Chasing Stars in Hollywood

After the morning's work ended, Simon had lunch with several high-level executives of the group, including Amy Pascal and Mark Belford, at a small management dining hall in the studio.

The topic at the lunch table was about the recent turmoil at Disney.

The matter dates back to last year's "Behind the Lies," directed by Robert Redford. Simon had deliberately maneuvered to push this project onto Disney. The film, which cost $40 million to produce, ultimately turned out to be less than impressive. As a result, Disney not only gave up the prime end-of-year slot but nearly relegated the film to the graveyard slots of January and February.

Finally, through Redford's insistence and mediation, "Behind the Lies" was released during Easter, competing against "Teenage Mutant Ninja Turtles 3."

Unfortunately, compared to "Teenage Mutant Ninja Turtles 3" and the subsequently successful "Ace Ventura: Pet Detective," "Behind the Lies" only grossed $6.19 million in its opening week.

Moreover, under the impact of the two blockbuster films released at the same time, "Behind the Lies" was pulled from theaters after just four weeks, with a total North American box office of only $16.35 million. The box office revenue barely covered Disney's marketing expenses, and with the domestic failure, the prospects for overseas and subsequent peripheral sales were not promising. "Behind the Lies" was expected to result in a net loss of no less than $30 million for Disney.

The failure of "Behind the Lies" is a microcosm of Disney's increasingly bleak situation in the past two years and has become the catalyst for internal conflicts within this old film studio's management.

Michael Eisner and Jeffrey Katzenberg, both former subordinates of Barry Diller, took over Disney together in 1984 and initially worked seamlessly together.

By inheriting Barry Diller's high-concept film model and tapping into the commercial potential of Disney's classic animations, Disney thrived in the late 1980s, releasing several box-office hits like "Three Men and a Baby," "Who Framed Roger Rabbit," and "Dick Tracy." The re-release and videotape distribution of Disney's classic animated films repeatedly brought in substantial profits.

Michael Eisner, as Disney's CEO, and Jeffrey Katzenberg, who oversaw several studios including Touchstone Pictures, Hollywood Pictures, and Disney Animation, started drifting apart over time due to differences in corporate management and personal remuneration.

As early as 1988, after a prosperous year, Michael Eisner received a bonus of $6.8 million, while Jeffrey Katzenberg, due to a glitch in his initial salary contract and the major studios' tax evasion tactics of artificially creating losses, received a pitiful 'zero' bonus. This publicly exposed the conflict between the two for the first time.

According to the original agreement, in 1994, which is this year, Disney's second-in-command and current president Frank Wells' contract is due to expire, and Katzenberg was supposed to succeed him as Disney's president. However, Michael Eisner had no intention of letting Katzenberg take over as president and has instead been quietly discussing with Michael Ovitz, president of CAA and also his neighbor and friend, about joining Disney.

The news spread unexpectedly in the small Hollywood circle, prompting Katzenberg to confront Eisner directly.

Coinciding with the box office failure of "Behind the Lies," Michael Eisner did not hesitate to blame Katzenberg for both the film's failure and Disney's poor performance over the past two years, leading to Katzenberg, a senior executive who had worked at Disney for ten years, angrily announcing his resignation.

In the original history, the conflict between Eisner and Katzenberg also erupted this year.

However, the catalyst back then was Frank Wells' death in a helicopter crash. Disney was in a much better state at that time, yet Eisner still did not want Katzenberg to become president, ultimately leading to Katzenberg's departure. Disney's film business declined in the late 1990s, eventually resulting in Michael Eisner's forced resignation.

Now, due to the butterfly effect caused by Simon, Frank Wells did not encounter a helicopter accident. Nevertheless, Wells' contract as Disney's president is still due to expire in August this year, and at 62, he plans to retire early to enjoy life. Disney still needs to select a new company president.

Thus, the recent series of changes occurred.

Disney's management turmoil is largely due to the rise of Daenerys Entertainment.

Daenerys Entertainment now resembles the Disney of Simon's memory twenty years later. At that time, Disney dominated with Marvel Cinematic Universe, Disney animations, live-action fairy tale adaptations, and the Star Wars series, almost monopolizing half of the North American annual box office top ten list each year, suppressing other major Hollywood studios. This led to the transformation from seven major studios to six, then to five, with rapidly rising second-tier companies like Lionsgate and Summit being mere flashes in the pan.

Leveraging his foresight advantage, Simon has already achieved this.

Moreover, compared to Disney at its peak in Simon's memory, Daenerys Entertainment is even more dominant now. This dominance compresses the survival space of other major Hollywood studios and second and third-tier companies, triggering a series of domino effects.

In the early 1990s, Disney was highly prominent with blockbusters like "Beauty and the Beast," "The Lion King," "Pretty Woman," and "Dick Tracy."

Due to Simon's presence, many potential Disney blockbusters have been absorbed by Daenerys Entertainment. Additionally, the commercial performance of other films developed by Disney has not been impressive, leading to Disney's decline over the past two years.

Disney is not the only one experiencing such setbacks in Hollywood.

Among the current seven major Hollywood studios, only two can still be described as thriving: Daenerys Entertainment and Time Warner. Even MGM, which Simon personally supports, is still in recovery mode. As for Disney, Paramount, Columbia, and Fox, the remaining four have found their business increasingly challenging in the fast-reviving Hollywood film market.

Meanwhile, companies like Miramax and New Line, which were supposed to shine brightly in the original timeline, have completely disappeared from Hollywood's vision.

Hollywood's old studios, having existed for over half a century, are tough to completely extinguish.

Simon's short-term goal is to demote Disney to the status of a second-tier studio. Hollywood only needs Daenerys and Time Warner to stand strong for now.

