The Best Director

Chapter 32: Fire

Translator: Nyoi-Bo Studio | Editor: Nyoi-Bo Studio

The next morning, Wang Yang received documentation from Jon over the internet. He quickly scanned through it and found about thirty companies, most of which he had never heard of-some didn’t even have official websites.

However, the information was very detailed, including basic details about these film companies, such as which movies they had produced or distributed; it also contained the current situation and analysis of these companies. One produced a terrible movie that bombed at the box office, resulting in a significant loss. Another botched a deal and was estimated to be in debt crisis. There was also one whose chairman was willing to sell the company.

As Wang Yang scrolled through the data with his mouse, he couldn’t help but feel a wave of respect. No wonder Lionsgate would become the most successful independent production company in the future; no wonder Lionsgate always had such a keen sense for success, continually managing to accomplish great feats with little. Looking at these materials, it was clear. Lionsgate was always paying attention to small film companies and low-budget movies, watching and analyzing the successes and failures of these films, constantly gaining a deeper understanding of the market, leading to their own selection strategy for films.

Of course, there was no analysis of Lionsgate itself in the material-it was just descriptive content. Jon Feltheimer certainly wouldn’t give him Lionsgate’s internal documents.

“I don’t want ones with debt…” Wang Yang muttered to the screen as he manually filtered out the companies that were confirmed or suspected to be in debt; it was unclear how much they owed the banks, and he had no intention of picking up such a mess.

What remained were about a dozen financially healthy companies. Some had only production systems and lacked distribution networks, while others had their own distribution systems and channels, capable of independently producing movies and working with cinemas on screenings-but they often couldn’t compete with larger companies, as cinemas were unwilling to show their low-budget films. Instead, they would arrange screenings in older cinemas for trial purposes, and most of the time, these ended with the films failing at the box office.

For a company to establish its own distribution system isn’t difficult, but having one means adding many departments and employees. Including departments responsible for duplication work, handling the duplicating, storing, and transporting of film copies; cinema distribution departments dealing with cinema chains, as well as organizing screenings at various non-theatrical venues like on transportation vehicles (planes, ships, etc.), and places like schools and hospitals; and also administrative, system, and sales operations departments.

Having a distribution system also means a substantial increase in expenses, which can be fatal for small film companies. Therefore, many small companies only handle production, and when it comes time to distribute the films, they seek partnerships with distribution companies—this way, they don’t have to pay for promotion, duplication, transportation, or other distribution costs. If the film makes money, their profit is smaller; but if it loses money, their loss is less too.

However, Wang Yang hoped to acquire a company with distribution capabilities because he was confident “High School Musical” could make money. Why then, in the future, should he have to plead with those distribution companies to help distribute the film? It would be simpler to handle it himself!

After looking for a while, a limited company called “A-Pix Entertainment” caught his attention. This company was established in 1993, debt-free, and had produced several low-budget movies. It also had a distribution business and had distributed over thirty low-budget films to date. Of course, not a single one of these films was influential; some were released in collaboration with video cassette and DVD distribution companies, and a few had been screened in cinemas, but they generally failed after a week’s trial screening, and these films clearly hadn’t brought A-Pix much profit.

The current profit strategy of A-Pix mostly involved purchasing low-budget 11- rated movies like “Passionate Sisters,” “Lustful Mind,” “Erotic Games,” and then distributing them on videotape, making a minimal profit to cover expenses, which is why they were still debt-free.

This year, A-Pix released a self-produced R-rated movie called “Lands of War Flames,” which was their high-hoped release. However, after a trial screening in 17 cinemas during the first week, it only brought in $61,500 at the box office, and after two weeks, it only grossed $147,700, ending in heavy losses. Chris Lynch, the chairman of A-Pix, became disheartened and considered selling the company.

The company was financially healthy, barely maintaining a balanced budget with its existing copyright income; it had production experience and the ability to distribute DVDs and coordinate screenings with cinemas… Wang Yang was somewhat intrigued. He searched his internal film database, and of course, he couldn’t find any of A-Pix’s movies like “Passionate Sisters,” but that film had been released back in 1994, so he could see it if he wanted.

As for A-Pix’s future movies, there weren’t any, so he had no way of getting information related to the company. But it seemed that if he didn’t acquire it, the company wouldn’t last much longer. When a chairman starts to feel hopeless and there are no promising movies in their future, it means the company isn’t far from shutting its doors for good.

Wang Yang tentatively settled on A-Pix Entertainment and planned to call to inquire. However, while he knew how to make movies, he didn’t understand many aspects of acquiring companies, so he felt that he truly needed an agent now. At times like this, an agent could serve as his investment advisor and later could represent him in negotiations with A-Pix.

in fact, many agents had already contacted him, though he didn’t know how they got his number. They all hoped to become his agent. Wang Yang hadn’t made a decision until now. It was time. He pulled out his phone and dialed the number for “Mark Strong” from his contacts.

