Chapter 338： The possibility of cooperation

Various aspects of information were quickly gathered into Ronan's hands. After Robert Lee confirmed that Hollywood Video was indeed in private contact with Ruiou through several rounds, Ronan was also making various preparations, especially in terms of funding.

In the past two years, Relativity Entertainment has achieved great success in film production and distribution. In addition to the funds necessary for the normal operation of Embassy Pictures and Shahai Entertainment, it has also accumulated a sum of up to 200 million US dollars in circulating funds.

Two hundred million US dollars is a lot to say, but Relativity Entertainment first bought Netflix, and then injected capital into Netflix. To maintain the normal operation of the company, emergency funds need to be reserved. If it really bids for Ruiou with Hollywood Video, it will inevitably lead to Working capital is severely strained.

So Ronan once again walked into the Los Angeles branch of Bank of America.

Unlike the previous application for a $35 million personal loan, Ronan came to make a loan in the name of Netflix.

Judith received Ronan in the VIP lounge.

The young deputy head of the bank's credit department smiled brightly: "Good morning, Ronan."

Ronan shook hands with her: "Hello, Judith."

Judith exchanged a few words with Ronan, and tentatively asked: "You come here this time, do you want to handle bank credit business?"

Ronan handed the relevant materials he prepared to Judith: "I bought an internet company called Netflix in December, and now Netflix is ​​preparing to participate in the acquisition of another company. The funds are a bit tight."

"With our good cooperation and your credit rating, loans are not a problem." Judith said: "You are one of the customers with the highest credit rating of Bank of America Los Angeles branch."

Ronan half jokingly said: "In order to maintain the good cooperation between us, most of my personal income this year will be used to repay the loan, and the quality of life has deteriorated seriously."

After the 9/11 incident, he borrowed 35 million US dollars from the Bank of America and invested it in the stock market by a personal foundation. At that time, he used income from the next few years as collateral.

Judith understood Ronan and the development of Relativity Entertainment, and said: "This loan is too easy for you."

Ronan turned to the topic: "This time I applied for a loan from Bank of America in the name of Netflix."

Judith said without hesitation: "No problem." She then asked: "What about the amount?"

Ronan thought for a while and said: "The amount is currently undecided. It may take up to US$100 million to US$120 million, or less than US$30 million. This loan is used by Netflix to acquire the copyright of a company or some of their works. ."

Judith asked again: "What about the time?"

"No more than one month at the latest." Ronan said directly: "I need Bank of America to prepare funds in advance. Once Netflix has determined the loan amount, it can go through the relevant procedures as quickly as possible."

Since the two sides have cooperated many times, Judith does not need to think too much, and directly said: "These are no problems." She reminded: "Quick loans require proper collateral."

There are not many things that Netflix can mortgage. The most valuable is equity, but Ronan cannot pledge equity.

Ronan was well prepared and said, “Among the Ruiou company acquired by Netflix, 18,500 film and television works are leased and sold. This acquisition is highly likely to succeed. If possible, Netflix will lease and sell in the future. The copyright is used as collateral."

He pointed to the information: "There are detailed instructions."

Judith opened it and took a brief look and said: "I will submit the review as quickly as possible. As long as it passes, these are not problems."

Only after the acquisition was successful did Netflix need a loan. The 18,500 film and television works would naturally be owned by Netflix, and thus meet the mortgage conditions.

Once the acquisition is unsuccessful, Netflix naturally no longer needs a loan from the Bank of America, and only needs to pay a handling fee to the bank.

This requires customers to have a good credit rating and a deep cooperation relationship with the bank.

Judith knows very well that Ronan is fully qualified for Bank of America in these respects.

The preliminary procedures for the loan were handled quickly, and Ronan received the support of the Bank of America and no longer worried about funding issues.

Robert is also further inquiring into the contact between Hollywood Video and Ruiou to learn more about the situation.

While Relativity Entertainment maintained contact with Ruiou, Stuart Coleman did not ignore the Hollywood Video Company.

"Mr. Marquez, I have always had a good impression of Hollywood video."

In the meeting room of REO, Stuart Coleman said to Marquez Perlman, senior vice president of Hollywood Video: "Bestda is the dominant player in the industry and has spared no effort to suppress other video tape chains. Hollywood Video It is the banner of the fight against arrogance, Blockbuster, and it has also won many benefits for small companies such as Ruiou."

His expression is all sincere: "Since I am going to sell Ruiou, the first choice is of course Hollywood Video."

