actions to back it up. He understood the young man wanted to see his performance in the coming years.

Since Steve Ross's death, Semel had always stayed close to Simon, often taking over matters that could have been handled by Warner Bros.' higher-ups himself, indicating that he had certain thoughts early on.

Having reached a tacit understanding, they moved on to another topic. Semel said, "I heard Disney's management is negotiating with Eisner to have him voluntarily step down as chairman and CEO. What do you think of this acquisition, Simon?"

Simon was aware of this.

Michael Eisner suddenly suffered a heart attack last Friday. Even if he successfully got through the highly risky heart surgery, it would take two or three months for him to return to work.

With Eisner's illness and recent events, Disney's major shareholders and the board, who were leaning towards selling, would no longer tolerate Eisner, who strongly opposed the sale, regaining control of the company.

In theory, the Disney board could simply decide to remove Eisner, which was within their authority.

However, Eisner's health could not withstand additional stress. If the Disney board acted on their own, causing further harm to Eisner, the public outcry alone would force the board to resign en masse.

Thus, they had to carefully discuss this matter with the bedridden Eisner.

Simon said, "The sale of Disney is inevitable. If Eisner is smart enough, he should accept the board's conditions and ask for a substantial compensation. This way, no matter what happens in the future, he'll have a significant sum left."

Semel's eyes flickered as he thought of Steve Ross.

When Ross learned he had cancer, he began preparing for his family's future. Now, even after Ross's death, his family continued to receive millions of dollars in various subsidies from Time Warner for ten years, according to the agreement Ross had signed with the company.

Now, Eisner faced a similar situation.

If he wasn't entirely blinded by power, he should know what choice to make this time.

By voluntarily stepping down, besides the contractual terms, he could also ask for additional compensation from Disney. This way, whether or not he survived the heart surgery, his family would have a more secure financial future. On the other hand, if he stubbornly clung to his position and obstructed the high-priced sale of Disney, his days at Disney would be numbered, even if he recovered.

Considering this, Semel asked, "So, Simon, you don't oppose Disney being acquired by Vivendi?"

Simon smiled at Semel, "Do you think I should?"

Having been in Hollywood for years, Semel knew the outcome of foreign capital meddling in Hollywood all too well. A moment's thought clarified it.

Indeed, Simon had no reason to oppose the acquisition, and might even secretly promote it.

With Danilisi Entertainment already strong in Hollywood, further growth could only come from eroding the market share of other competitors. Once Disney was acquired by Vivendi, losing its status as an American company, Danilisi Entertainment could do so without any worries.

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