It's reasonable for me to be a three-time Golden Horse Award-winning director and an all-around

Chapter 217 Don't you dare lust after my body! (Seeking monthly votes)

"As of now, Warner Bros. International Cinemas has a total of 8 cinemas and 67 screens in the Chinese market, with 1449 seats."

Many of these cinemas were built in collaboration with other investors, such as the Shanghai Yonghua Cinema (in partnership with Shanghai Film Group), the Nanjing Shanghai Warner Cinema, and four cinemas in Chongqing, Changsha, Nanchang, and Shenzhen (in partnership with Shenzhen Investment Holdings Co., Ltd.)...

Inside the private room, Yin Gang, the China Director of Warner Bros. International Cinemas, was holding a document and explaining the current situation to Lü Rui in detail.

Since entering the mainland market in early 02, Warner Cinemas has experienced very strong growth thanks to the financial support of its parent company.

In 2003, the State Administration of Radio, Film and Television introduced the "Interim Provisions on Foreign Investment in Cinemas," which allowed foreign ownership of cinemas in seven cities, including Beijing and Shanghai, to be capped at 75%.

In response to this policy, Warner Bros. immediately seized the opportunity to increase its investment and vigorously expand the number of cinemas.

In less than two years, they have established eight cinemas.

As a result, at the end of 05, the "Several Opinions on Introducing Foreign Investment in the Cultural Field" was issued, which directly required that newly built cinemas must be owned by Chinese parties with a stake of more than 51%, and also canceled the special policies for pilot cities.

This move effectively strangled Warner Bros.

According to U.S. Generally Accepted Accounting Principles (GAAP), Warner Bros. cannot include theater revenue in its financial statements if it does not hold a controlling stake.

This was completely inconsistent with the headquarters' investment requirements, so the withdrawal of investment became inevitable.

Following the announcement, Warner Bros. suspended all its cinema investment plans in China, which also created opportunities for other companies.

For example, Wanda Cinemas only had 5 cinemas and 40 screens last year, and its annual box office revenue was 1.32 million yuan, ranking 7th in the country.

However, four new cinemas opened in the first half of this year, adding 55 screens, showing a very strong momentum.

CGV Cinemas, owned by South Korea's CJ Group, also officially entered the Chinese market this year. Through cooperation with mainland companies and leveraging Hong Kong capital, it has gained a significant market share in mainland China.

But none of this matters to Warner Bros. anymore, because the withdrawal of investment has become an inevitable and unchangeable fact.

In fact, Lu Rui is not the only one eyeing Warner Cinemas and preparing to take it over.

On the other hand, companies such as China Film Group, Shanghai Film Group, Edko Films, and Stellar Media are all planning to take over the business.

However, state-owned enterprises have too many procedures and slow decision-making processes, so negotiations have been dragging on without any progress.

This gave Lü Rui an opportunity.

He stated immediately upon opening his mouth: "Ruixing Group will not extend credit; the funds will be provided in one lump sum."

With this advantage, Zhou Haoran felt very confident when leading his team to negotiate with Yin Gang.

Furthermore, Lu Rui's good relationship with Warner Bros. also greatly increased the success rate of this negotiation.

Just like now, after explaining the situation, Yin Gang and Lü Rui were exchanging toasts when Yin Gang remarked, "Working with Chairman Lü is much easier for me, and it best meets the headquarters' requirements."

Lu Rui smiled and clinked glasses with him again: "We're all in business, and efficiency is key. I took over these cinemas to improve our distribution network. We might have more opportunities to cooperate in the future."

"Haha, that makes sense. When Warner Bros. films enter the mainland market in the future, we'll have to ask Chairman Lü to give them some consideration in terms of screenings."

"a piece of cake."

Fan Bingbing, who was standing nearby, stood up at the right moment, picked up the wine bottle and poured wine for the two of them, with a polite smile on her face.

Although she couldn't get a word in edgewise, she memorized every word of their conversation and the more she thought about it, the more she understood how brilliant Lü Rui's move was.

During this period, while preparing for her personal studio, she specifically studied the upstream and downstream rules of the film and television industry.

Production is the front end, and theaters are the back end; the two are inseparable.

Without good movies, theaters are just empty shells.

However, without guaranteed screenings in theaters, even the best movies struggle to achieve high box office returns.

If a film company wants to gain a foothold, it can't just focus on making movies; it must extend into investment and distribution.

And cinemas are the most crucial link in this chain!
Fan Bingbing previously thought that her plan for her personal studio was already far-sighted enough.

After all, to date, no artist in China has had the "foresight" to open their own personal studio.

Compared to Lü Rui, she realized that her own plans were nothing compared to his.

