I'm in Hollywood Chapter 213: Negotiations (part 1)

Chapter 213: Negotiations (part 1)

After Elisabeth closed the door, Murdoch picked up the pot of coffee and refilled his cup before asking Eric if he wanted any through a gesture.
Eric shook his head and replied, "Drinking too much coffee at night is not a good habit."
Murdoch chuckled and said, "You youngsters have it easy. At my age, you have to drink a lot of coffee to have the energy to function."
"Exercise is actually a healthier way of remaining energetic."
Murdoch shrugged and changed the topic as he said, "Eric, your first film was with Fox. Wouldn't you say the cooperation between us has always been very pleasant?"
Eric shrugged and replied, "Of course, even I didn't expect that 17 Again's box office would cross $100 million."
His reply seemed simple but he had indirectly stated that there was no use in attempting to leverage their previous relationship to influence his decision. While it was true that he was able to enter Hollywood thanks to Fox producing 17 Again, he didn't owe them anything.
17 Again not only brought Fox tens of millions of dollars in box office profits, the subsequent profits from the sales of video tapes and TV broadcasting rights resulted in a total profit of more than $100 million for Fox. However, he only got $1 million from the movie.
In fact, Eric felt like Fox had robbed him. Despite the success of 17 Again, he never received a bonus which was standard practice in case of hit projects.
Eric believed that this was likely due to Fox missing the distribution rights to Home Alone. Although Fox had been the one to refuse the distribution rights, after Home Alone was released and became a blockbuster hit, he likely became the target of their anger.
Murdoch had only mentioned the topic to make Eric feel closer to him. However, he ended up feeling embarrassed after Eric indirectly berated his company's past behavior.
"Eric, I heard that other TV stations have contacted you?"
Over the past few days, news of contact between the representatives of the three major TV stations and Eric had been flooding the newspapers. Even the reputed Los Angeles Times and New York Times had published a few articles on the topic with deep analysis. Like most newspapers, they concluded that the odds of Fox being able to retain the broadcasting rights of future seasons of Friends were slim.
"Yes, the terms they offered are very sincere."
Murdoch took a sip of his coffee to hide his irritation. He had realized that the young man in front of him was no fool. If he continued to talk in circles with him, he would be the one in a disadvantageous position.
Putting down his coffee cup, Murdoch decided to cut to the chase and said, "Eric, here's my offer: Fox will give Firefly 70% of the advertising revenue, in exchange for the broadcasting rights of the future four seasons of Friends."
Murdoch was sure that as long as it obtained the broadcasting rights of the first five seasons of Friends, Fox TV would gain a foothold in North America by the time their contract ended. After five seasons, Fox would have the confidence to renegotiate the contract with Firefly to obtain a higher share of the advertising revenue.
Eric raised his head and stared at Murdoch as he asked, "Mr. Murdoch, is this Fox showing its sincerity?"
Murdoch asked,"Does this not reflect Fox's sincerity?"
Eric immediately shook his head in response.
If this were a normal situation, such an offer would indeed be considered to be very sincere.
The TV industry is different from the film industry because TV stations are not heavily restricted by anti-monopoly laws. In fact, most large TV stations have production companies that are owned by a common parent company to circumvent the laws regarding TV stations being restricted from producing their own TV shows. Therefore, TV stations have always been very dominant against independent TV producers such that they usually directly buyout the broadcasting rights from the producers. Only giants such as Warner Bros. could obtain a share of the advertising revenue, but even their share capped at 40%.
However, the situation with Friends was anything but normal. For Fox TV, which was currently in its infancy, the super-high ratings brought by Friends was only secondary. Their primary gain would be being able to use Friends to help Fox TV rapidly increase in popularity and gain market share.
"Mr. Murdoch, before Friends, the average viewership of Fox TV was only a few million, which is less than one-tenth of the number of fixed TV viewers in North America. Thanks to its super-high ratings of over 20 million, even after this season is over, Friends can increase the average number of Fox TV viewers to at least over 10 million. Compared to this, doesn't your offer seem grossly insincere?"
Murdoch firmly gazed at Eric as he said, "Eric, you should know, the share I offered you is more than twice what even the best producers can get."
Despite being under the gaze of the veteran media tycoon, Eric did not show any weakness. Instead, he smiled and said, "Mr. Murdoch, I believe you must have conducted some investigations. You must be aware that the offer made by the three major TV stations is not much lower than yours. I had someone make some calculations which showed that if Friends is broadcast on any one of the three major TV stations, its advertising revenue will increase by more than 10%. And thanks to this 10% increase, their offer will actually be worth more than your offer. If I choose to work with them, instead of Fox, I will definitely obtain more benefits."
After Eric finished speaking, he lowered his head and took a sip of his coffee without looking at Murdoch's expression. He was sure that the so-called 70% of the advertisement revenue was just Murdoch getting a feel of him.
Feeling the delicate white porcelain in his hand, Eric noticed that there was a pale green plant painted on the ceramic coffee cup, almost like an ink painting. Seeing this, Eric suddenly had the urge to turn the cup upside down to see if the words "Made in China" were engraved on the bottom.
However, just as quickly, he ended up smiling at his thoughts. This sudden smile by Eric left Murdoch confused, but his face also relaxed thanks to Eric's smile.
"Eric, let's talk about your terms. What can Fox do to get the broadcasting rights to the following seasons of Friends?"