Chapter 579： Quote

Chapter 579

Buffett himself is very optimistic about the video tape rental industry. For this reason, he also studied the information of Baishida in detail. From the mid-eighties, the videotape industry generated profits as much as the movie box office, and has 3,000 stores. Vision is undoubtedly the 'Wal-Mart' of the video rental industry. The annual profit of Blockbuster is not much less than that of the seven major Hollywood studios. Hey, and the video rental giant also has Buffett’s most fancy cash flow. The videotape industry has been thriving for years, but Buffett does not feel that there is a bubble in this industry. Therefore, Eric’s contempt for Baishida makes Buffett very confused: “Eric, are you not optimistic about the videotape? The prospect of the industry?"

The videotape and the upcoming DVD rental industry will have to flourish for at least a decade. Eric certainly cannot be optimistic about this industry. He is not optimistic that at least the Baishida chain will soon be phased out after a few years. .

"Mr. Buffett..."

Eric just opened his mouth. Buffett interrupted his words softly. He smiled and said warmly: "Eric, you can call me Warren. I don't want the communication between us to be like formal business negotiation. What do you think?" ”

"Well, Warren," Eric nodded with a smile. "If you've been to some of the Blockbuster rental chains, you'll find it's always cumbersome to find some videotapes, and the various BesTVs. The charges are also very unreasonable. I believe that if there is a better video rental business model, it is almost inevitable that Blockbuster will be eliminated."

Buffett did not have any rich man's posture, and continued to ask: "I think you must have considered some of the better business models you have said?"

"Of course. For example, the Internet. We can build a dedicated video rental website. Customers want a movie, just enter the name of the movie on the website, you can easily find detailed rental information about the movie, we can even Establish a dedicated postal system to make it easier for customers to rent videotapes."

Buffett's attention to the high-tech industry is not too much, which can be seen in his portfolio. Ni Duan, Berkshire Hathaway is basically involved in traditional industries, however. Because of the current information highway program that Clinton is vigorously promoting, Buffett has also received a lot of relevant information: "Eric, don't you think that there are too few online users?"

Eric has not paid much attention to the growth of Internet users in North America in the recent period, but he can easily find a similar example: "It is not too much, but users who can access the Internet tend to have considerable spending power. When the personal computer was just produced more than a decade ago, perhaps no one realized that this expensive household appliance that seems to be not very useful is now able to sell millions of units each year. In this decade, North America and even The world has accumulated tens of millions of users with personal computers. The economic strength of these people is usually not too bad. In the case of more and more Internet content, I believe that most people will choose to intervene in the network."

During his research on Eric's profile, Buffett also deliberately landed on the Yahoo portal and established his own online email account. Although many people think his personal style is very conservative, Buffett is a moment to remember. People who learn and accept new things. He feels that the online mailbox is really much faster than the letter, but because of the current limitations of various software and hardware, Buffett can't think of the profit prospects of these network services. Buffett has always been a profit-seeking investor. And strictly adhere to the principle that investment must be rewarded. If you invest tens of millions of dollars but can't get a return, he can't think of one thing and there is no need to continue to do so.

"Eric, before I came, I saw the Yahoo portal you invested in. I want to know if you built this website for investment or pure public welfare?"

"Of course it is an investment," Eric felt that Buffett had obviously taken the topic away. Today, it is clearly the firefly's acquisition of the TV network. However, Eric is also very clear that Buffett is a very strong person asking questions. From many of Buffett's materials, he can see that Buffett often bombards the responsible person of the company when he is interested in a company. However, Eric did not mean anything impatient. In fact, many commercial transactions are determined in this kind of chat you come and go. As for the kind of business negotiation, it is often the detailed negotiation after the transaction intention is reached.

"So, for example, Yahoo! Portal, when do you want to make it profitable and in what way?"

"In the last few years, I have never considered Yahoo to be profitable. It is still in the market cultivation stage," Eric replied slowly. "Warren, imagine that if Yahoo has more than 100 million users, those advertisers will How much will you be willing to advertise on the Yahoo website?"

100 million users!

Buffett narrowed his eyes and did not regard Eric as a fantasy. As Eric just said, ten years ago, no one knew that personal computers could now sell millions of units each year. If Internet users really grow on the scale of millions or even millions of users every year, then 100 million users are not out of reach.

Because of the advertising revenues of newspaper media, Berkshire has a number of newspapers, but the largest of them, the Washington Post, currently has an average daily circulation of only a few million, but even these millions. The sales volume can bring hundreds of millions of dollars in profits to the postal company every year. Therefore, the Internet media with 100 million users will definitely generate more profits than any traditional paper media after finding the right means of profit.

Although Buffett is not an impulsive person, when he has obviously changed his mind at this time, this point of action does not allow him to immediately join the Internet wave.

For a moment, Buffett took a few mouthfuls of cola in front of him and gently lowered the cup. Looking at Eric said: "Eric. The prospects are really tempting. I really hope to see Yahoo appear as you said in the future. Then, let's talk about the TV network, I listen. Say you talked to Barry Diller a few days ago?"

