A new week began, and Kelly Ross moved into her newly renovated CEO office.
As soon as she entered, Kelly Ross instructed her assistant to bring over all of Warner Bros.' recent film investments and business plans. She intended to review each of them one by one.
The files she focused on the most were those related to Melon Studio.
At the same time, she summoned Warner Bros. executives one after another, asking each of them to share their views on Warner Bros. as well as on Gilbert himself.
Their conclusions were unanimous: Gilbert was extremely important to Warner Bros. Every year, Melon Studio's film projects accounted for thirty percent of Warner Bros.' total revenue.
If they were to decouple from Melon Studio, Warner Bros. would lose a significant portion of its revenue.
And decoupling wouldn't be easy. From film copyright income to merchandise revenue, to the building of film brands, Warner Bros. had already become deeply tied to Gilbert.
Completing a decoupling would not be simple, especially since many people within Warner Bros. and Time Warner were against the idea.
But Kelly Ross believed that precisely because the two sides were so deeply bound, Warner Bros. needed to decouple from Gilbert even more. Otherwise, given time, Warner Bros. would practically be taking Gilbert's surname.
After thoroughly gathering information, Kelly Ross held her first executive meeting since becoming CEO.
At the meeting, she made a shocking announcement: by 2012, Warner Bros. would reduce its holdings in Melon Film Studio to zero and complete the decoupling.
The moment these words left her mouth, the entire Warner Bros. executive team was in an uproar. Many executives voiced their opposition.
But Kelly Ross held firm. "This is a decision made by the parent company. If you have any objections, you may take them to the board of directors."
One executive asked, "Then what about our film contracts with Director Gilbert? Forget about his other hot projects—there are still two more installments planned for Batman…"
"That's exactly why I said 2012," Kelly Ross replied. "There's more than enough time for Gilbert to finish those two films under his contract, isn't there?"
Kelly Ross's forceful decoupling announcement inevitably leaked out. Many Hollywood companies reacted immediately with the same question: What on earth was Warner thinking?
Indeed, Warner's incomprehensible move baffled many executives in the film industry.
Although it seemed like someone was trying to go after Gilbert, Warner's eagerness to cut ties felt far too hasty.
Setting aside disputes of interest, Gilbert himself was one of the most outstanding filmmakers in Hollywood.
Any studio would treat such a creator like a treasure, which meant this was an opportunity for other companies.
Furthermore, Melon Studio possessed enormously valuable IPs like The Lord of the Rings and Harry Potter, as well as other film rights.
In an instant, 20th Century Fox, Paramount, Universal, Sony Columbia, MGM/UA, and others all set their sights on Melon Studio.
But the most excited of all was probably Disney.
"Good news—this is good news for us," Robert Iger said excitedly to his two deputies. "This is a huge opportunity for Disney. Warner Bros. is beginning to fall behind."
One deputy reminded him, "Bob, fully acquiring Melon Studio won't be easy.
"First, there's the issue of equity. Warner Bros. will definitely want to use an equity-swap structure to buy back the Warner shares Gilbert holds.
"That means they won't accept our offer to purchase shares with cash. We can only obtain all of the shares from Gilbert himself.
"And this raises another issue: Gilbert definitely won't accept cash either, so we'll have to use a stock-swap model. This will significantly increase Gilbert's influence within Disney.
"In addition, other companies are watching closely. They'll certainly offer conditions even better than ours."
The other deputy added, "I believe the most direct reason is the antitrust investigation. If Gilbert can only hold shares in one film studio, his best choice would be Disney."
Naturally, Gilbert was aware of this uproar as well. Executives inside Warner Bros. who supported him had already informed him of the details.
Gilbert wasn't surprised. A certain influential man he had donated to had already warned him. Originally, the investigation was supposed to be at a much larger scale; in the end, it only affected the film industry.
This was the follow-up strike. They clearly had no intention of letting the matter go easily.
Since that was the case, Gilbert decided to fulfill their wishes and actively cooperate with Warner's decoupling plan.
In 2012, the fifty percent stake in Melon Studio held by Warner would return to Gilbert. At the same time, Gilbert would gradually step down from Warner's board of directors.
"Others definitely won't let these shares slip by. I'm sure Bob will be very interested in them." Gilbert said to Cameron Diaz.
Cameron Diaz expressed her doubt: "But if Disney continues to acquire shares, wouldn't you become Disney's largest shareholder?
"And then there's Marvel Studios, plus your agreement with Director Lucas to take over Lucasfilm. The value of just this alone is enormous. Does Disney really intend to take it all?"
Gilbert smiled. "Bob might think that way, but whether Disney's board agrees is another matter. If it truly happens, Disney would be completely under my control."
When most people think of Disney, the first images that come to mind are Mickey Mouse and Donald Duck, countless animated characters and classics, and, of course, the Disney theme parks.
In the past decade or so, thanks to cooperation with Gilbert, Disney's live-action film business has also performed exceptionally well.
However, Disney's achievements are not limited to films; it is also an immense media empire. Its total market value this year reached $42.3 billion, second only to Rupert Murdoch's News Corporation.
The reason for such explosive growth—from less than ten billion in the early 1990s to today's $42.3 billion—cannot be separated from Gilbert's contributions.
Furthermore, Disney has been very active: acquiring Pixar, and if it fully merges Melon Studio and takes over Marvel Studios, it could become the number-one film company in Hollywood and the world's top media conglomerate.
This makes Disney quite unique among Hollywood giants. Other companies have parent corporations; Disney is its own parent.
The decoupling between Warner Bros. and Melon Studio is somewhat complicated, especially as it involves many film rights.
Not to mention The Lord of the Rings and Harry Potter series, Pirates of the Caribbean 2: Dead Man's Chest just became this year's box-office champion.
Next year brings Pirates of the Caribbean 3, and later there are numerous sequels and theme park projects in collaboration with Disney. Will all of these need to decouple as well?
Regarding this, Warner's new CEO Kelly Ross stated that decoupling from Melon Studio does not mean separating from the film rights. Warner would still hold stakes in these film rights and continue generating value for the company.
This was destined to be a chaotic decoupling battle. Who would lose more depended entirely on their maneuvers.
However, the process would be long. Kelly Ross planned for 2012, but by then, Warner would still be tangled with Melon Studio in some way.
There were even rumors that 2012 would be the end of the world. Until that day arrived, Warner intended to go down together with Gilbert—touching, indeed.
...
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