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Chapter 317 Fixed Income

Under the bright lights, Ronan sat in the reception room of the long-term credit bank, and his eyes accidentally swept across the short islander.

This is Takuya Matsuhara, the vice president of the long-term credit bank in charge of investment business.

After the two sides had basic understanding and testing, they quickly turned to the topic. Takuro Matsuhara also asked directly, "Mr. Anderson, the Pacific Film Foundation and Shahai Entertainment have signed five film investment agreements. Based on Shahai Entertainment's film production experience in the past few years, I have no doubt that these movies have a high chance of success, but according to my understanding, everyone at Shahai Entertainment and Pacific Film Foundation is you, right?"

This Matsuhara Takuya speaks fluently in English and does not have a particularly heavy island accent. It is not a problem to communicate directly with guests from the United States.

"Yes, the Pacific Film Foundation was originally established by me." Ronan could not make mistakes on this simple problem and said, "The purpose of my establishment of this foundation is to raise funds for Shahai Entertainment's film project. Since the great success of "Spy Shadows", my production company has formulated more shooting plans, including many first-line A-level productions."

He smiled and said, "Of course, this can also provide a win-win investment opportunity for funds outside Hollywood."

Takuma Matsuhara was unmoved and said, "Mr. Anderson, you are both Party A and Party B."

Ronan said calmly, "You have invested in Silver Screen Special Film Fund. You should know that Hollywood is full of traps. The foundation invests in my own film projects. It is more controllable and has less risk. This is also responsible to the investors."

Takuya Matsuhara once again asked, "But this is not good for investors! In fact, long-term credit banks have never lacked investment opportunities. Take the film industry for example, it is more guaranteed to invest in local companies."

This kind of words are obviously paving the way for the future to win the conditions. Luo Nan naturally understood and said with a faint smile, "With your scale, the investment income and protection of the United States are the best."

Takuma Matsuhara didn't say anything, and seemed to disagree with Ronan's words.

Ronan further said, "From the late 1980s and early 1990s, the economic environment of island countries deteriorated rapidly and has not yet recovered. Almost all of your country's large investment institutions are mainly overseas investment. The economic growth of island countries is slow, resources are relatively scarce, and labor costs are becoming increasingly heavy. Your investment in the country is at a higher risk."

He speaks fast and his voice is extremely clear. "For you, the huge American market is full of investment opportunities and profitable in all walks of life. Hollywood is one of them."

"There is great risks in the film industry." Takuya Matsuhara said slowly.

Luo Nan knew very well that the two sides could sit here to talk, and long-term credit banks already had a certain investment interest.

"Yes, the film industry is extremely risky." Ronan never denies this. "Film investment has high risk characteristics, and it is difficult to control the probability of success. We can only place our hopes on minimizing mistakes as much as possible. Even so, the investment returns of film projects are limited. Behind every dark horse-level movie, there are a bunch of skinny white horses and princes."

Takuma Matsuhara also looked serious, "Since that's the case, once a long-term credit bank cooperates with you, how can the investment returns be guaranteed?" He said in a reminder manner, "We have invested in the Silver Screen Special Film Fund, and we have enough experience and lessons in this regard."

After hearing this, Ronan was not surprised. After all, the island country is also a country with an extremely developed film and television entertainment industry.

Besides, before coming to the island country, he was prepared and would never treat the island people with the same trick as dealing with the Arabs and Indians.

To achieve rapid development of the company, the power of foreign funds is essential, but different strategies must be used to treat investors from different countries and regions, and the actual situation of investors must be in line with the investors.

Ronan had already formulated a plan and conducted investigations and demonstrations. At this time, he said, "The Pacific Film Foundation raises installments from long-term credit banks in the form of high-yield bonds. This is the business cooperation between the foundation and long-term credit banks. It exists independent of the film projects of Shahai Entertainment, and the bonds have solidified stable returns."

Takuma Matsuhara also touched his chin "financing that existed independently of the film project."

Ronan further explained "one of the ways to invest in Hollywood movies. Whether the Pacific Foundation invests in Shahai Entertainment's movies success or failure, long-term credit banks will get stable returns."

Takuma Matsuhara immediately realized that if such a cooperation method could be reached, the investment risks of long-term credit banks would be minimized.

"Where is the rate of return?" Takuma Matsuhara asked directly.

Without any hesitation, Ronan replied, "Ten percent. Many American film foundations invest in Hollywood movies, and the yield rate of 10 percent is already considered a high profit level. The Silver Screen special film and television funds that the credit bank cooperated with for a long time raised funds in total for four periods and invested in dozens of movies. The film with the highest profit was only 11 percent."