After listening for more than half an hour, she finally understood.

Lü Rui's move is far from simply taking over a few cinemas; it's clearly about expanding his distribution empire.

With theater chains in hand, Ruishijie's films will be able to secure more stable screenings and even influence the release schedules of other films, which is a real source of industry influence.

Although no one mentioned how much money Lü Rui spent to acquire the shares during the meeting, Fan Bingbing could roughly calculate the amount in her mind.

With 8 cinemas covering core cities such as Shanghai, Nanjing, and Chongqing, plus equipment and venue leasing rights, the total amount would be no less than 2 million!
This number made her secretly gasp.

After all, even if she worked herself to the bone for a year, she could only earn a maximum of 1 to 2 million.

For her, 2 million is no small sum!

Lü Rui's financial strength and boldness far exceeded her expectations!

At this moment, watching Lü Rui calmly discuss the details of the handover with Yin Gang, her admiration for him grew even stronger.

She had originally hoped to build some personal relationships tonight, but now she felt that learning and understanding the industry landscape in this setting was more important than anything else.

She secretly calculated that if she could latch onto Lü Rui's coattails, not only would her role in "Pacific Rim" be secure, but the studio's future development would also be much smoother, guaranteeing a profit!

……

After a few rounds of drinks, the atmosphere in the private room gradually shifted from lively socializing to pragmatic negotiations.

Lu Rui got up and, together with Yin Gang, the person in charge from Warner Bros. headquarters, and Zhou Haoran who was accompanying him, moved to the next meeting room.

The room was softly lit, and the aroma of tea wafted through the air.

The agreement documents have been prepared and are just waiting to be finalized.

The group sat down around the tea table, and Yin Gang pushed the final version of the agreement in front of Lü Rui: "Chairman Lü, as we discussed before, Ruixing Cinema Line will take over Warner's shares in eight cinemas in China for 2.12 million yuan."

Of these, the two cinemas that partner with Shanghai Film Group hold a 51% stake, the four that partner with Shenzhen International Trust & Investment Corporation hold a 75% stake, and the other two hold a 60% stake...

"And that cinema we're collaborating on with Guangzhou Jinyi Cinema, although Warner Bros. hasn't actually invested yet, the agreement clearly states that you will take over the subsequent investment matters..."

If it were just these shares, it wouldn't actually cost more than 2 million.

Some of the additional funds were mainly used to acquire cinema distribution licenses.

Applying for this yourself is extremely difficult; the various qualification reviews alone can drive you crazy.

However, direct acquisition can save a lot of trouble. At worst, you just have to pay money to buy it, which is much faster than applying for it yourself.

Lu Rui quickly scanned the terms of the agreement, and after confirming that they were consistent with previous communications, he picked up a pen and signed his name at the end.

The heads of Yin Gang and Warner Bros. headquarters who were standing next to him also signed their names.

With the final stamp falling, Warner Bros. Cinemas' withdrawal of investment from China has finally come to an official end.

"Pleasant to work with."

Lu Rui put down his pen, reached out and shook hands with Yin Gang, his tone filled with passion for the future.

"Happy cooperation!"

Yin Gang gripped the handle tightly, a relaxed smile finally appearing on his face, and the weight that had been hanging over his heart for months was finally lifted.

Ever since the headquarters decided to withdraw its investment last year, he has been thinking every day about how to exit smoothly.

Complying with accounting standards while ensuring that assets do not shrink is no easy task.

Now that Lü Rui is willing to take over the entire investment in one go, and can even get the funds in his account instantly, it's a lifesaver for him.

“I will have Zhou Haoran lead the handover process and have his team connect with you,” Lu Rui said, pointing to Zhou Haoran beside him. “The daily operations of the cinema will remain unchanged for now. We’ll stabilize the staff and audience first, and then make adjustments after a period of adjustment.”

"Don't worry, Chairman Lü, I'll talk to the cinema managers tonight to ensure a smooth handover and that normal operations aren't disrupted," Yin Gang readily agreed.

After signing the agreement, the group returned to their original private room and continued chatting for another half hour.

From the cinema's visitor flow data to the subsequent film scheduling plan, Yin Gang spoke frankly, which can be considered as giving Lü Rui a complete overview.

It wasn't until after 11 o'clock that he got up to say goodbye: "Chairman Lü, I'll head back now. I need to report the agreement to headquarters as soon as possible so they can rest assured."

“Okay,” Lu Rui got up and saw him to the door. “Be careful on the road, and contact me anytime if you have any problems.”

"Okay, there will be plenty of opportunities to cooperate in the future, haha."

