[Chapter 18: Buying a Distribution Company?]
Hiring Garen wasn't because Charlie was just feeling kind-hearted. The guy's writing skills were pretty solid. As a young man low on cash, hiring someone like him to ghostwrite meant future payments would be even less. Also, it was a way to needle Raymond a bit -- the petty dude annoyed Charlie to no end.
"Drive, Mord!" After getting in the car, Charlie quickly headed back to the office. The startup phase was always hectic. Charlie was very much accustomed to this pace and actually enjoyed it.
...
With his leadership and solid payroll, the small studio had everyone fired up. As soon as he got upstairs, Kevin Feige came over. "Godfather, the third draft of the script is out. Want to take a look? I've already coordinated with the receptionist for the afternoon auditions, notifying those preliminarily selected."
"But Alicia's agent said she can't make it. By the way, Ms. Melche sent out our full project proposal. We've basically locked down some financing contacts. You need to narrow down who to negotiate with and set a schedule."
"Oh, thanks, nice work!" Charlie patted Kevin on the shoulder, praising him. Small touches like that were essential management skills. Then he said, "Regarding the script, talk to the director and writers, keep holding workshops. I'll join in for the final version. I'll review the financing list shortly. What's going on with Alicia? Is she causing trouble or is it her agent?"
Charlie frowned as he said this.
Kevin spread his hands. "She's declined, saying she needs to prepare for the Independence Day premiere. No further explanation."
Charlie's eyes hardened. "Find someone to get to the bottom of her intentions."
The previous agreement signed with Alicia was more like a letter of intent. The actual actor contract had yet to be signed. Seems like this woman wanted out of the plan.
Charlie sneered, 'You are not one of the people who dare to tease me. Alicia, don't be stupid.'
Though young, Kevin had already shown excellent ability at work. He said promptly, "I just found out that one of the actors auditioning this afternoon has the same agent as Alicia. I plan to start there and dig into what that woman's thinking."
"Good job, Kevin," Charlie smiled, encouraging him and then painting a bigger picture.
...
In another office, Melche and Gert were busy over some documents.
"Boss, some capital firms and industry folks contacted us about investing. Please take a look, and determine a rough list," Melche said as Charlie entered.
Gert smiled. "Our project has good market appeal, especially to small film companies and small investors newly entering entertainment. They didn't back off just because of the early book sales data for Fifty Shades of Gray!"
Charlie responded happily, "Yes, our production prep is solid, which gave some in the industry confidence!"
A heated, orderly building project was worth attention. Only narrow-minded people would shy away because of the book data.
Picking up the list, the types were neatly marked. Most were unknown in the industry, some never heard of. Just as Fox predicted, the Big Six wouldn't give a 19-year-old kid the time of day. Plenty of projects and well-developing independent producers were still watching.
Also, some local small banks and even small private funds aimed at average working-class folks could invest. Their investments ranged from several thousand to a few tens of thousands. This made Charlie frown a bit.
Luckily, three were pretty strong: Miramax's Dimension Films, Yorkton Securities' Yorkton Film Fund, and a no-name Mafia Film Company.
Dimension's preliminary terms: distribution with a $1 million investment.
Mafia wanted to sign a distribution letter of intent, investing $500,000. Yorkton was the most generous with the least conditions, investing $2 million.
Melche said, "Jill Messick, Senior VP at Miramax, personally called the company. She said your cell was unreachable. They are the friendliest but demand licensing rights for Good Will Hunting simultaneously."
Charlie thought it over. "I know her; we met during Scream's Gym scene. I can't agree to her terms. But keep Dimension and Yorkton on the hook, I'll negotiate in person later. Handle the smaller funds yourselves. What's Mafia's deal?"
Gert revealed that Mafia started as a theater owner. After a major violent incident, they switched to film distribution with over 20 years of history. But they only had U.S. theater distribution capabilities -- no videocassette, home entertainment, or TV channels. The boss's son, Mitch Pierza, just took over. The company's financial situation was shaky. He wanted to participate in production ventures.
Charlie shook his head. In U.S. movies, non-theater distribution channels were lucrative. A distributor without these meant poor prospects.
Melche added, "Pierza wants to meet you. He said he can provide $200-300k for product placements and is willing to make maximum concessions on profit-sharing."
They exchanged a smile.
Charlie said, "Sounds like Mr. Pierza wants to improve finances and show capability to attract financial institution loans."
"He probably has those channels," Melche assured.
"Let's negotiate. If we can sign a favorable distribution deal, it'll give us an edge with other companies."
Charlie scoffed, "Distribution is the top of the food chain in the industry."
Producers were like factories, distribution salespeople, theaters and other channels buyers. Profit often concentrated with sales platforms. The film industry was no exception. Though this depended on scale.
Suddenly, Charlie asked, "Any chance we can buy that company?"
Even a theater-only distribution company would greatly help! Having a complete industry chain would elevate status and power.
Silence fell. This was a bold suggestion. A shoe-string studio, without even their own camera gear, planning to buy a distribution company? They were shocked by Charlie's ambition.
After a moment, Gert said, "It's probably tough. We lack strong production to support distribution. They won't accept."
Melche agreed, "Even a small distributor like Mafia would cost over $4 million. We don't have the money, and even if we did, owners and staff wouldn't agree to sell."
Charlie knew money's influence varied, but hadn't expected such a high price. "Surely not for a cinema-only distributor?"
Melche listed the assets: "Theater contacts, media relations, film print machines, and so on."
"Alright!" Charlie surrendered. "Forget it for now. Keep negotiating investments."
He felt disappointed. If he had distribution channels, he'd be a Hollywood mogul -- even the smallest croc is still a crocodile.
But money alone couldn't do it. To turn cash into capital and power required steady business growth. Many never even managed to knock on that door. He had a good start; now to take it slow.
First, get Fifty Shades of Gray produced.
Now, a small-time call girl like Alicia dared to defy him? Apparently, many industry insiders still viewed him as a mischievous, lucky kid.
*****
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