How can you become a star without money?

Chapter 257 If you utter another word of nonsense, I'll whip you with a bean curd stick.

To quickly expand the bubble and revitalize a stagnant pool, we need to follow the three principles of capital.

All resources should be converted into assets as much as possible.

Securitize all assets as much as possible.

All funds should be leveraged as much as possible.

While everyone was still figuring out the rules of capital in 2010, Wang Yao had already been aggressively casting his hooks from a different perspective.

Skyfire Entertainment's attempt to acquire AMC Theatres, which is twice its size, is seen by everyone as a high-risk and unreasonable move. However, since Wang Yao's current businesses all have unlimited potential, it doesn't seem like he's planning to abscond. Therefore, people can only speculate on a reasonable reason within the seemingly unreasonable situation.

Ultimately, all the arrows point to 'backdoor listing'.

Therefore, when Shanghai Commercial Investment Group led the establishment of a private equity fund with 40% of Tianhuo Media's equity as collateral, everyone who had designs on the Tianhuo Group was once again certain of Wang Yao's true purpose.

Without a doubt, Tianhuo Group is currently the only company in China that occupies four booming industry ecosystems: film and television, e-commerce, internet platforms, and cinemas. No matter which angle you tell the story from, you can lead the entire industry.

Although the Tianhuo Group is not a leader in any industry, its combined potential far exceeds that of any single leader. The investment community directly describes it as a "CBD-type integrated enterprise." If it can find a complete profit model, then all companies related to culture and entertainment, e-commerce, and new media will be unable to avoid the Tianhuo Group in the future.

Moreover, precisely because it is still in the exploratory stage, Tianhuo Media's valuation is at a low point of less than 60 billion yuan, making this undoubtedly the best time to buy at the bottom and ride the wave.

Because once they figure out the model, the valuation could potentially increase several times over.

However, after the establishment of the "SkyNet Private Equity" and the confirmation that it could be converted into SkyNet shares in the future, film and television companies such as Xia Dian, Huayi, and Bona initially subscribed for a symbolic amount of 5 million yuan, which was far less than the expectations they had promised Tan Hui. It seemed that they were preparing to wait and see how other industries would recognize the SkyNet model.

After all, if Skynet only has eyes for the film and television sector, they won't be that interested.

"These old foxes talk a good game, but when it comes to actually doing things, they're as cautious as turtles." Tan Hui spent two days attending dinner parties in the industry.

Everyone was inquiring about 'SkyNet Private Equity,' but in the end, these guys in the film and television industry only subscribed to less than one-tenth of the shares, a huge reduction.

“That’s normal. After all, film and television companies value their cash flow. They’ve invested all their cash in film and television production in the first half of the year, and most of the box office revenue hasn’t been recovered yet. Even though Huayi Brothers’ ‘Tang Zhen’ is predicted to exceed 7 million yuan and lock in at least 2 million yuan in revenue, there’s no way to distribute the profits now.” Wang Yao had expected this.

Because Huayi paid 10 million yuan in CPM for promotional exposure to Kanpianer.com in the first half of the year, Wang Yao used the popularity of "Tang Zhen" to complete the promotion last month. There are also many other big productions to be promoted and released, such as "Detective Dee and the Mystery of the Phantom Flame", "If You Are the One 2", "The Informant", and "Wind Blast".

Because of the unexpected success of "Tang Zhen", Huayi will definitely make another push for box office revenue in the second half of the year to boost its market value. At the very least, it will need to renew its annual marketing and distribution contract with Kanpianer.com for another 5000 million yuan. Moreover, Q3 is about to end, and it also needs to prepare for next year's project investment. The available cash flow is really not very abundant.

The situations of Berna and Xia Shi are not much different. Berna's overall box office revenue in the first half of the year was far below expectations, and its funds in the second half of the year were tied up in variety show projects in cooperation with Wang Yao. It is estimated that the share of this subscription was obtained through financing.

Summer TV is facing even tighter finances. Four of its films, "Let the Bullets Fly," "Reign of Assassins," "Shaolin," and "Jianwei," are big-budget productions with investments exceeding 100 million yuan. Although the annual box office revenue may reach 1 billion yuan (including theater revenue and investment sharing), it still needs to help Xingmei Cinemas expand.

