The snowstorm that affected multiple states on the East Coast lasted for three days. Fortunately, the heavy snowfall was mainly on Sunday, and it began to weaken as the new week started. The sudden cold weather inevitably impacted the public's desire to go to the movies, leading major Hollywood studios to lower their expectations for North American box office revenues during this period.
However, many recent news hotspots, whether it be the Victoria's Secret Fashion Show, the positive developments in the new technology industry, or the upcoming IPO of Ygritte Corporation, continued to generate widespread discussion. As a result, media and public interest in last week's midterm elections gradually diminished.
But it wasn't over yet.
On November 16th, the day before the third Victoria's Secret Fashion Show was broadcasted on television, another major news story broke: after over a month of negotiations and reviews, and after agreeing to divest assets that did not comply with federal media regulations, the U.S. Department of Justice officially approved the acquisition of Disney by France's Vivendi Group.
This news caused a huge stir.
Among Hollywood's "Big Seven," Disney's American cultural identity far surpasses that of other studios like Columbia, MGM, and Paramount, which had previously been acquired by foreign capital. Disney's 2D classic animated films are not just childhood memories for many Americans; Disneyland is also an important symbol of American culture.
This time, Simon did not use his resources to suppress the related public opinion.
As a result, from the day the news was announced until the morning of November 17th, newspapers were flooded with criticism and even accusations aimed at the Department of Justice, the Washington elite, and Disney's shareholders and management.
The most intense criticism came from a journalist at The Washington Post, who described the Justice Department's approval of this transaction as nothing short of a betrayal of the country.
Soon, the blame shifted to the recently defeated Democratic Party in the midterm elections.
And to the White House.
Facing the public outcry, the White House promptly responded.
On the morning of November 17th, the President personally explained the situation during a press conference, stating that the Department of Justice's decision was not solely made by Attorney General Janet Reno, but rather by a seven-member committee, four of whom were Republicans.
Therefore, the actual decision-making power in this matter rested with the Republicans.
Despite the President's explanation, the media was not satisfied. The main concern was how to stop this acquisition.
A reporter at the press conference asked whether the President would use an executive order to send the deal back to the Justice Department for review. Clinton responded diplomatically, stating that the White House was still deliberating on the matter, while also hinting that the transaction did not violate any laws. Unless the buyer voluntarily withdrew, it would be difficult to overturn the deal.
Following the White House's statement, a spokesperson for the French Foreign Ministry quickly made a public response, expressing France's optimism about the entertainment industry's future. Vivendi Group's attitude was even somewhat assertive, stating that they had already invested a substantial amount of money in this acquisition, and that since the U.S. Department of Justice had approved it, they would pursue legal action to protect their interests if the deal were to fall through.
Soon after, more details emerged.
To ensure that the deal would proceed smoothly without major disruptions—especially to prevent Vivendi from withdrawing and causing Disney's stock price to fluctuate wildly—Disney had included a hefty breakup fee in the agreement, amounting to 3% of the total transaction value.
Large merger transactions often include such breakup fee clauses.
Depending on the size of the deal and negotiations between the parties, the breakup fee typically ranges from 1% to 5%, though higher percentages or the absence of a breakup fee are also possible, depending on the negotiations. The core purpose of the breakup fee is to prevent one party from suddenly backing out after lengthy negotiations, causing significant losses to the other party.
In this case, the breakup fee was mutual.
The final deal, reached in late September, was valued at $9.7 billion, so the 3% breakup fee amounted to $291 million.
$291 million is a substantial sum for both Vivendi and Disney.
Moreover, from Vivendi's stance, if the deal fell through due to issues on Disney's side, they would likely sue for additional damages. While it's well-known that a French company suing an American company in the U.S. has little chance of winning big, Disney, which had been declining in recent years, could not afford such a setback.
Thus, without any need for Simon's subtle influence, Disney's shareholders began to quietly lobby in Washington.