"Yes," Eric showed with a regretful expression. To be honest, "It is a pity that he did not intend to join the fireflies."

Buffett does not change: "So, if I promised to sell you ab, how do you plan to place Tom. You know, we are good friends, I need to consider for the benefit of my friends."

"If you can successfully acquire ab, Firefly will not make too many adjustments to the personnel of ab, and the performance of ab in the past few years is enough to prove the management ability of Mr. Tom Murphy. Therefore, the firefly will mainly be in the next few years. Increase the investment in ab content. We all know that the TV network is also like a sales platform, and the TV program is the 'commodity' it sells. Any customer at the same price will be more willing to patronize the quality. Higher goods store."

Buffett is clearly satisfied with Eric's answer. I started to ask other questions he was concerned about, and related to Eric’s problems that might arise after the acquisition of the TV network in the future. The two people seemed to be chatting about an insignificant thing from beginning to end, and never talked about the most important thing. The issue of the purchase price.

After more than an hour, after the two men finished a large bottle of Coke, Buffett finally said: "Eric, overall, I am satisfied with the various options after you acquired the TV network, so we are now I can talk about the issue of the purchase price."

Buffett and Tom Murphy now own a majority stake in Ab TV, which means that as long as the two men nod, Firefly Pictures will almost no longer benefit from the acquisition of Ab.

However, Eric is not too easy at this time, because he has realized something else. If Buffett only intends to sell ab to the fireflies, he will not talk to himself for so long, maybe he will only be very direct. A local sale price.

Sure enough, Buffett immediately said: "Eric, although I am more optimistic about this transaction, but I do not intend to cash out the shares of ab. I have already talked with Tom, we will only trade in cash at most. The way to sell the shares of Sancheng Ab in the hands, and the other 70% I hope to be able to invest in the Firefly Films as a capital."

Eric has already anticipated Buffett’s attempt. From the bottom of his heart, he does not want to exchange in the form of cash plus stock exchange, but now it is different from the acquisition of Disney. When Firefly acquired Disney, Disney's performance is in a downturn, and the fireflies, which were not too big at the time, completely swallowed Disney in the form of a snake swallow. Most investors are not too optimistic about the firefly acquisition, and Disney does not have the majority of the controlling shareholder like ab, the equity is quite scattered, so the firefly film industry can achieve the attempt of cash acquisition.

But in the past two years, the performance of Firefly Films is really dazzling. Although this year's financial report has not been released, the net profit of more than 1 billion US dollars has almost no suspense.

In addition to the Time Warner Group, which is bigger than Fireflies, Hollywood does not have any film company that can achieve such annual profits. Therefore, the investment institutions around the world have always focused on the Firefly Films. I hope that the Firefly Films will release news such as the listing. In this case, the fireflies want to expand towards the TV network. Whether it is ab or the less powerful nb and bs, they will definitely not give up this firefly. Great opportunity.

As for Buffett’s proposal to invest in fireflies with a 70% stake, Eric did not rush to bargain, but asked: “So, Warren, I want to know, how many fireflies you intend to exchange for a 70% stake? What about the shares?"

"49%," Buffett quickly replied, apparently considered for a long time: "Eric, we can use ab's current stock price to calculate, ab's valuation is about 10 billion US dollars. And for Firefly Pictures, I give A $15 billion valuation, and I know that you will never give up the absolute controlling stake in Firefly Pictures, so we don’t require a controlling stake. You are still the biggest shareholder. I will not intervene in the management of Firefly in the future. how do you feel?"

How, of course, not very good.

Although the business of Firefly is not as extensive as Time Warner, the annual profit of Firefly is absolutely comparable to that of Time Warner. Although many people follow the normal development track of Hollywood film companies, they will definitely feel that this profit rate is only temporary, but Ai Rick is very confident that the fireflies will be able to maintain high growth for a long time, even if there is no TV network, the future profits of fireflies will only rise. After all, the film or TV series produced by the film company is also a commodity, and Eric has the ability to make and select 'good quality goods' that everyone can't match.

"Warren, this price is too high, I will definitely not agree," Eric did not turn around and said: "Firefly's net profit last year was close to one billion US dollars, and this year may even exceed Time Warner, and we are all I know that the market value of Time Warner Group is now close to 30 billion US dollars, and the firefly has a valuation of only 15 billion US dollars. Don't you think this is too low?"

"Eric, I admit that the firefly's performance in recent years is very dazzling, but we are also very clear that the return on investment in the film industry is very unstable, although everyone recognizes your talent in film, but this is not It means that you won't fail in the future. Just like Spielberg, Hollywood was almost Spielberg's world in the 1980s, but just in the 1990s, Spielberg ushered in Hawke. Captain's failure. Moreover, we are also very clear that the market value of a company can't be calculated according to the profit in a few years. Time Warner owns all industries such as film, television, publishing and music, which means it's The anti-risk ability is very high. Even if a certain loss occurs in a certain business in a certain year, it will not affect the overall revenue of Time Warner. However, the firefly relatively downloads a lot of business scope, and the business such as surrounding income basically Both rely heavily on film performance." (To be continued.)