Mark Strong had worked with Wang Yang as a representative of the actor’s union during the casting for “Paranormal Activity.” When Wang Yang became an overnight superstar director in America, Mark Strong was one of the first to contact him, offering his services. Having reviewed his profile and credentials, Wang Yang knew Mark Strong was a University of Southern California Business School graduate-they were “alumni” after all-and he was also an agent at CAA. How could someone educated at a prestigious institution like the University of Southern California’s Business School end up living on commissions from small actors?

At that time, Wang Yang asked him, and Mark Strong answered that right after graduating, he was hired by a film company as the distribution department manager. He thought he had lucked out, but before he could even settle into his office chair, a few months later, the company went bankrupt due to debt reasons. He hadn’t even distributed a single movie and became a “manager of a bankrupt company”; but that was not the end, as a top student, he still found a second job, the manager of a brokerage company, and yes, it quickly went bankrupt too. Jobless Mark Strong, remembering how the listed brokers at the previous brokerage seemed to make good money, simply got his broker license and started working as a broker.

Once the phone was connected, Wang Yang said with a laugh, “Hey, Mark? Interested in being my temporary broker?”

“Young director, are you serious? Oh, I am definitely interested,” Mark laughed out loud and said, “You hiring me as your broker, that’s a very wise choice!” Before Wang Yang could speak, he went on, “Tell me, do you want to be an idol director, constantly in the spotlight, walking the runway, surrounded by scandals; or a workaholic director with continuous film offers, horror movies, comedies…”

“Stop!” Wang Yang called out annoyed and rolled his eyes, “Mark, if you go on like this, I’m afraid I’ll have to look for someone more capable.” Mark Strong quickly exclaimed, “No! Alright, how would you like me to work?” Wang Yang explained with a smile, “Hey, I don’t need a talent agent, I don’t need to be packaged, you understand? I plan to acquire a film company, I need an investment advisor, I need a professional with financial expertise. They teach this at the University of Southern California’s business school, right? How about it, interested?”

Hearing Wang Yang’s words, Mark Strong instantly perked up, “OK, I am very interested, I am a professional.” Wang Yang said seriously, “If you do a satisfactory job with this acquisition, I will hire you formally.” Mark Strong paused for a moment, then laughed, “So this is my chance? Thank you, I need this kind of opportunity.”

After hiring Mark Strong, Wang Yang’s acquisition team gradually increased by a few people, including the legal expert Hebrew Karl, a professional accountant, and an asset appraiser.

First, Mark Strong contacted A-Pix Entertainment, and its board did indeed have the intention of selling the company. The founder, Chris Lynch, was already in his fifties. He started in retail and made some fortune. Several years ago, he established A-Pix Entertainment with great enthusiasm and began venturing into the film industry, only to face setback after setback. Recently, after a million-dollar investment in “Lands of War Flames” resulted in a box office disaster, he was tired and wanted to retire.

Thus, as long as the price was right, he would sell his 85% stake in the company. A-Pix also had 15% of its shares spread among some minor partners, and if Wang Yang wanted a full acquisition, Chris Lynch could also help persuade those partners.

So, Wang Yang’s acquisition team got hold of A-Pix’s financial statements, which clearly detailed the company’s income, liabilities, debts, assets, etc. Wang Yang’s professional accountant audited the report and found no issues; next, the asset appraiser began a comprehensive valuation of A-Pix.

The things to value included office furniture of the company headquarters, such as desks and chairs, televisions, etc., along with some not-so-new camera equipment. Among these items, there were no cameras as they would rent them when making movies, so the equipment warehouse only contained cheap items like camera dollies; of course, there were also more important intangible assets, rights to movies such as “Passionate Sisters,” and some business relationships, among others.

The appraiser turned the whole A-Pix upside down and eventually assessed that A-Pix’s rough value was around $2.5 million. The company was considered a quality company; although it could only break even every year, with profits of just over a hundred thousand, at least they had no debt. Of course, this year’s “Lands of War Flames” caused the company to lose nearly a million, which far outweighed that profit. If there were no new funds injected this year, the company would either go bankrupt or fall into debt.

After reviewing the appraisal report, Wang Yang’s acquisition team discussed and formally made an initial offer to A-Pix: $1 million for a complete takeover. This initial offer was neither very low nor high; deducting the expected $700,000 loss for the year from A-Pix’s $2.5 million valuation would give a market value of around $1.5 to $1.8 million. However, A-Pix countered with $3 million. This was quite normal, business involves negotiation, and at this point, it was time to start the back-and-forth around the negotiating table.