Interestingly, Disney's two most important shareholders, the Bass family from Texas and the Disney family from California, were aligned with the Republican and Democratic parties, respectively, and both sides began exerting pressure.
Both families had already sensed Disney's downward trend. Even though the Disney family was somewhat reluctant, they understood that accepting Vivendi Group's $9.7 billion cash offer was a wise choice.
Otherwise, they would only watch as the value of the company continued to shrink, with the possibility of bankruptcy not being out of the question.
At the time Vivendi initiated the deal, Disney's market value had already fallen below $7 billion, with a total debt of $5.3 billion. Coupled with the poor performance of its film business and continued losses at Disneyland Paris, it was hard to say when the company might suddenly become insolvent. If creditors began to exert pressure, leading to asset restructuring, the major shareholders' stock could become worthless.
Now, by completing this deal, both sides could secure billions in cash.
In the face of such benefits, cultural sentiments and nostalgia were quickly brushed aside.
The only thing Simon did during this event was to once again have The New York Times, which is close to the Westeros system, raise the issue of lifting the media consolidation ban, arguing that if Washington had not delayed lifting this outdated industry restriction, the Disney acquisition could have had a domestic competitor. This way, America's cultural treasure would not have so easily fallen into French hands.
Everyone knew, however, that even if the media consolidation ban had been lifted earlier, no domestic giant, except for Danijel Entertainment, whose strength far exceeded the industry's average, could have competed with Vivendi Group's high cash offer. This did not stop the bill, quietly suppressed by Congress earlier this year, from re-entering the media and public's attention.
This time, Washington had to provide a satisfactory answer.
Amid the public outcry sparked by the Disney acquisition, on Thursday, November 17th, ABC aired the third annual Victoria's Secret Fashion Show at 9 PM during prime time.
This year's show not only had a production budget of $30 million, but an additional $20 million was spent on promotions.
Before last Saturday's live event, Victoria's Secret and Danijel Entertainment had already begun advertising on major platforms, with a massive billboard in Times Square being up for a month.
At 9 PM, as soon as the show began and the first notes of "The Phoenix" were heard, the viewership immediately surpassed 32 million.
A rock anthem destined to top various music charts elevated this year's Victoria's Secret show into a full sensory entertainment experience. Many viewers, before the first segment had even ended, were eagerly searching online and through other channels for information about "The Phoenix."
Of course, the supermodels who had already become global sensations were still the main attraction of the show.
Ygritte's fashion portal launched a special interactive section after the live show on Saturday and started a giveaway of 10,000 collectible videotapes of the third Victoria's Secret Fashion Show. As the television broadcast began, the online interest surged, and the social media pages of each of the 43 Victoria's Secret Angels saw a dramatic increase in traffic.
After the East and West Coast broadcasts were completed, Ygritte's portal immediately released the viewership data for the third Victoria's Secret Fashion Show.
In its third year, the Victoria's Secret Fashion Show set new records, with peak viewership reaching 45.6 million, surpassing the 42.1 million record of the first show by 3 million. The average viewership was 37.9 million, also breaking the 35.5 million record set by the first show.
The TV version of the show, with six themed segments, was edited to a standard 43-minute length, leaving ABC with 17 minutes for commercials.
Because the show was only an hour long, the total ad time was far less than that of equally rated events like the Oscars. However, ABC still managed to sell those 17 minutes of ad time for a whopping $1.5 million per 30 seconds. In just one hour, ABC earned $51 million from this fashion show, which was itself a super ad blockbuster.
For the first Victoria's Secret show, ABC paid only $5 million for the broadcast rights, as no one anticipated how popular it would become.
This time, of course, it wasn't going to be that cheap.
According to the agreement between the parties, as the rights holders of the Victoria's Secret show, Danijel Entertainment and the Victoria's Secret brand would receive 60% of the ad revenue. Thus, out of the $51 million, $30.6 million would go to the two companies, covering the production cost of the show.