Watching Yin Gang's figure disappear outside the gate, Lü Rui turned to look at Fan Bingbing beside him, whose cheeks were flushed and whose eyes were slightly drunk, and said with a hint of gratitude, "Thank you for your hard work tonight." The female executives from Warner headquarters were all quite hearty when it came to drinking.

If it weren't for Fan Bingbing's skillful handling of the situation and her ability to deflect drinks during the gathering, this social event probably wouldn't have ended so smoothly.

Upon hearing this, Fan Bingbing's eyes lit up instantly, and her voice became soft and sweet, filled with undisguised anticipation: "Director Lü is too kind. It is my honor to be able to help you."

She tilted her head slightly to look at Lü Rui, the implication in her eyes almost overflowing.

Now that the social engagements are over, shouldn't we be able to get to know each other better? Even just chatting a little longer would be nice.

Before she could say anything more, Lü Rui had already raised his hand to call the driver and instructed him, "Make sure to get Miss Fan home safely, and be careful on the way."

Fan Bingbing's smile froze for a moment, her heart filled with astonishment.

That's it?

Was it really just a matter of simply having her come for social occasions, using her and then sending her away?
Isn't this like pulling up your pants and then disowning the person?
She couldn't help but bite her lower lip. The alcohol made her bolder, and she asked with a hint of grievance and tentativeness, "Director Lü, can't I stay with you a little longer? I live alone at home, and it's so boring when I get back."

Besides, you... you just use them and then send them away like that? Isn't that a bit too heartless?"

Lu Rui glanced at her, naturally understanding what she was planning, but he didn't respond to the ambiguity in her words, simply saying in a calm tone:
"Go back and rest early. Don't worry, I won't forget. There's already a project being prepared for you."

The meaning behind those words couldn't be clearer.

I'll remember your contribution to tonight's social event and will repay you with a project, but don't expect anything else.

In short: Don't you dare drool over my body!

Fan Bingbing felt a mix of emotions, unsure whether she should be happy or worried.

The good thing was that he did get Lü Rui's promise, but the bad thing was that he couldn't get closer to him personally.

She clenched her fist, and finally responded softly, "Okay."

Then, she turned and left with the driver, looking back every few steps, her face full of unconcealed loneliness and grievance.

Once Fan Bingbing's figure had completely disappeared outside the door, Lü Rui and Zhou Haoran re-entered the tea room next door.

The waiter had already brewed fresh hangover tea.

The tea soup was clear and bright, and the steam carrying the aroma of the tea spread, dispelling the gloom of the drinking party.

After the two sat down facing each other, Lü Rui picked up his teacup, took a sip, and instantly switched to work mode:
"Next, we need to expedite the handover of cinema control and operations. We need to get the team and Warner people to clearly understand the audience flow data, rental costs, and employee contract status for each cinema, and come up with a preliminary operational plan within a week."

Zhou Haoran nodded and quickly took out his notebook to jot down notes: "I'll arrange for someone to make contact first thing tomorrow morning. Also, should we give Shanghai Film Group and Shenzhen International Investment Group a heads-up in advance? After all, we've taken over the shares of the cooperating cinema, and we'll inevitably have to deal with them in the future."

“Yes, this needs to be arranged too.” Lu Rui’s mind raced, his eyes clear. “Also, there’s that cinema in Guangzhou Jinyi that hasn’t received any investment yet. Have the finance department calculate the investment ratio and amount as soon as possible, so as not to delay the construction schedule.”

The two of them, while drinking hangover tea, went through the subsequent work arrangements in detail.

After briefly outlining the initial terms, Zhou Haoran couldn't help but exclaim, "Securing cinemas in eight core cities for just 2.12 million yuan is such a worthwhile move!"

"Now your movies will have a stable screening schedule, and we can say we finally have our own territory."

Lu Rui smiled, but a greater ambition was hidden in his eyes.

What he wants is not just "territory", but control over the entire distribution chain!

"We need to get the framework of Ruixing Cinema Line up as soon as possible. With the license in hand and the acquisition of these 8 cinemas, we must seize the opportunity to expand outwards. We can't just live off the land we have now."

"OK, I see."

Zhou Haoran nodded in agreement, already prepared for this.

Previously, the two had agreed that he would serve as the general manager of Ruixing Cinemas, taking full responsibility for the operation of the cinema chain.

These are his responsibilities, but the specific procedures need to be refined.

Zhou Haoran pressed on, "So what operating model will we use next? Relying solely on our own funds probably won't be enough to expand the scale."

"Financing," Lü Rui answered directly, his tone resolute. "We can bring in multiple investors, but we must use an AB share structure to keep the power in our hands."

He knew very well that the cinema industry was a capital-intensive industry.

