Chapter 35: Determining Equity Shares and Investment Inquiries

At 9:00 AM the next day, Zhang Qianjun dragged his exhausted body out of bed, feeling as if his spine might snap. Was that woman training for squats at the gym? She was simply too ferocious. After having spent nine days running roadshows across four cities, he had returned only to be ravaged by his girlfriend while carrying a debuff. For the first time since his rebirth, Zhang Qianjun doubted himself: Am I really not as strong as I thought?

After a simple breakfast of milk, eggs, bananas, and oatmeal, Zhang Qianjun drove to his company. Today was the day to finalize the investment shares for "So Young." He anticipated another round of bickering upon arrival—there was no help for it, as Enlight Media had entered the fray.

Originally, Mr. La had never thought much of Enlight, but the big boss of Enlight, Mr. Wang, had been particularly persistent this time. He had personally come over, claiming he wanted to attend Liu Yifei’s film celebration banquet, and by following the connection to the "Fairy," he had sniffed his way to the office of Solar System Film & Television.

"Sigh, whatever. Let them do as they please. If worst comes to worst, I’ll just give them the entire investment quota," Zhang Qianjun muttered to himself as he took the elevator from the basement to his office.

This time, a Vice President surnamed Chen from Wanda Cinemas had arrived, Enlight’s big boss Mr. Wang was there in person, and the person sent by China Film Group (CFG) was the one who surprised Zhang Qianjun the most: Director Wang from distribution.

"Director Wang? Are you no longer working in distribution at CFG?"

Director Wang replied with seven parts modesty and three parts pride, "The organization has decided to put more weight on my shoulders and transferred me to the headquarters to be responsible for some domestic film investment work."

"Should I address you as President Wang from now on?"

"No, no, don't just go around calling me that. It’s Minister Wang—the deputy one."

Once everyone had arrived, Zhang Qianjun began. "Minister Wang, CFG is the industry leader, so why don't you propose a framework? How exactly should the investment shares for 'So Young' be calculated? I’ll state this upfront: I cannot have my entire salary converted into investment this time. The returns are just too slow. I’m running a small operation here, and everyone in the company depends on me to make money to put food on the table. If we keep dragging things out like this, my whole company will be left starving."

Minister Wang looked at the other two, and seeing that neither spoke, he had no choice but to speak first. "Qianjun, we are old partners, and I know your personality. Let’s speak plainly. How should the investment shares be calculated, and how would it work if we calculated your salary separately? Of course, don’t even mention the previous 'four-plus-one' arrangement; that’s impossible."

"Fine, then I’ll be blunt. If my salary is converted into investment shares, then the production budget will be calculated at 20 million, and I will contribute 5 million for a 30% stake. If my salary is calculated separately at 50 million after taxes, that must be paid to me once the project is confirmed, and I won't hold any investment stake. For the film production, excluding the actors' salaries, the production cost must not be lower than 15 million."

As soon as these words were out, the two men surnamed Wang hadn't yet reacted, but Wanda’s VP Chen couldn't sit still. "This is too exaggerated, isn't it? Who do you think you are—Jet Li or Jackie Chan?"

Zhang Qianjun glanced at him, thinking, *No wonder I don't have any impression of you. Even the state-owned giants haven't reacted, why are you, a private company, getting so worked up?*

"Jet Li’s salary for 'Flying Swords of Dragon Gate' was 90 million, and Stephen Chow and Jackie Chan start at 100 million. Chow Yun-fat is only at 40 million, but he can't carry the box office alone. Currently, 'Brotherhood of Blades' has a box office of 310 million with twenty days left in theaters. 'Flying Swords of Dragon Gate' definitely won't reach double the box office of 'Brotherhood of Blades,' and the production cost for 'Brotherhood of Blades' was only 30 million. According to publicity, if you strip away Jet Li’s salary, the production cost of 'Flying Swords of Dragon Gate' is still 110 million. VP Chen, math doesn't lie. Wanda Cinemas is also an investor in 'Brotherhood of Blades,' so you should have a good idea of who can actually make money."

The comparison left Wanda’s VP Chen speechless. He looked like he wanted to say something, but ultimately kept his mouth shut.

Beside him, Enlight’s President Wang pondered for a moment.

"Calculated this way, wouldn't the production cost be at least 70 million? Even with a box office of 210 million, the investment wouldn't break even."

Zhang Qianjun thought, *Are you trying to fool a ghost? Saying 210 million wouldn't break even?*

"President Wang, that’s not the way to put it. Although this is a story about a 90s university campus, there are still ways to insert advertisements. I think, at the very worst, product placement shouldn't be less than 20 million."

The big boss Mr. Wang smiled. "Modern dramas are easier for product placement, but 20 million isn't that easy to get. However, Enlight can accept these terms. If the other two parties feel it’s unsuitable, Enlight can handle both production and distribution alone."

Mr. Wang’s sudden reveal of his true intentions didn't shock Wanda’s VP Chen, but CFG’s new Minister Wang could no longer sit still.

"Impossible. CFG must take half of the investment for this project, and we have a long-standing relationship with Solar System Film & Television in distribution. In terms of distribution, CFG is second to none in the country; it is absolutely impossible to hand the distribution of this film to anyone else."

Seeing this, Zhang Qianjun felt confident. He figured he probably wouldn't get the salary payment after all and would ultimately have to settle for an investment stake, because the nature of CFG meant it was impossible for them to accept an investment at a premium. And Zhang Qianjun’s salary, as it stood, absolutely did not conform to general market standards. Therefore, CFG could never agree to the second model.