And that's not even counting the subsequent sales of the videotapes, which were expected to be the main profit generator.
During the first Victoria's Secret show, initial expectations were for 15 million videotapes to be sold due to the early sales frenzy, which would have been a record. But over the years, actual sales exceeded 27 million tapes.
With a videotape price of around $30, the total sales exceeded $810 million. From this alone, the two companies holding the rights to the Victoria's Secret show earned $290 million in net profit, equivalent to the
annual net profit from Victoria's Secret's lingerie business.
Breaking records is never easy.
Given that the second Victoria's Secret show saw a slight drop in viewership, and videotape sales fell by more than half, it was estimated that the third show would at least reach ten million in sales, translating to about $300 million in revenue and over $100 million in net profit.
In comparison, the $50 million investment in the Victoria's Secret Fashion Show was well worth it.
After the Victoria's Secret show, Thanksgiving was just around the corner.
The first week of the Thanksgiving season, from November 11th to 17th, officially ended.
As expected, the frigid and snowy weather on the East Coast impacted last week's North American box office.
Overall, though, the box office results remained impressive.
Among last week's three major new releases, Jim Carrey's fantasy comedy *The Mask* perfectly suited the holiday atmosphere. Backed by its quality and Danijel Entertainment's strong promotional efforts, it took the top spot, grossing $37.09 million in its first seven days, with an average of over $15,000 per theater.
Geffen Pictures' *Interview with the Vampire,* distributed by Warner Bros., also performed well, trailing *The Mask* by less than $1 million, with a first-week gross of $36.38 million. However, with 2,604 screens, the largest release among the three new films, its per-theater average was only around $13,000, significantly lower than *The Mask.*
MGM's *The Horror Zone* came in third, grossing $28.11 million in its first seven days.
Although it lagged behind *The Mask* and *Interview with the Vampire,* this opening matched MGM's expectations. Considering the fierce competition with other heavyweight films during the holiday season, a $28.11 million opening might not be enough to guarantee a $100 million domestic box office, with a final gross likely around $70 million.
The film's production cost was $30 million, with an additional $15 million spent on promotions. Even if the domestic box office does not cover the full cost, the film's profitability would be secured through overseas distribution, thanks to the star power of Sam Neill and Jessica Lange, as well as subsequent video and TV revenues.
Following a steep decline in its second week, *The Haunting in Connecticut* faced heavy competition from the three new releases and still dropped another 37%, earning $14.63 million. After three weeks, its cumulative box office reached $83.69 million, with a good chance of joining the $100 million club.
After these four films, other older releases fell far behind, with their box office numbers barely worth mentioning.
On November 18th, the prime Thanksgiving box office week began.
This week's major new releases once again include three films: *Toy Story 2* from Danijel Entertainment, *Junior* starring Arnold Schwarzenegger and produced by Sony Pictures, and *Star Trek: Generations* from Paramount Pictures.
The most anticipated among them is undoubtedly *Toy Story 2* from Pixar, a Danijel Entertainment subsidiary.
After the success of the first film, the budget for this 3D animated sequel was increased to $80 million, more than double the $35 million budget of the original. This time, the promotional budget was also as high as $50 million.
The total project budget was $130 million.
Thanks to negotiations with various theater chains, the revenue share for major Danijel Entertainment releases is generally above the industry average of 55%, with *Toy Story 2* expected to secure around 60% of the box office. However, even with this, the film would need to gross around $210 million domestically just to break even.
It's clear that *Toy Story 2*'s theatrical run will yield little profit.
But everyone knows that the real profits from the *Toy Story* series come not from the box office but from merchandise sales.
Since the release of the first film in late 1991, the *Toy Story* series' merchandise sales have already exceeded $4 billion. With the release of *Toy Story 2,* another wave of merchandise sales is expected to last for years, which is where Danijel Entertainment's main profits will come from.
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