Marquez Perlman is a gentle middle-aged man, knowing that Stuart Coleman hasn't finished speaking yet, so he doesn't mean to speak at all.

Stewart Coleman took a look at Marquez, and said: "I originally planned to sell Rio to Hollywood Video, but Netflix under Relativity Entertainment appeared. Netflix’s boss Ronan Anderson offered a The price is extremely impressive. I am responsible for all shareholders and employees of the company. I can only say sorry for your company’s $80 million quotation..."

Marquez Perlman frowned and said: "Mr. Coleman, we have been talking for a long time, and Hollywood Video has shown enough sincerity. We are not your REO company."

Stewart Coleman said with a smile: "Rio has no shortage of buyers."

"Let's stop here today." Marquez Perlman took the initiative to leave: "I hope Mr. Coleman can think carefully."

Stewart Coleman sent two people from Hollywood Video out of the company.

Stepping out of the office building and getting in the car, Marquez Perlman said to the assistant: "You should find out what Stuart Coleman said as soon as possible."

He then asked: "What is the situation of relativity entertainment?"

The assistant replied: "Relativity Entertainment is the holding company of Shahai Entertainment and Embassy Pictures. It can be said that it is a medium-sized company with relatively good performance in Hollywood."

Marquez Perlman understood: "It turned out to be the home of Embassy Pictures."

The assistant said: "We have business dealings with Embassy Pictures. The copyrights for the rental and sale of video tapes for films such as "The Bourne", "Reaper Is Coming" and "The Mankind Removal Project" all come from Embassy Pictures. What he thought of, He also reminded: "Ronan Anderson is the producer of these films."

Marquez Perlman knew the name: "Hollywood's youngest billionaire?"

"Yes, that's him." The assistant said: "Relativity Entertainment has developed rapidly in the past two years. It seems that it just acquired a company in December last year, and it is very possible to continue to expand."

Marquez Perlman asked the driver to drive, and then fell into thinking. After a few minutes, he said to the assistant: "You try to get in touch with the Relativity Entertainment, and test your attitude towards Relativity Entertainment."

"Also, draw up a report and I will submit it to the company's board of directors. There may be twists and turns in this acquisition."

Marquez Perlman is not optimistic. Whether in Hollywood or other business circles, similar situations will eventually evolve into bidding acquisitions, and the acquirer is likely to pay far more than expected.

The acquisition of REO’s business is one of Hollywood Video’s important plans to expand its own chain rental business. REO’s chain stores in Southern California can effectively help Hollywood Video to seize market share in the film rental and sales market.

In recent years, Blockbuster seems to have developed very well, but Hollywood Video’s market analysis department has noticed that the near-monopoly status of the giant has caused Blockbuster to provide customers with poorer and worse services, and customer resistance has been year by year. Rising, even many customers would rather go to a small shop with limited film sources to rent films than deal with the arrogant Blockbuster.

The arrogance caused by the long-term monopoly has made Blockbuster, the former giant, lack the wit and flexibility.

Although Blockbuster still looks to be performing well now, Hollywood Video, according to various analyses by Blockbuster, shows that in the next two to three years, the rental market, where Blockbuster has an absolute dominant share, will likely undergo tremendous changes.

As long as Hollywood video is prepared, it is very hopeful to replace it.

Expanding chain stores and providing better services are all necessary conditions.

Hollywood Video has just completed a new financing and has begun to make corresponding preparations. The key is to expand the chain to more than 5,000 stores within three years.

Marquez Perlman suddenly thought of the video rental website of Ruiou and could not help but shook his head slightly. Originally, Ruiou's development was not bad, but he wanted to develop this unreliable business. Consecutive losses since 1998...

These are all lessons learned on the ground.

Hollywood Video is interested, and Relativity Entertainment is also experimenting. In addition, Embassy Pictures and Hollywood Video have had business dealings. The two parties soon had the first tentative contact. After that, Robert Lee represented Ronan and the management of Hollywood Video Layer talked again.

The specific situation was quickly fed back to Ronan.

On the other hand, the tentative negotiation between Relativity Entertainment and Ruiou was very unsuccessful. Because of the relationship between the competitors, Stuart Coleman made a sky-high price of 120 million US dollars.

Ronan temporarily put aside the negotiations with Ruiou, and after seeing the information obtained from the special investigation and the situation of Robert Lee's feedback on the contact with Hollywood Video, he decided to communicate face-to-face with the management of Hollywood Video.

In the acquisition of Ruiou, there is no need for the two parties to become a hostile relationship, and there is completely the possibility of cooperation.