Takuya Matsuhara participated in cooperation with Yinping Fund back then and knew that what Ronan was talking about was the truth.

Long-term credit banks initially invested in two consecutive periods, but the overall yield was not even 5%.

Takuya Matsuhara thought so in her head, but what she said was completely different, "The investment return rate is too low."

Seeing him say this, Ronan's heart moved, which also means that Takuya Matsubara's attitude is rapidly tilting towards cooperation with the foundation.

Bargaining is actually not a bad thing for business cooperation.

Only if you want to cooperate will you bargain.

If you don’t even have the meaning of cooperation, can you bargain?

Ten percent is indeed not high, but island countries implement low interest rates. The normal annual interest rate for commercial loans generally ranges from 0.9% to 3.5% depending on their own situation, most of them are around 2%.

Compared with other countries, the interest rate for this loan is relatively low.

Ronan made sufficient preparations and said, "Mr. Matsuhara, this yield is very high compared to your country's loan interest rate."

Takuya Matsuhara would not be easily told, saying, "It takes several years for a Hollywood movie to go from project investment to recovery of funds. Take the first fundraising of the Yinping Foundation that year. In 1983, the film covered was not released until the last film was released in the spring of 1986. It took only eight years to recover all the benefits, which made the cost of using funds far exceeding the returns."

Ronan knew very well that what Matsuhara Taku also said was a very realistic point. It took seven or eight years for a movie to recover its profits, which seemed to generate profits, but what about the time cost? There are also currency depreciation, interest losses, etc. that accompanied by time.

"Three years!" Ronan said confidently, "Our cooperation can be carried out in installments. For example, in the first phase, you will invest 100 million or 200 million US dollars. The repayment and income period of this fund is three years. By the third year of signing the contract, Pacific Fund will repay all your investments in one go, which can minimize the time cost."

After years of operation, Ronan has the confidence to do this.

He can help the film avoid some detours, appropriately shorten the operation process, and allow a film to be completed within two years from preparation to release. The remaining year is used to recover funds. As long as the film market response is OK, even if it is not a box office boom, it will be enough to return the investors' funds.

Such a film can make long-term profits.

This has certain risks, but any business operation is not about coexisting with opportunities and risks.

Moreover, in the current situation of Relativity Entertainment, if you want to further develop, you will inevitably introduce capital to support it. Ronan needs to unify the company's voice at this stage and avoid some risks brought by the six major companies in the next few years. It is impossible to rashly raise funds to expand shares or absorb Wall Street's capital, so he has to find ways to attract overseas funds that have little interference with Relativity Entertainment.

Hollywood is everywhere with traces of capital operation. If Hollywood's continuous creative ability is compared to its bloodline on which it relies, then capital is the bone that supports Hollywood product marketing worldwide.

Well-known companies such as Legend Film, Relativity Media, and Sand Dune Entertainment, which are well-known in the film and television industry in their previous lives, actually have the genes of the financial industry. Hollywood's film and television industry has also formed a diversified investment and financing model with multiple investment and financing channels and multiple investment and financing models coexisting.

This also ensures that Hollywood movies have sufficient funding.

For example, the famous "Avatar" and 20th Century Fox itself invested limited funds. The two film and television investment companies, Sand Dune Entertainment in the United States and Meili Media in the United Kingdom, jointly contributed 60% of the production cost and publicity costs to the film.

Takuma Matsuhara also thought seriously that such a yield was more cost-effective than a commercial loan.

Ronan also said, "If you invest in other industries, there are not many people who can get such a high rate of return, and you will also face the risk of investment failure. The economic situation in the United States has not been stable in the past two years, and social conditions are not very good, and accidents in the social and economic fields are frequent..."

Takuya Matsubara immediately thought of the Nasdaq collapse and the 9/11 incident, and his brows couldn't help but frowned slightly.

When investing in traditional industries, the risk is relatively small, but the investment return rate in traditional industries...it's fine.

Takuma Matsuhara would not let go easily, and once again said, "The return on investment of 10% is too low."

"We can continue to talk." Ronan said with a calm expression, "I believe we will definitely reach a consensus on this cooperation."

Takuya Matsuhara said seriously, "I also hope to reach a consensus on this cooperation."

This talks only lay the foundation for future negotiations. Ronan and Takuma Matsuhara also had a preliminary intention to cooperate. The specific negotiations behind can be left to the people below to discuss.
Chapter completed!
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