“Mr. Lynch, do you think we are country bumpkins who just came to town yesterday, and have never been in a movie theater before? Please! Three million?!” Mark Strong said with a frustrated gesture, looking across the conference table at Chris Lynch, “If it’s going to be three million, why wouldn’t we just start a new company? Look at these rights of yours, Mr. Lynch, please tell me, are they really worth three million?”

Chris Lynch, dressed in a black suit, helplessly wiped his forehead and moved his lips but couldn’t speak.

Mark Strong calmed down and said with sincerity, “Mr. Lynch, you know there are too many film companies in Los Angeles; we could even find any company that’s about to go under and stand recruiting outside their door. Mr. Lynch, we brought a sincere offer to buy A-Pix, but let me speak frankly, we’re not purchasing your film rights; what we’re buying are the experiences of this company.” He locked eyes with Chris Lynch and said, “Let’s all be honest, one point five million.”

“I… I’ll think about it,” said Chris Lynch, furrowing his brow tightly, his face a struggle.

Mark Strong covertly gave Wang Yang a knowing look that “it’s pretty much a done deal.” Wang Yang lightly smiled and returned a thumbs-up under the conference table. This guy was really a top graduate of the business school. Despite his normally insufferable chatter, he controlled the tempo perfectly during negotiations, getting tough when it was necessary and pulling back at the right moments, definitely holding the upper hand over Chris Lynch.

The negotiation hadn’t been settled right there and then; it took several more days of tug-of-war before both parties finally agreed on the acquisition price. Chris Lynch and his partners received 1.7 million, while Wang Yang acquired 100% of the shares of A-Pix Entertainment.

On that day, on the twelfth floor of a commercial building in Los Angeles, at the headquarters of A-Pix Entertainment, employees were slouched lazily in their chairs. Each one had a worried look, occasionally glancing over at the firmly closed doors of the meeting room. They discussed in hushed tones, “It’s that director who shot ‘Paranormal Activity’…” “Gosh, an 18-year-old kid? Who knows if he’ll mess things up…” “God help me, I don’t want to lose this job…”

Inside the meeting room, Wang Yang, his acquisition team, Chris Lynch and his partners were all present. Wang Yang looked at the contract spread out on the conference table, then at Chris Lynch and the others opposite him. He was suddenly reminded of the scene a few months ago when he was signing a contract in the meeting room of Lionsgate. At that time, he had secured a distribution opportunity from a film company; and now, he was about to own a movie company.

It was crazy! Wang Yang couldn’t help but marvel inwardly once again. He smiled, picked up the pen, and signed his name on the contract. Hebrew Karl took the contract over to the other side of the conference table and handed the pen over, saying, “Mr. Lynch, it’s your turn.”

The partners at A-Pix Entertainment quickly signed their names. Chris Lynch was the last one. He took a deep breath, holding the pen over the contract without moving, seemingly lost in thought. After a moment, Hebrew Karl had to remind him out loud, “Mr. Lynch?” Chris Lynch let out an “Oh” and with a furrowed brow, quickly signed his name. In an instant, he seemed to have aged over a decade, his expression forlorn as he set down the pen.

Watching Chris Lynch, Wang Yang could feel his emotions. Selling the work of many years and severing all ties with it, how could he not be upset? Wang Yang stood up, walked over to the conference table, extended his hand to Chris Lynch, and sincerely said, “Mr. Lynch, you’ll soon realize that handing over A- Pix Entertainment to me is the right thing to do.” He smiled and added, “Of course, I don’t mean that it will go out of business, but rather, it will get better and better.”

Chris Lynch also smiled, pushing his despondent mood aside and said with a smile, “You will, the future belongs to the young, doesn’t it? I’m old, and it’s time for me to retire.” He shook hands with Wang Yang, looking into his eyes, “Mr. Wang, I hope you can make good on your word and elevate the company; and please, take good care of your employees, they are all good people.”

Wang Yang nodded earnestly, “I will. Mr. Lynch, rest assured.”

“Mr. Wang, there is one more thing I’d like to ask of you,” Chris Lynch tooka deep breath, his tone pleading, “Could you please keep the company’s name and logo?”

“That…” Wang Yang hesitated for a moment. Although Chris Lynch’s almost begging look was hard to refuse, Wang Yang steeled his heart and shook his head, “Mr. Berg, forgive me, but I cannot promise you that. I will be changing the company’s name and logo.”

Changing the company’s name and logo wasn’t for fun, but to remove the previous company image. Although A-Pix wasn’t very famous, there were still some who knew of it—they had released countless R-rated duds and flops, which tarnished the company’s reputation. The upcoming “High School Musical” was a completely wholesome G-rated film, without even a single kissing scene. If it were released under A-Pix’s name, it would undoubtedly be affected.

