After a new administration takes office, they often start with a bang—especially when it's a handover between two different political parties.
When George W. Bush came into power, he finally signed off on a major national policy: tax cuts!
Due to their party's principles, Republicans have always championed the cowboy mentality of "work hard, earn more; work less, get less." They believe the wealthy are the backbone of economic growth in society. Taxing the rich heavily and redistributing wealth to the poor might sound democratic and noble, but in reality, it damages the nation's economy.
Europe's economy has been sliding downhill precisely because of this "equal wealth" communist mindset. Sure, it's made life cushy for the lower classes, but it's seriously held back overall economic progress.
Asia, on the other hand, has risen fast—not just because it's dodged sky-high inheritance and wealth taxes, but because it's shifted the tax burden onto farmers and the working class. Through this kind of tax policy, wealth gets funneled into the hands of a small, savvy group of conglomerates who then drive the nation's economic growth.
Of course, this has sparked huge controversy internationally and earned a pretty bad rap.
But in Asia—especially across the strait with that big powerhouse—the economic rise is unstoppable.
With a tougher Republican government now in charge, they're bound to roll out some bold, confrontational policies.
And they didn't hold back—starting with a massive overhaul of healthcare, social welfare, and a whopping $1.3 trillion in tax cuts planned for this term!
For the wealthy, the federal personal income tax dropped by one percentage point to 38—not a huge leap, but noticeable.
The real game-changer, though, was the slew of tax breaks for companies—especially Hollywood film studios. These companies already enjoyed perks for boosting related industries, and now the Bush administration doubled down.
U.S. companies investing in cultural assets like movies and TV could snag up to a 7% tax reduction!
Under the old tax rules, Hollywood filmmaking counted as an investment industry. With long funding cycles, profits were only taxed at a 15% capital gains rate—way lower than the 35% federal corporate tax most businesses faced, not even counting state taxes.
With these new tax cuts, the movie industry suddenly became a magnet for capital like never before!
A nation's tax policy can make or break an industry.
Hollywood boomed in the first decade of the new century, outpacing the world by miles. Beyond advances in special effects and the rise of co-financing models, the government's tax cuts were a massive boost.
Later, when Hollywood faltered, it wasn't just the subprime crisis—it was also tied to a change in administration and the Republicans losing power.
The moment the tax cut bill was signed, Hollywood felt the shockwaves!
Dunn got the news right away, and Michael Ovitz called for an urgent meeting!
Lower movie tax rates meant a huge jump in profit margins for film investments. That kind of bright future was sure to catch Wall Street's eye in no time.
As the bridge between Wall Street and Hollywood, Legendary Pictures became the hottest spotlight!
"The co-financing industry is about to explode!"
When Dunn arrived, Michael Ovitz grabbed him and got straight to the point, barely hiding his excitement.
Dunn glanced around Ovitz's bare-bones office and sighed inwardly.
Just yesterday, he'd visited Apple. Steve Jobs was pushing a product to rival Sony's—called the "P"—as part of a company pivot. It needed board approval, and Dunn was all in for it.
What caught his attention more was Jobs' office: fresh, natural, elegantly laid out with huge floor-to-ceiling windows. Sunlight streamed in, and sitting there felt like a breath of fresh air.
By comparison, Hollywood offices were too gritty, too basic, too uninspired.
"Whatever happens, once the Dunn Tower's built, my office is going to be jaw-droppingly gorgeous!" Dunn mused, his thoughts drifting.
Ovitz slapped the couch in frustration. "Dunn, are you even listening? With this tax cut, Wall Street's going to go nuts for our co-financing deals!"
Dunn chuckled and made a calming gesture. "The feds are also trying to soften the blow of a bubble crisis with these cuts. Hollywood's not the only winner here—Silicon Valley's tech sector is the real jackpot."
Ovitz frowned. "I know you've got stakes in Silicon Valley, but this is Hollywood, Dunn! Don't forget—you're the founder and majority shareholder of Legendary Pictures!"