So these film and television industry peers really don't have much cash on hand. However, if they were willing to raise funds or borrow money, they could easily raise over a billion yuan. It's just that the allure of 'SkyNet Private Equity' hasn't yet made them willing to make a big bet.

"We can't count on these poor guys in the film and television industry, but what about the internet tycoons?" Tan Hui laughed.

In addition to targeting the film and television industry, Tianwang Private Equity also targets the e-commerce and internet industries, both of which Wang Yao is in contact with.

“Pig Farm is completely uninterested, and Perfect World is still considering it, but Sohu has subscribed for 5 million,” Wang Yao said with a smile.

"Mr. Zhang is truly generous," Tan Hui remarked.

“He just cashed out a large sum of money. He’ll earn the same interest no matter which private equity fund he puts it in,” Wang Yao chuckled.

"Mr. Ye from Wanda has contacted me, wanting to know more about the situation," Tan Hui said.

Ye Ning is the actual person in charge of Wanda Cinemas. She has been the general manager since 08. With the property advantages of Wanda shopping malls, she promoted the standardization of cinemas and in less than a year, she surpassed Xingmei and Shanghai Film, the two leading cinema chains, and became the leading cinema chain.

This year, taking advantage of the online ticketing boom that has spurred the box office market, Wanda Cinemas aimed to double its expansion and take a commanding lead with 800 screens. Unfortunately, it was thwarted by the Tianhuo Alliance. Facing the combined pressure from Tianhuo and Kanpianer.com, Wanda Cinemas lost a significant number of users in Q2.

Now that the Tianhuo Cinema Group has been fully integrated, with a total of 2000 screens, it occupies almost one-third of the market share, which has seriously affected Wanda's expansion strategy.

Now they want to take advantage of the private equity opportunity to get in touch with Tianwang, it seems they are preparing to adjust their strategy. After all, it would be safer to directly invest rather than spend hundreds of millions to compete maliciously with Tianhuo.

"Wanda?" Wang Yao pondered for a moment. "Are they interested in joining the cinema alliance?"

Wanda Cinemas is not currently considered part of the film and television industry; it is simply a cinema chain. It has not yet decided to enter the film and television industry. The purpose of setting up cinema chains is to attract more people to spend money in shopping malls.

They officially entered the film and television industry next year after participating in the restructuring of New Classics Media with Tan Hui.

“We haven’t discussed it in detail yet, but from what President Ye said, he doesn’t seem opposed to it. Wanda plans to have more than 300 shopping malls in the future, covering first- and second-tier cities. Cooperating with them would be very beneficial for the expansion of the cinema alliance, at least the quality of the locations can be guaranteed,” Tan Hui suggested.

Currently, most of the small and medium-sized cinemas in first- and second-tier cities have been integrated by Tianhuo and Xingmei Group. The alliance formed by Kanpianer.com in third- and fourth-tier cities has quality but no quantity. If it wants to continue to expand in the future, it will either have to invest in new cinemas or renovate old and dilapidated ones.

Both companies have significant property investments, and although they have online ticketing to attract customers, if they can partner with Wanda Shopping Mall to leverage that traffic, they can at least save a lot of money on advertising.

“We can discuss it. The Skyfire Cinemas will also be combined with value-added service businesses in the future, so they do need a property with stable foot traffic. However, I'm afraid the response will have to be quick because there may not be many available for subscription.” Wang Yao smiled.

"Hmm? A big spender?" Tan Hui asked with a raised tone.

Even with Sohu's subscription, it's only a quarter of the total. Since Wang Yao said the share is small, it must mean that individuals/institutions have subscribed for more than half.

"I guess so. A friend of mine is quite optimistic about the development of the international film and television industry and is planning to subscribe for 50% of it," Wang Yao said.

"20 billion? That's a lot of money?" Tan Hui exclaimed in surprise.

"But it's not finalized yet. By the way, the movie we traded for is almost finished editing. Want to come and take a look in a couple of days?" Wang Yao changed the subject.

"Okay, I'll come see you tomorrow. Anyway, there are mostly poor guys just watching from the sidelines, so I won't waste my time." Tan Hui smiled.

The two arranged a time to review the film and then hung up the phone.

“AMC’s debt is much higher than disclosed, nearly $19 billion. Are you sure you really want to acquire it?” Liu Haifeng asked, tapping the evaluation report on the table, after the other man hung up the phone.