Therefore, changing the company name and logo was imperative, a way to draw a clear line from the past and signify a new beginning. As for the existing film library of A-Pix, Wang Yang would set up a shell company as a subsidiary to quietly continue reaping royalties from those R-rated films.

Chris Lynch sighed, “I understand.” He then asked, “Can you tell me what the new name will be?” Wang Yang shrugged and smiled, “I haven’t decided yet.” Chris Lynch said, “Alright then, young man, follow me, I’ll take you to meet your employees.” Wang Yang nodded, “OK.”

Wang Yang and his team stepped out of the meeting room, and the large office fell silent instantly. All the administrative staff quietly looked toward the door of the meeting room.

“Hello everyone, you might already recognize me, yes, I am Wang Yang.” Wang Yang walked to the center of the office, looking around at the employees, feeling a bit nervous, he smiled and said, “I am now your new boss. Okay, stop looking at me like that, it makes me a bit scared.” Everyone laughed, and Wang Yang also smiled, announcing, “For the company, I won’t make any changes for now; everything will operate as usual.”

No sooner had he spoken than the employees vigorously applauded, whistling, all of them smiling. What they feared most over the past few days was hearing the new boss announce layoffs. But now, they could temporarily let go of their worries.

“Hey, guys!” Wang Yang shouted, quieting everyone down, smiling as he said, “But I have to say, the company will soon start filming the next movie, with an investment of 5 million; soon everyone will be busy!”

All the staff cheered and applauded excitedly, shouting “Fantastic!” The greatest fear for a production company is the lack of projects, which means downtime and no need for that many staff; but now, with an investment of 5 million dollars, the risk of layoffs was greatly reduced.

Chris Lynch looked at the jubilant office, as if a huge weight had been lifted from his heart. The suffocating feeling in his chest was gone, replaced with comfort. He glanced at Wang Yang not far away, gave a relieved smile, and thought to himself, “Give it your all, young man!”

After a busy day, Wang Yang, the new owner of A-Pix Entertainment, returned to his apartment. He took a hot shower, dressed in clean clothes, and sat down at his desk, marveling at the fact that he now owned a film company. He couldn’t help but smile happily at the unbelievable truth. In fact, friends like Jessica, Rachel, and Zachary didn’t know about this; the acquisition over the past week had been carried out in secret.

But Wang Yang wasn’t in a hurry to share his joy with them because he still had things to do. What should be the new name of the company, and what should the new logo be?

Taking out a sheet of Az, paper, Wang Yang began to scribble randomly with a pencil. Swirls of pencil marks appeared on the empty sheet. He let himself be immersed in memories, recalling how he had made his resolve in the coffee shop, “Jessica, I want to be a director, I want to make films!” and in the bar, Rachel smilingly told him, “It’s also very romantic, like a moth flying into the flame.”

He also remembered that night in the alley, the blonde girl crouched on the ground, tightly hugging her purse, saying blankly, “I just, I just couldn’t let him take my bag…” He couldn’t forget the girl’s bewildered and pitiful face, nor her words, “Director, do you think I should go home?”

” I don’ t want to regret it when I’ m old!” Remembering his own words, Wang Yang’s hand paused. He stared at the A4 paper on the desk and slowly drew a moth in an empty space with the pencil in his hand.

“Congratulations, young man!” Jon, Tom, and Michael clapped for him with beaming smiles, as he secured a distribution deal with Lionsgate. The movie was released and he sat in the cinema, enjoying success, his arms outstretched like a gracefully dancing butterfly: “Yes, I’ve found it!”

His hand trembling slightly, he drew a butterfly next to the moth. He looked at the moth and butterfly on the paper, and it was as if they suddenly came to life, flew out from the paper, wings fluttering, entwined together, heading towards the sky.

In that moment, Wang Yang had many realizations. That night, he had a question: Was the moth flying into the flame stupid or brave? Now he seemed to have the answer.

He was the moth, Anne Darren was the moth; they charged towards the flame with no turning back. Was it foolish? No, the light emitted by the flame was what they sought, where their dreams lay. They flew towards the flame, sometimes they would be burnt to death, leaving not even ashes; but sometimes, they would survive and achieve what they sought.

This wasn’t stupidity, nor was it courage, but a form of perseverance. And it was this perseverance that made the moths reveal their beauty, even if only for a brief moment, letting the world know that they were even more beautiful than those butterflies dancing in the daylight.

With a sweep of his pencil, Wang Yang drew a flame between the moth and the butterfly and wrote beside it a name, “Flame Films.”

Whether it was the moth or the butterfly, they were both beautified by the flame. Without the light of that flame, they would be forever lost in darkness.

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