Tolerating Time Warner's presence alongside his own is partly due to the DC Cinematic Universe and partly to avoid antitrust issues. After all, if Hollywood had a single dominant company, all the others would target Daenerys Entertainment.

For now, having Time Warner helps distribute some of the firepower.

However, this is only temporary.

Simon's ultimate goal is the triad he once considered, with Daenerys and Time Warner as two of the pillars. The third could either be MGM, which he personally supports, or Blockbuster Entertainment, where he has quietly planted seeds.

With three pillars, two of them under the Westeros system, Simon's control over Hollywood would reach its peak.

As for the remaining majors, they will truly become second-tier or even disappear completely.

In the small management dining hall at Daenerys Studios.

Nancy Brill suddenly interrupted Simon's thoughts with a question, "Boss, do you think Michael Ovitz will choose to join Disney?"

Simon nodded, "He probably will, but that won't be good news for Disney."

Everyone looked over, and Robert Iger, who had rushed to the West Coast yesterday, said, "Eisner and Ovitz are good friends. I think they would work well together."

Simon shrugged and said, "Friendship is easy to maintain without direct conflicts of interest. The key issue is that both Eisner and Ovitz are used to being in charge. Eisner couldn't tolerate Katzenberg, who isn't even that strong-willed, so how could he allow Ovitz to share power at Disney?"

Amy asked, "Then why would Eisner want Ovitz to join Disney?"

Simon replied, "Simple, he needs a strong enough reason to get Katzenberg out of Disney. If he promotes from within, apart from Katzenberg, no one else will command enough respect. Ovitz created CAA, implemented the package deal system, and has a large number of top Hollywood stars backing him. These are reasons Eisner can use to persuade Disney's board."

Amy pursued, "And then?"

Simon smiled, "Then Eisner will realize that to consolidate his power, he'll have to find a way to remove his former friend from the company."

Nancy looked around at everyone's expressions and suddenly said, "I knew it, our boss is a guy who doesn't trust human nature and always thinks of the worst outcomes."

Simon glanced at his petite female executive, "How about a bet?"

Nancy retorted, "What's the wager?"

Simon laughed, "I recently bought a batch of Mi-24 helicopters. If Ovitz joins Disney and doesn't fall out with Eisner, I'll give you one."

Nancy, undeterred by the lethal weapon that had recently been used to massacre thousands of African soldiers in Rwanda, nodded, "Sure, and if I lose, I'll treat you to a meal."

Simon immediately showed a dissatisfied expression as if to say, "You can come up with such an unbalanced condition?"

Everyone laughed.

Nancy remained unfazed before her boss, "Your wager was your idea, and my terms are my own. Besides, you didn't say our bets had to be equal."

Simon raised his hand, admitting defeat.

In truth, the Disney infighting reminded everyone of Daenerys Entertainment's own situation, but they quickly felt reassured.

As long as Simon, their strong-willed boss, was around, Daenerys Entertainment wouldn't have the soil for internal strife. Simon had always promoted internal collaboration within Da

enerys while subtly transitioning the company to a more decentralized structure.

Each division had its own territory, most reporting directly to Simon. Without strong conflicts of interest, they generally wouldn't clash.

Moreover, even if internal strife did emerge, Simon's strong hand would quickly nip any disputes in the bud. Although Simon seemed to value each person highly, he wasn't afraid to sacrifice anyone, no matter their contributions, if it ensured the company's stability.

Of course, this decentralized structure also posed certain risks.

The most critical being, without Simon's strong leadership, it would be hard to find another leader with enough power and prestige to keep the vast Daenerys Entertainment Group united. The individual divisions might eventually become independent.

However, this potential risk wasn't urgent.

At 26, Simon had plenty of time compared to older businessmen who built their empires near retirement. Thus, he had ample energy to arrange many things in advance.

After a few jokes about Simon and Nancy's bet, Amy brought up another topic, "David Geffen has been trying to form a large studio with his friends in recent years. Jeffrey was one of his targets, and now with Steven, this new studio is practically a done deal."

In the original history, Hollywood mogul David Geffen joined forces with Steven Spielberg and Jeffrey Katzenberg to establish DreamWorks, which made a big splash in Hollywood and produced numerous blockbusters in the late 1990s.

However, lacking a solid foundation and with DreamWorks being a production-only studio without a comprehensive distribution network, most of the profits from their hits were taken by the distributing major studios or by top executives like Spielberg. Ultimately, the investors who had poured money into DreamWorks were left with a constantly losing mess.

Daenerys Entertainment, despite its relatively short existence compared to Hollywood's traditional majors, had progressed steadily from a small workshop to acquiring New World Entertainment to perfect its production and distribution teams, and finally acquiring MCA to become one of the major studios.

David Geffen's new studio, on the other hand, was like building a large castle on a sandy beach without laying a proper foundation. It looked impressive but was fundamentally weak.

Simon had no intention of getting involved. Feeling Amy's interest in her tone, he said, "We should ignore this and focus on our own work."

Amy said, "Simon, I was thinking, maybe MGM could collaborate with this new studio."

Simon shook his head and smiled, "Even if we were willing, do you think Steven would agree to work with us?"

Regarding the "Jurassic Park" series, although it seemed like an amicable split on the surface, everyone in Hollywood knew that Spielberg had been directly fired by Daenerys Entertainment. As a Hollywood golden child cherished since the 1970s, Spielberg agreeing to cooperate with the Westeros system would be surprising.

Moreover, even if he agreed, Simon wouldn't.

Simon's plan for MGM was also to proceed steadily, personally overseeing the production and distribution of films to rebuild its production team and distribution network.

If MGM collaborated with Spielberg's new studio, it would have to reduce its output to accommodate the new studio. This would leave MGM crippled in both "production" and "distribution" if the new studio turned into a mess.

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