Such cross-border acquisitions require a powerful intermediary to be successful.

Otherwise, even if Tianhuo, a company that isn't particularly well-known in China, were to approach them with cash, they might not even pay any attention.

AMC Theatres' shareholder structure is quite simple, with five private equity firms each holding 50% of the shares. They originally intended to leverage their investments to quickly and cheaply integrate AMC for a public listing, but unfortunately, they encountered the financial crisis.

The acquisition used only $3.5 million to leverage $17 billion, but the financial crisis delayed it for three years. In August of this year, it proposed an IPO again, but was rejected because of its high debt ratio. Huge interest payments accounted for nearly 20% of the company's revenue, which seriously restricted the development of the cinema chain.

Facing the pressure from the other two major cinema chains, AMC was in a very disadvantageous position and urgently needed funds to expand. However, one of the shareholders felt that since it could not go public in the short term, it was necessary to continue to increase investment and had the idea of ​​exiting and cashing out, which created an opportunity to take advantage of the situation.

Liu Haifeng, backed by KKR, one of the world's largest private equity firms, was capable of leading the AMC acquisition. Wang Yao commissioned him to conduct due diligence, which revealed greater risks than anticipated. With a $10 billion portfolio, its debt reached a staggering $19 billion; a slight misstep could lead to a financial collapse. Therefore, he advised against the acquisition.

"With such a high debt level, is the acquisition price negotiable?" Wang Yao narrowed his eyes.

“One of the shareholders is eager to sell. I estimate that if the cash transaction is completed quickly, it should be possible to acquire it for 7 to 3 million US dollars. However, you will need to prepare at least 5 to 80 million US dollars as operating funds, which means you will need to prepare at least 12 billion US dollars to barely maintain the operation of the cinemas. That’s nearly 8 billion RMB, which is 25% higher than expected. The risk is very high,” Liu Haifeng said in a deep voice.

"How is Ya Hu doing?" Wang Yao nodded and changed the subject.

"Yahoo's Q2 revenue rebounded by 15% quarter-on-quarter, but this was because it outsourced its core search business to Giant Interactive Group. In other words, Yahoo's core business is currently idle, and its market value is entirely supported by Alibaba and Yahoo Japan's shareholdings. The company has become hollowed out."

Bartz's strategy is tantamount to drinking poison to quench thirst. In the short term, although revenue and profits may recover, the company is hollowed out and unable to keep up with Google's development. It's just a slow death. Liu Haifeng shook his head with a sigh.

For their generation, Ya Hu was like a giant they had witnessed walking into the abyss.

But he was more curious about what Wang Yao wanted to do to Ya Hu.

Acquiring AMC is high-risk, but not outrageous. However, Yahoo is a giant company worth 200 billion US dollars. Even a fallen camel is bigger than a horse. This is not something Wang Yao is qualified to touch.

Could it be that there's some new inside information behind him?
"So, even though it's been hollowed out, YaHu's operations and cash flow are still healthy?" Wang Yao stroked his chin.

"Yes, the debt ratio is also very low, and there are even 200 to 300 million US dollars in working capital on the books. If we need money, we can get at least 10 billion US dollars by pledging to Alibaba or Yahoo Japan," Liu Haifeng said with a smile.

"They're really rich," Wang Yao remarked.

“If it hadn’t missed out on Google and Facebook, it might be ten times richer than it is now,” Liu Haifeng shook his head.

“Let’s first transfer the funds from [Weigu] to 'Tianwang Private Equity', move 20 billion yuan first,” Wang Yao said after a moment of contemplation.

Upon hearing this, Liu Haifeng raised an eyebrow. He was managing Wang Yao's private equity fund, [Weigu], which, including other holdings, had reached a total of 25 billion yuan. From the earliest short selling of Lijiahejiang, to Alibaba and Chengtian, and most recently Leshi, Liu Haifeng had personally witnessed Wang Yao leverage hundreds of millions of yuan in profits.

Moreover, last month, 20 billion yuan of working capital was suddenly transferred in from multiple internal and external channels as reserves, making it the largest private client served by Liu Haifeng.

Wang Yao is now reluctant to transfer such a large sum of working capital out, especially since it's such a high-risk investment.

