I am Hollywood

[Chapter 1081: Forceful Public Relations]

At that moment, Amy Adams felt a rush of being pleasantly surprised when Eric greeted her. They had only exchanged a few brief words a few days earlier when she had just started her job. Amy was well aware of what the name Eric Williams meant in Hollywood. Even though she sensed Eric's attitude toward her was a bit different during their first encounter, she never imagined Eric would even remember her name.

"It's, um, like I'm dreaming," Amy stammered, nervously hugging the menu that Eric had just handed back to her. She couldn't help but stare at the man in front of her as she said, "Mr. Williams, I've always been a fan of yours."

Kenneth Horne patiently waited for his boss to finish chatting with the waitress before ordering his lunch. Watching Amy leave with a still dazed look, he couldn't help but smile knowingly, complimenting, "She has a unique pair of eyes."

"Indeed," Eric replied with a nod and a smile.

In reality, Amy's eyes weren't conventionally beautiful, but the way they shifted from light blue to deep green under different lighting left a lasting impression. After a few casual exchanges, Kenneth quickly transitioned the conversation back to work.

...

Before they knew it, it was Monday, December 14. Just past the weekend, the Firefly Group's last film release of 1998, The Waterboy, had hit North American theaters.

Although Adam Sandler's previous release, The Wedding Singer, had successfully grossed over $100 million during the Easter window, the company held little expectation for The Waterboy, which bore some resemblance to elements from Forrest Gump, as many found its storyline somewhat silly.

However, the reality was that North American audiences genuinely loved Adam Sandler's goofy, sweet, and romantic style. Over the three-day opening weekend, the film earned an impressive $33.91 million at the North American box office, far exceeding New Line's initial projections.

Based on its opening weekend performance, the film was projected to gross around $50 million in its first week, which was enough to recoup its $23 million production cost. With a $50 million opening, the movie seemed poised to surpass $100 million in the box office during the subsequent hot Christmas weeks, especially since Star Wars: Episode I - The Phantom Menace, no matter how popular, could not monopolize the entire market.

In contrast, Paramount Pictures' simultaneously released 2D animated film, Mulan, took in just $22.75 million over its opening weekend across more than 2,800 theaters -- over $10 million less than The Waterboy, while Mulan's production budget exceeded $70 million, more than triple that of The Waterboy.

Reactions from critics and audiences to the animated film could only be described as average. Meanwhile, the industry was beginning to realize that, after a string of blockbuster 3D animated films, the 2D animated feature seemed to be fading from the mainstream.

...

Eric, however, had little mind to focus on Paramount's animation ventures. Following the finalization of Firefly Group's annual release plans, everyone was astonished to find that what they had initially believed to be a downturn for Firefly Group's film business had turned out to be completely unexpected.

The turnaround was largely attributed to several under-budget surprise hits from New Line Cinema. The most surprising among them was, of course, The Ring, which created a phenomenon in horror cinema and continued showing in North America until the end of November. It had a theatrical run lasting over four months, earning a staggering $286 million, landing it in second place on the 1998 North American box office charts, trailing only Charlie's Angels at $322 million.

Simultaneously, Ted, also distributed by New Line, had, by this past weekend, nearly grossed $200 million, with a cumulative North American box office of $195.43 million, just a breath away from the coveted mark.

With The Ring and Ted surpassing $200 million and The Wedding Singer and The Waterboy crossing the $100 million threshold, New Line's four films collectively brought in $700 million, accounting for 10% of the entire North American box office for 1998.

Thanks to New Line Cinema's outstanding performance, Firefly Group's market share in North American cinema was set to remain above 20%. Even more remarkably, all four films that passed the $100 million mark were produced with minimal budgets -- The Ring cost $30 million, Ted $50 million, and together, The Wedding Singer and The Waterboy came in just over $40 million. The combined production cost for all four films topped out at $120 million, yet they generated close to $700 million at the North American box office.

New Line's consecutive years of success could be attributed to Eric's creative vision, but it was equally linked to Kenneth Horne's exceptional management abilities. After all, Hollywood was never short of studio executives who could ruin a winning hand.

Coincidentally, Kenneth Horne's contract was set to expire the next year. Eric had lamented the recent departure of Steve Bernstein, CEO of ESPN, and he certainly didn't want to lose another key player from his group.

Nevertheless, the solid management structure at Firefly Group meant that Eric couldn't promote Kenneth Horne in the short term.

...

"Kenneth, you're well aware of the situation within the company," Eric said, displaying a calm demeanor. "In the short term, I cannot make any significant adjustments to the management team. So, despite your impressive performance at New Line over the past few years, I can't elevate your position further. I've discussed it with Jeffrey, and if you are willing to remain at New Line, I can offer you a salary package that includes a 5% annual profit share based on the entire New Line division's profits, on top of your base salary. Additionally, you will no longer report to Jeffrey but will instead answer directly to me."

As CEO of Firefly Group, Katzenberg's salary included a base pay plus a 2% annual profit share from the entire group's earnings. Given Firefly's annual profits hovered around $3 billion, Katzenberg's yearly salary was over $60 million.