Rent, equipment, and manpower are all money-burning pits that he simply cannot withstand on his own.

Moreover, cinema operations cannot be separated from the foot traffic of shopping malls. Buying land and building cinemas on your own is too slow. Cooperating with other investors is the fastest way.

He doesn't have the resources of Wanda to "build shopping malls with cinemas," so he can only rely on external forces to make a difference.

“I think we should prioritize connecting with state-owned enterprises and central enterprises,” Zhou Haoran added, following the train of thought. “For example, China Film Group, Shanghai Film Group, and companies like China Resources MixC that have commercial real estate resources.”

We can even negotiate with Vanke and Evergrande; they have shopping malls, and we provide cinema operation experience—it's a complementary arrangement.

Lu Rui did not deny the suggestion, and nodded slightly, saying, "Cooperating with companies with official backgrounds, the business-to-business model is indeed safe. Even if the procedures are a bit troublesome, at least there won't be any outrageous problems."

But then he changed his tone and became serious, saying, "However, 'safety' is relative. When we go to discuss cooperation, we must thoroughly understand the other party's background."

Especially for projects involving dealing with local officials, all promises must be written into the contract, and the terms must be scrutinized down to the smallest detail, leaving no loopholes whatsoever…

Lu Rui gave very detailed instructions on this matter.

After all, he didn't want his time-consuming and laborious investment in a company that had just been established and was ready to make money to be suddenly forcibly taken over by local authorities.

If that happens, there will inevitably be lawsuits, which is very upsetting.

“You must remember this: our core operation revolves around only one thing, and that is control,” Lu Rui emphasized, his eyes sharp. “No matter how many investors we bring in, the operational and strategic decision-making power must remain in our hands.”

"A/B shares are a guarantee. Even if we go public in the future, we must firmly hold onto our voting rights. This is the foundation of our confidence, and we absolutely cannot give them up."

Zhou Haoran quickly took out his notebook and wrote down the points "priority of control", "no loopholes in the contract", and "priority to connect with state-owned enterprises" in a prominent position.

When he looked up, his eyes were full of approval: "Don't worry, I will divide the team into two groups tomorrow. One group will handle the handover with Warner, and the other group will focus on financing and cooperation plans to ensure that the risks are kept to a minimum."

Lu Rui nodded slightly: "Okay, I'll leave this to you. We can discuss it further later and finalize the specific operational and development plan..."

In fact, his current thinking is very clear, mainly focusing on two directions.

First, we will unite with multiple parties to build at least five large-scale high-end cinema chains in first-tier cities, prioritizing cooperation with commercial districts and leveraging existing customer traffic for development.

Secondly, we will establish no fewer than 10 standard cinemas in second- and third-tier cities.

It would be best to acquire your own property, but owning property costs money quickly, so you have to find a good balance.

We need to accumulate high-quality assets and seize market share, and we should try to do both at the same time.

Based on this calculation, the total number of screens would be around 200.

As for third- and fourth-tier cities, now is not the time to enter the market.

The film market has not yet penetrated into lower-tier cities, and its box office share is too low, so even if you get involved, you won't make money.

If a theater chain has no box office revenue, it's doomed. Detailed research is necessary before any entry plan can be developed.

Ruixing Cinema Line entered the cinema market in 06, which wasn't early, but its start wasn't bad either.

After all, Wanda was only just starting out at this time and it was not yet time to dominate.

As for those state-owned cinema chains, although they have a strong foundation, their rigid systems and low efficiency undoubtedly gave them the opportunity to overtake others.

Finally, Lü Rui suddenly emphasized, his eyes particularly determined: "There's another key point: the construction of 3D screens must ensure that every cinema has at least two screening rooms capable of showing 3D content."

Hearing this, Zhou Haoran was taken aback and subconsciously asked, "There are almost no 3D movies in China right now. Isn't it a bit too early to start developing 3D screens?"

He had done his research beforehand.

Given the current market size, relying solely on imported 3D movies from Hollywood to cover ticket costs is nothing short of a pipe dream.

"Listen to me, it's right."

Lu Rui didn't explain much, patted Zhou Haoran on the shoulder, and gave the order to carry it out.

No one knows better than him how explosive the 3D movie market will be in the next few years.

By making early arrangements, Ruixing Cinemas' 3D screens will be its biggest advantage when phenomenal films like Avatar are released.

At that time, they will be able to firmly grasp both the power to schedule screenings and the revenue sharing from box office revenue.

Moreover, the upcoming "Pacific Rim" will also need 3D screens to showcase its spectacular visuals.

This move may seem insignificant or even far-fetched now, but it will definitely be a major advantage and trump card for Ruixing Cinemas in the future!

(End of this chapter)