"Don't you want to reconsider? The return on Tianwang Private Equity is less than 6%, while this money would yield at least 15% if left with [Weigu]. That's a difference of nine figures in a year," Liu Haifeng advised.

Because it feels like such a big undertaking to acquire AMC is really not worth the effort.

“Investment should not only focus on short-term gains, but also on future prospects. If AMC can successfully acquire it, the story of Skyfire Entertainment can be told internationally, and then Brother Liu will have more room to maneuver.”

"Besides, if our money doesn't go in first, other people's money won't follow. It's hard to change people's nature to chase debts and sell at a loss. If there are still many private placement shares, they won't be in a hurry at all, but once the shares become fewer, they'll start scrambling for them." Wang Yao chuckled.

"Mr. Wang's understanding of zero-sum games is becoming more and more thorough," Liu Haifeng said with a smile.

“I learned it all from Brother Liu.” Wang Yao waved his hand. “Let’s contact AMC directly. It would be best to reach an agreement within two months.”

"I'll try my best." Seeing that he had made up his mind, Liu Haifeng didn't say anything more.

"Knock knock knock." Just as the two were devising a social strategy, there was a knock on the office door.

"Come in," Wang Yao said casually.

"Oh, brother-in-law is here too." Fan Bingbing pushed open the door and greeted Liu Haifeng warmly as she entered.

"I was just about to leave, what a perfect timing." Liu Haifeng smiled and glanced at Wang Yao, exchanged a few pleasantries, and then left.

"Why are you here?" After seeing Liu Haifeng off, Wang Yao returned and saw Fan Bingbing sitting casually in the boss's chair.

It's been almost a week since "Queen of Silicon Valley" was announced, and Fan Bingbing's popularity has reached unprecedented heights. After all, no one in the industry wants to see her reach a level of skyrocketing pay.

Amidst the overwhelming barrage of negative articles, Wang Yao had someone draft a PR statement for her titled "Those who don't care about Bingbing are not human," using the negative publicity to clear her name. He then arranged for her to participate in several charity events with the Women's Aid Association to facilitate future publicity.

"What? Don't you miss me at all?" Fan Bingbing put her bare feet on the desk, her toes, painted with black nail polish, provocatively provoking him.

"You think you can solve a funding gap of billions?" Wang Yao went over and slapped her foot away.

"I see you're under a lot of pressure, do you want to distract yourself?" Fan Bingbing grinned and rubbed against Wang Yao's leg.

"If you have nothing to do, go check out 'Dance for a Thousand Years' and the girl group auditions." Wang Yao raised an eyebrow slightly.

"I'm leaving for the film crew tomorrow, and I won't see you for at least a month or two. You're really cold-blooded, aren't you?" Fan Bingbing snorted and hugged Wang Yao's waist.

"Focus on filming. I'm counting on you to become a star and help me capture the market," Wang Yao said with a light laugh, pinching her smooth chin.

"Then give me a shot!" Fan Bingbing said with a coquettish smile.

"You came to me just because you're itchy, right?" Wang Yao raised an eyebrow.

"What? No way? What about the promised company benefits?" Fan Bingbing said matter-of-factly.

"Who gives out perks every day? Besides, you're not an outstanding employee," Wang Yao scoffed.

"So Zhang Meng is an outstanding employee, huh?" Fan Bingbing scoffed.

"If you keep talking nonsense, I'll whip you with this bean curd stick." Wang Yao frowned.

Whether it was an innate aversion to bean curd or the fact that Wang Yao seemed genuinely displeased, Fan Bingbing obediently shut her mouth: "I've put all my unused bags and clothes in the treasurer's office. Should I post something on Weibo to help promote them?"

“It’s not time yet. Before ‘Silicon King’ is released, you don’t need to think about business matters. Just focus on making a good film.” Wang Yao shook his head.

“Okay, Nazha and the others said they’re going to watch the premiere of ‘Sister Flower’ tonight. Are you going?” Fan Bingbing asked with a smile.

"Why are you still hanging out with them?" Wang Yao raised an eyebrow slightly.

"I'm new here, so I definitely need to get to know the team first," Fan Bingbing said with a sly smile.

"I won't go, I have work tonight," Wang Yao said, waving his hand.

Fan Bingbing harassed Wang Yao for a while longer before being kicked out of the office.

[Skyfire Entertainment] New organizational structure, assets, accounts, and valuation.

(End of this chapter)