Of course, New Line's size couldn't compare to that of Firefly Group as a whole. While their recent performance had been stellar, New Line's various revenue figures still accounted for only about 15% of Firefly's total profits. Even in a good year like this one, that number barely exceeded 20%.

However, Eric's offer of a 5% profit share from New Line seemed quite generous. New Line could contribute about $500 million to its parent company annually, meaning a 5% share would amount to $25 million annually, a salary level on par with the heads of the major Hollywood studios. If they continued to see breakthrough hits like this year, that number would, without a doubt, climb significantly higher.

Kenneth Horne had indeed considered leaving Firefly Group.

After all, while the compensation was lucrative, managing just one subsidiary of Firefly Group couldn't compare to running an entire studio independently. He also recognized that his chances of rising to Group President were slim. As Frank Wells neared retirement, many executives sensed Robert Iger was almost Eric's candidate for the next group president, or even Katzenberg's successor in the future.

However, after considering the Hollywood landscape, Kenneth realized he had no other suitable options. While Steve Bernstein had a background in television and could transition to Comcast -- a company tightly knit with the industry -- Kenneth had been entrenched in Hollywood his entire career, with every role connected to film. He understood that leaving Hollywood meant losing the comfort and familiarity he had with it.

Within Hollywood itself, the Firefly network controlled four of the seven major studios. Of the remaining three, Warner Bros. was tangled in internecine struggles; for an outsider like Kenneth, jumping ship there would only hinder his talents. Universal was tightly controlled by Michael Eisner, and he had no desire to follow in Michael Ovitz's footsteps. As for Paramount, the strong control exerted by Sumner Redstone would similarly limit his scope.

Perhaps within Firefly's structure, he could vie for the head position at Columbia Pictures. If he proposed it, he believed Eric would likely heed his ambition; after all, Bill Mechanic wasn't seen as a core part of Firefly's executive team, and Eric might even welcome Kenneth's leadership there.

However, despite being formally recognized as one of the major studios, only a fool would jump into Columbia's mess.

Though a subsidiary of Firefly Group, New Line's collective power had far outstripped that of Columbia Pictures. Naturally, their film libraries and unseen status in Hollywood couldn't be compared, but if the two companies were to be publicly listed, Columbia's market value wouldn't exceed $5 billion, while New Line could easily surpass $10 billion.

In sum, other than staying with New Line, Kenneth couldn't come up with a better option.

Moreover, Eric's offer was genuinely enticing. Though his specific title wasn't raised, he had been adjusted to report directly to Eric, putting him on equal footing with Katzenberg.

"Eric, I look forward to continuing this work," Kenneth finally said after a moment of feigned contemplation. "However, I hope the company can relax a bit on some of the production types at New Line. I believe I have the capabilities to try my hand at bigger projects."

While Eric was generous regarding salary and benefits, he was unwilling to budge on New Line's core operation strategy. "Kenneth, that's something I can't agree to. You must see that New Line's production strategy has been quite successful over these years. Moreover, for successful franchises like Rush Hour and Bad Boys, I won't place limitations on the budgets for their sequels. However, regarding the fundamental operational strategies, I still hope New Line can maintain its current direction."

Noting Kenneth's disappointed expression, Eric remained steadfast but offered a pre-planned concession. "That said, Kenneth, you know Firefly has been expanding significantly in television in recent years. If we only produce for ourselves, without competition, it's tough to create quality content. Therefore, I hope New Line can delve more into television production, providing programming for ABC, FOX, and a few cable networks."

New Line already had a television production department, albeit a small one, with focus primarily on film in recent years.

Kenneth realized Eric's proposition was aimed at establishing New Line as one of the program suppliers within the Firefly family, encouraging competition among the various television brands to produce remarkable shows.

The North American television market was on par with the film sector in size but had long operated in a closed circuit, making concrete data harder to obtain compared to movies.

While Eric wouldn't loosen restrictions on New Line's production types, Kenneth was left without more extravagant desires after securing Eric's endorsement for expanding television efforts.

After discussing various details, Amy Adams returned with their lunches. Kenneth Horne then steered the conversation towards recent developments.

"By the looks of it, this year is shaping up to be a less significant Oscar season. So far, the only noteworthy contenders are The Horse Whisperer and Elizabeth, while other films are merely pacing along. Furthermore, although the reviews for The Horse Whisperer are quite positive, I've privately learned that most academy judges don't hold it in high regard. Elizabeth has a strong chance of picking up major Oscars this year, and I even pondered if we could push The Ring for an Oscar nod, similar to what happened with The Exorcist."

Eric chuckled and shook his head. "If The Ring were an original North American script or adapted from Western literature, it might stand a chance. But it's based on a Japanese horror novel. Do you honestly think those proud old-timers at the academy would value a film deeply embedded in Japanese culture?"

"I don't think it's likely either," Kenneth admitted with a chuckle, clearly having reflected on the issue too.

Eric continued, "Moreover, the success or failure of The Horse Whisperer impacts Miramax's future strategy, so the Weinstein brothers are unlikely to give up easily on getting this film into Oscar contention. Even if the judges aren't fans, they might well leverage their resources and networks over the years to force The Horse Whisperer into the Oscar conversation. So, don't be too optimistic."

*****

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