Chapter Five Hundred and Seventy-Ninth Quotation

Chapter 579

Buffett himself is very optimistic about the video tape rental industry. For this reason, he has also studied Blockbuster's information in detail. Since the mid-1980s, the profit generated by the video tape industry has been no less than that of the movie box office. Shida is undoubtedly the 'Walmart' of the video rental industry. Blockbuster's annual profit last year was no less than that of the seven major Hollywood studios. And the video rental giant has the cash flow that Buffett is most interested in. The videotape industry has been booming all these years, but Buffett doesn’t think there is a bubble in this industry. Therefore, Eric’s contempt for Blockbuster made Buffett very puzzled: “Eric, don’t you like videotapes? the future of the industry?"

Video tapes and the upcoming dvd rental industry will continue to flourish for at least ten years. Of course, Eric cannot be optimistic about this industry. At least he is not optimistic about the business model that the Blockbuster chain store will be quickly eliminated in a few years. .

"Mr. Buffett..."

Just as Eric spoke, Buffett interrupted him softly, smiled and said warmly: "Eric, you can call me Warren, I don't want our communication to be like a formal business negotiation, what do you think? "

"Okay, Warren," Eric smiled and nodded his head: "If you've been to any Blockbuster rental chain, you'll find that it's always a hassle to find some videotapes, and Blockbuster's various This kind of fee is also very unreasonable. I believe that if there is a better video rental business model, Blockbuster will be eliminated almost inevitable."

Buffett didn't look like a rich man at all, and continued to ask: "I think you must have considered some better business model that you said?"

"Of course. For example, the Internet. We can build a dedicated video rental website. Customers want a certain movie, just enter the name of the movie on the website, and they can easily find the detailed rental information of the relevant movie, and we can even Establish a dedicated postal system to make it easier for customers to rent videotapes.”

Buffett doesn't pay too much attention to the high-tech industry, which can be seen from his investment portfolio Ni Duan, Berkshire Hathaway's is basically involved in traditional industries, however. Because of the information superhighway plan that the Clinton administration is vigorously promoting, Buffett has also been exposed to a lot of relevant information: "Eric, don't you think there are too few Internet users now?"

Eric has not paid attention to the growth of online users in North America recently, but he can easily find similar examples: "It is not too many, but users who can log on to the Internet often have considerable spending power. And , when the personal computer was just born more than ten years ago, perhaps no one realized that this kind of expensive household appliances that did not seem to be very useful can now sell millions of units every year. In the past ten years, North America and even North America The world has accumulated tens of millions of users who own personal computers.

The economic strength of these people is usually not too bad, in the case of more and more rich Internet content. I believe that most people will choose to get involved in the network. "

In the process of researching Eric's personal information, Buffett also deliberately logged into the Yahoo portal website and established his own online email account. Although many people think that his personal style is very conservative, Buffett is a man who never forgets. People who learn and embrace new things. He thinks that the contact method of online email is indeed much faster than that of letters, but due to the current limitations of various software and hardware conditions, Buffett cannot think of the profit prospects of these network services. Buffett has always been a profit-seeking investor. , and strictly adhere to the principle that investment must be rewarded. If he invested tens of millions of dollars but could not get a return, he could not think of any need to continue doing one thing.

"Eric, before I came here, I saw the Yahoo portal you invested in. What I want to know is, did you build this website for investment or purely public welfare?"

"Of course it's investment," Eric felt that Buffett had obviously taken the topic off the rails. Today, we are going to discuss Firefly's acquisition of the TV network. However, Eric is also very clear that Buffett is a person with a strong desire to ask questions. , He can see from many of Buffett's materials that when Buffett is interested in a company, he often bombards the person in charge of the company with questions. However, Eric didn't mean to be impatient at all. In fact, many business transactions are determined in this kind of chat. As for the kind of talkative business negotiation, it is often a detailed negotiation after the transaction intention is reached.

"So, like Yahoo Portal, when and how are you going to make it profitable?"

"I've never considered Yahoo to be profitable in the last few years, it's still in the market nurturing stage," Eric replied slowly: "Warren, imagine if Yahoo has more than 100 million users, those advertisers will How much are you willing to pay to advertise on Yahoo?"

100 million users!

Buffett narrowed his eyes slightly, and did not take Eric's words as a fantasy. As Eric just said, ten years ago, no one knew that personal computers could now sell millions of units every year. If Internet users really grow at the scale of millions or even tens of millions of users every year in the future, then 100 million users is not out of reach.

Because of the advertising profits of newspaper media, Berkshire owns a number of newspapers, but the largest "Washington Post" currently has an average daily circulation of only a few million copies, but even these millions The sales of copies can bring the Post Company hundreds of millions of dollars in profits every year. Therefore, after the Internet media with 100 million users finds a suitable profit method, the profit generated will definitely exceed that of any traditional paper media.

Although Buffett is not an impulsive person, he has obviously moved at this time, but this move does not allow him to immediately join the Internet wave.

After a quick moment, Buffett took a few sips of the Coke in front of him and put down the glass gently. Looking at Eric: "Eric. It's a very attractive prospect. I'm looking forward to seeing Yahoo in the future you're talking about. So let's talk about the network, I listen. Say you talked to Barry Diller the other day?"

