I Become A Noble in England

At that time, the Sinclair Group's stock price was around US$25, and the 23.38 million shares they pledged were worth around US$585 million.

You should know that the stock price of Sinclair Group has been very stable in recent years. The bank is naturally very willing to use these stocks worth US$585 million as collateral to borrow US$450 million, and it is also relatively safe.

At that time, no one knew that the Sinclair Group would later experience the death of its founder and family infighting, which would cause the stock price to fall sharply.

A simple calculation will show that when the Sinclair Group's stock price is below $19.25, the book value of the 23.38 million shares pledged to the bank will be less than $450 million.

But as far as banks' risk control is concerned, they will certainly not wait until the price of their collateral is lower than the loans they have issued before reacting.

When getting close, they have already started asking the other party to increase collateral or repay the loan.

So when Sinclair Group's stock price approached $20, the bank warned the family.

"What did they use the money for? It can't just disappear like that."

This is also what Barron is curious about. After all, if the money is used for the operation of the company, there is no need to mortgage the shares held by his family.

The funds were raised at that time because their family must have needed them for something.

Facing Barron's doubts, John Smith sighed and said,

"This is also what makes me angry. Now it seems that their investment that time was a complete failure..."

After John Smith's narration, Barron learned that the Sinclair family was actually involved in the acquisition of MGM, one of the eight major Hollywood studios!

MGM is an old Hollywood film company founded in 1924.

In the early days of Hollywood, there were the "Eight Major Studios", namely MGM, United Artists (UA), Warner, Universal, 20th Century Fox, Paramount, Columbia (Sony) and Disney.

It can be said that MGM's most glorious period almost single-handedly created the golden age of Hollywood movies, achieving both commercial and artistic success.

Those popular Hollywood masterpieces, including "Gone with the Wind" (taking inflation into account, this is the highest-grossing movie in history), "The Wizard of Oz", "Waterloo Bridge", "Philadelphia Story", "Ben-Hur", etc., are all produced by MGM...

MGM used to be home to many superstars, including Clark Gable, Vivien Leigh, Ingrid Bergman, Spencer Tracy, Robert Donat and Norma Shearer, all of whom won Oscars for starring in MGM films.

According to incomplete statistics, films produced by MGM have won 170 Oscars.

This company combines production, distribution, and cinemas, and owns countless vast studios, so at one time, MGM was the symbol of Hollywood.

There was once a phrase to describe MGM, called "a miracle in the history of world cinema", and its founder Louis Mayer was called "the King of Hollywood"!

But the good times didn't last long. After World War II, the American antitrust law was introduced, stipulating that from then on, production companies could no longer interfere with distribution and theaters. In addition, with the rise of the television industry and the departure of its founder Mayer, MGM lost its former glory.

In 1970, MGM was bought by American gambling tycoon Kerkorian and began to go off track.

This shrewd businessman from Las Vegas took a fancy to the brand value of MGM and began to get involved in the real estate sector. When he put the MGM and lion logos on big hotels, airplanes and theme parks in Las Vegas, it was destined that MGM would drift away from the movie industry and the roaring lion of the past would become a global touring circus.

It is worth mentioning that in 1981, MGM also acquired United Artists, which was funded and founded by comedy master Charlie Chaplin. However, the combined market share of these two old companies at the time was only 6%. The 007 copyright that originally belonged to United Artists also became MGM's IP at this time.

This time MGM will sell itself. In addition to the fact that the company's development in recent years is no longer as good as before, the last straw that broke the camel's back was Wu Ge's "Windtalkers" - a single film lost 100 million, causing MGM's accumulated debt to reach 2 billion US dollars. MGM, which could no longer hold on, announced a decision that shocked Hollywood in 2003: sell itself!

So last year, Sony took the lead and joined some Wall Street capital to form a consortium to establish "MGM Holdings" to acquire MGM.

This time the acquisition was not made by Sony Business - in 1989, Sony spent $3.4 billion to buy Columbia Pictures, one of the "Big Eight" in Hollywood, and entered Hollywood, and later changed its name to Sony Business - but was carried out directly by Sony headquarters.

"MGM Holdings" includes a five-party consortium, including Sony, Providence Equity Partners, Texas Pacific Capital Fund, DLJ Commodity Bank Partners, and Sinclair Family Trust.

What is different from the original time and space is that this time, it was the Sinclair family that participated in the acquisition of MGM, rather than Comcast in the original time and space - the parent company of Universal Pictures and the largest cable TV company in the United States.

This time, their bid to acquire MGM was $4.8 billion, of which they assumed MGM's $2 billion debt, and then the five companies each contributed $540 million - Sony needed to use MGM's film library and distribute future MGM films, so it contributed an additional $100 million.

The five companies hold an equal stake in MGM Holdings, with each owning 20% ​​of its shares.

The loan that the Sinclair family had previously mortgaged the company's shares was used to participate in this project - their purpose was also simple, which was to obtain a portion of MGM's film library resources so that they could handle it and then broadcast it on its own TV stations.

You should know that at that time, MGM's film library had 4,100 films and 10,600 TV series!

Therefore, Sony is not only responsible for the distribution of "Casino Royale" which will be released this year, but also the production company Sony Columbia has participated in the production of the 007 series of movies for the first time. The famous logo of the Statue of Liberty appeared in the opening of the 007 movie for the first time, side by side with the MGM logo...

There is no mistake in the poem, post, content, and read the book on 6, 9, and bar!

In fact, Sony is the one that made the most money in this acquisition, because in addition to participating in the production of the big IP "007" series, the most important thing is that now is the time for the next generation of video disc formats to decide the outcome, that is, the battle between Blu-ray DVD supported by Sony and HD-DVD supported by Toshiba and Microsoft!

In the end, Sony owned MGM's library of 4,100 films, plus Sony Pictures Entertainment's own 3,500 films, surpassing Time Warner, which owns 6,500 films, to become the world's number one.

Moreover, with these film resources, Sony can use them as ammunition to make great achievements in the video disc war. Therefore, after acquiring MGM, the first thing Sony did was to select 1,400 films from the film libraries of both parties and output them into an exclusive Blu-ray format to gain an advantage in the format war with Toshiba.

So after Sony acquired MGM, Hollywood generally believed that the Sony-led acquisition plan was not intended to make movies.

As expected, after Sony acquired MGM, it planned to close almost all of MGM's studios except for the 007 series and the Pink Panther series, which meant large-scale layoffs.

Therefore, it is no wonder that John Smith has seen from now on that although the family's investment this time cannot be said to be a complete failure - at least they have obtained the broadcasting rights of many films in MGM's film library, it is still difficult to "revive" the company just from the perspective of investing in MGM. The 20% stake is now not worth the initial investment of 540 million US dollars, and it is even difficult to say whether it is worth 450 million US dollars...

Baron knew it even better. He remembered that in the original time and space, when the consortium led by Sony acquired MGM in 2005, the company suffered a loss of up to $2 billion...

But four years after the acquisition, in 2009, MGM's losses almost doubled to $3.7 billion!