Dunn grinned. "Relax, co-financing has limitless potential. It's going to dominate Hollywood's funding channels in the future. For now, we just need to pick the right partners."
Ovitz nodded, lowering his voice. "Dunn, I'll be straight—our company's already gotten 37 partnership offers, with over $800 million on the table!"
"What? That much?"
Dunn dropped his cool demeanor, genuinely shocked.
The tax cuts were signed yesterday, and today Legendary Pictures was drowning in Wall Street offers?
Capitalists sure have a nose for money!
Ovitz continued, "Yeah, but it's almost too much. Anything over $500 million will shift to corporate financing models."
"Not debt loans? That's a good thing!"
"I'm worried, though," Ovitz said, shaking his head. "If we sign off on this financing, it'll dilute our shares big time. I'm afraid—"
Dunn got it. If their shares got watered down, Wall Street could grab more voting power and potentially push Ovitz out!
Dunn mulled it over. "Are we overthinking this? This is Hollywood. Wall Street might have clout, but here, they'd have to play by our rules."
Ovitz shook his head. "Short-term, sure—they'd lean on our connections. But don't forget, we've already got five Wall Street execs in high-level roles here. They're sharp. Give them time to build their own networks in Hollywood, and Wall Street might prop up their own people to take full control of Legendary."
"That's a real problem!"
Dunn thought back to his past life's co-financing market. The turf was Hollywood, but the players and managers were all Wall Street talent.
It was like Hollywood had carved out a colony and leased it to Wall Street!
In this life, thanks to Dunn, the co-financing model kicked off early—and now it was riding the wave of the new government's tax cuts.
With this perfect storm, Legendary Pictures was the epicenter of Wall Street and Hollywood's attention!
It was clear: Legendary, with its rosy future, was about to become a battleground.
If Hollywood won, they'd control co-financing. If Wall Street won—like in Dunn's past life—the model would fall into their hands.
This $500 million financing deal? It was a trap!
"What's their valuation of Legendary?"
"It varies, but for $500 million, they want over 50% of the equity."
Dunn's face darkened. No wonder Ovitz was on edge—Wall Street's capitalists were playing dirty!
Counting the first round of funding, this deal would dilute Dunn and Ovitz's shares to just 30%.
"Hmph, no matter what, Legendary Pictures is a Hollywood company, and it's staying in our hands!" Dunn's tone was steely, unwavering.
Ovitz, a lifelong entertainment guy tied to Hollywood's fate, nodded in agreement. "But that means we'll turn away a lot of investors."
Dunn thought for a moment. "Who's behind this $500 million?"
"Morgan Stanley's investment bank, plus eleven private equity funds," Ovitz said, pausing. "Their letters are oddly similar—like they've coordinated."
Dunn sneered. "They want to play dirty with me? I'd rather take a hit myself than let them win!"
"A hit?" Ovitz blinked.
Dunn waved a hand, his face serious. "Michael, this isn't just about Legendary—it's about Hollywood's future. We're here to make money, sure, but we can't ditch the art. We can't let Wall Street's capital call the shots."
In his past life, once capital took over co-financing, Hollywood studios churned out profit-driven blockbusters—endless sequels and IP-driven films. Riskier, original projects got no funding.
Creative teams fled to TV, sparking a golden age of iconic American dramas.
That wasn't a good trend. If movies were just about profit, what happened to the "seventh art"?
Ovitz took a deep breath, his brow furrowed.
It was a tough call for anyone.
Take the financing, and they risked getting sidelined later. Reject it, and they'd stunt Legendary's growth—plus, this was $500 million, including $300 million in priority debt!
That's real money—who could say no?
Well, Dunn could.
"Let the capitalists fight it out on Wall Street. If they want to mess with Hollywood, they won't even get a chance to nibble!" Dunn's voice was firm, his stance unshakable. "Michael, we're not budging on this!"
"You mean—"
"Get someone to negotiate with those eleven funds! They want to invest in Legendary? Fine—but they sign a share contract with equity only, no voting rights! I'll say it again: Legendary stays in our control!"
Dunn's hand sliced through the air, his voice booming like thunder.