Once Minister Wang spoke up, even the dazed Wanda VP Chen couldn't stay quiet. Thus, an argument comparable to a market-stall shouting match began. No matter what was said, Minister Wang stuck stubbornly to his 50% share requirement, while simultaneously refusing to let CFG foot the bill for Zhang Qianjun’s 50-million-after-tax salary. In short, it was an attitude of "This is how it is, what are you going to do about it?"

In the end, it was Enlight’s President Wang who offered a solution: CFG would take a 15 million investment for a 45% stake, and the remaining two companies would each contribute 30 million for the remaining 55%.

Distribution would be handled jointly by the three, with the distribution commission set at only one point above the theoretical minimum of 5%, making it 6%. Other interests would be shared. Of the total 750 million cost, the film copyright usage rights plus the salary would be valued at 50 million for Zhang Qianjun’s Solar System Film & Television—though it wouldn't be after-tax; it would be pre-tax.

Overall, all parties took a step back. Zhang Qianjun seemingly suffered the most, but the biggest benefit was that he could get 50 million immediately, without having to wait a year or a year and a half. For Zhang Qianjun, who had ambitions to explore the investment market, this was essential.

With the shares settled, everyone’s mood lightened, and they began to take their leave. Enlight’s President Wang approached Zhang Qianjun.

"Qianjun, I’ve often heard Yifei mention you. Seeing you today, you truly live up to your reputation."

"President Wang, you’re too kind. But Liu Yifei mentioning me... I assume she didn't have many nice things to say?"

The big boss Mr. Wang laughed heartily. "You young people are different; even when mentioning each other, it’s so interesting. I know you like to speak directly. Qianjun, is Solar System Film & Television interested in accepting investment? I know you aren't short on money, but the business world is about strategic alliances and mutual support. Enlight went public on the Growth Enterprise Market in August. If you join us, Enlight will be like a tiger with wings, and it will be a positive for the capital market. In return, you would gain comprehensive support from Enlight in production, distribution, and media resources. Come to Enlight; you can pick any role you want, launch any project you want, including for your girlfriend—as long as you say the word, I’ll arrange it all!"

*Whoa,* the big boss’s tone was truly grand. Wasn't he afraid of letting him launch any project he wanted, or afraid of him ruining the company?

Zhang Qianjun smiled half-heartedly. "President Wang, your sincerity is astonishing. You said you could even arrange resources for my girlfriend—so, for example, could she take a role in 'The Four'?"

The big boss Mr. Wang was slightly taken aback, but immediately recovered. "'The Four' has already finished production. If we were to replace the female lead for a sequel, I personally wouldn't advise it, but as long as you join us, sure! Nothing is off the table."

"Just kidding. Does Enlight have a television drama division?"

"We aren't involved in that for now. Enlight’s core remains focused on film production, distribution, and media business."

Zhang Qianjun pondered for a moment. "President Wang, if you want to invest in Solar System Film & Television, what would the terms be?"

"Share swap!"

A share swap? This proposal from the big boss truly shocked Zhang Qianjun. With his company of only about ten people, a share swap would be worth absolutely nothing! Just as he was about to refuse, he heard the big boss say:

"A 10% stake in Enlight in exchange for a 40% stake in Solar System Film & Television. From then on, we’ll be one family."

Zhang Qianjun was about to call his assistant to check Enlight’s stock price, but then remembered Chen Xiaoyu was on vacation.

The big boss continued, "Enlight’s market value was 8.2 billion when it went public in August, and it closed at 5.8 billion on September 30th. By the end of this year, it is expected to break 10 billion."

Zhang Qianjun did a quick calculation. This was valuing Solar System Film & Television at 1.5 billion? Good heavens, that was more than five times the valuation offered by Huace previously.

Zhang Qianjun sighed. "President Wang, I have to admire your boldness. If our roles were reversed, I wouldn't have the courage to invest at this valuation in a company that was founded only a year ago and has only a dozen people. Besides, isn't Enlight a listed company? Aren't you afraid of being held accountable by shareholders?"

The big boss was full of confidence. "In 2011, Solar System Film & Television completed two films and has another one ready to start. The first two films earned at least 80 million in net profit. Even without counting your personal management contract, that track record is enough to shut everyone up. In my view, over the next three years, with the support of Enlight’s resource platform, an average annual net profit of 100 million is no problem at all. A valuation of 1.5 to 2 billion is, in my opinion, a market standard."

To be honest, at that moment, Zhang Qianjun was truly tempted. But...

"President Wang, thank you for your favor, but I really can't digest this proposal right now. If you give me so much all at once, I’m truly afraid of becoming a slave to profit."

Just thinking about the life of someone like Da Mimi, who did 12 films a year, made Zhang Qianjun shudder.

It wasn't that he couldn't be a capitalist's employee, but he felt he couldn't handle the scale of Enlight.

The big boss’s expression didn't change at Zhang Qianjun’s refusal; he remained all smiles. "There’s no rush. You can consider it slowly. If you think the share percentage is too high, we can talk, but the minimum Enlight must hold is 20% of Solar System Film & Television. There’s a celebration banquet this afternoon, we’ll see each other then."

After seeing the big boss off, Zhang Qianjun calmed himself down. After thinking it over, he still felt it was inappropriate. He could sell his services, but not so casually. If he were tied to Enlight’s chariot right now, even if Enlight later reached a share-swap agreement with Meituan to control Maoyan, they would still just be a big shark in a small market segment. That weight wasn't enough.

*Forget it, forget it.* He didn't want to think about it anymore. He’d better use the money he had to go to the investment market and see if there were any companies worth investing in.