"Yes," Eric said with a regretful expression, "but unfortunately, he did not plan to join Firefly."

Buffett's expression didn't change: "So, if I promise to sell it to you, how are you going to place Tom. You know, we are good friends, and I need to consider the interests of my friends."

"If the acquisition can be successful, Firefly will not make too many adjustments to the personnel, and the performance of the past few years is enough to prove the management ability of Mr. Tom Murphy. Therefore, Firefly will mainly increase its content in the next few years. We all know that the TV network is also like a sales platform, and TV programs are the 'goods' it sells. Any customer at the same price will be more willing to patronize stores with higher quality goods. "

Buffett was clearly satisfied with Eric's answer. He began to ask other questions that he cared about, involving Eric's questions about the possible future acquisitions of the TV network. The two seemed to be chatting about a trivial matter from beginning to end, and never talked about the most important things. The question of purchase price.

After more than an hour, the two finished drinking a large bottle of Coke, and Buffett finally said: "Eric, in general, I am satisfied with your various plans after the acquisition of the TV network, so we are now It's time to talk about the purchase price."

Buffett and Tom Murphy now own a majority of the network, which means that as long as the two nod, the Firefly acquisition will hardly get much help.

However, Eric was not too relaxed at this time, because he had realized something else. If Buffett just planned to sell to Firefly, he would not have talked with himself for so long. Maybe he would only be very direct. Quote a sale price.

Sure enough, Buffett immediately said: "Eric, although I am more optimistic about this transaction, I do not intend to cash out all the shares. Tom and I have already talked about this, and we will only trade in cash at most. I would like to sell 30% of the shares in my hands, and I hope to invest in Firefly Pictures as capital for the other 70%.”

Eric had already anticipated Buffett's attempt. From the bottom of his heart, he did not want to exchange cash and stock exchange, but now it is different from when it bought Disney. When Firefly bought Disney, Disney's performance was in a downturn, and Firefly, which was not too large at the time, completely swallowed Disney in a manner of a snake swallowing an elephant. Most investors are not too optimistic about Firefly's acquisition. In addition, Disney does not have a controlling shareholder like this, and the equity is quite scattered, so Firefly Pictures can realize the attempt of cash acquisition.

But in the past two years, the performance of Firefly Pictures is really dazzling. Although this year's financial report has not been released, there is almost no suspense that the net profit exceeds 1 billion US dollars.

Except for the Time Warner Group, which is larger than Firefly, no other film company in Hollywood can achieve such an annual profit. Therefore, the bright-eyed investment institutions around the world have been focusing on Firefly Pictures. Always looking forward to the news such as the listing of Firefly Pictures. In this case, Firefly wants to expand into the TV network. Whether it is, or the less powerful and cbs, they will definitely not give up this great opportunity to invest in Firefly. .

As for Buffett's proposal to buy 70% of the shares in Firefly, Eric did not rush to bargain, but asked: "So, Warren, I want to know, how many shares of Firefly are you going to exchange for 70% of the shares? Woolen cloth?"

"49%," Buffett replied quickly, obviously thinking about it for a long time: "Eric, we can use the current stock price to calculate, the valuation is about 10 billion US dollars. For Firefly Pictures, I give 15 billion U.S. dollar valuation, and, I know that you will never give up the absolute control of Firefly Pictures, so we do not ask for control, you are still the largest shareholder, and I will not intervene in the management of Firefly in the future. What do you think? Sample?"

How, of course not.

Although the business of Firefly is not as extensive as that of Time Warner, the annual profit of Firefly is definitely comparable to that of Time Warner. Although many people follow the normal development trajectory of Hollywood film companies, they will definitely feel that this profit rate is only temporary, but Ai Rick is very confident that Firefly can definitely maintain a high growth state for a long time. Even if there is no TV network, Firefly's future profits will only increase. After all, a movie or TV series produced by a film company is also a commodity, but Eric has an unparalleled ability to produce and select 'high-quality commodities'.

"Warren, this price is too high, I definitely won't agree to it," Eric said directly without beating around the bush: "Firefly's net profit last year was close to one billion US dollars, and this year may even surpass Time Warner, and we all You know, the market value of Time Warner Group is close to 30 billion US dollars now, but Firefly has only a valuation of 15 billion US dollars, don't you think that is too low?"

"Eric, I admit that Firefly's performance in recent years has been very dazzling, but we all know that the return on investment in the film industry is very unstable. Although everyone recognizes your talent in film, this does not It means that you will not fail in the future, just like Spielberg. In the 1980s, Hollywood was almost dominated by Spielberg, but just entering the 1990s, Spielberg ushered in "Hawk" The failure of The Captain. Moreover, we also know very well that the market value of a company can never be calculated based on the profits in a few years. Time Warner owns all industries such as film, television, publishing and music, which means that its The ability to resist risks is very high, even if there is a major loss in a certain business in a certain year, it will not affect the overall revenue of Time Warner. However, Firefly has a relatively large number of downloads, and businesses such as peripheral income are basically All rely heavily on film performance." (To be continued.)

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