The original 'Terminator 2' was produced by Carolco Pictures, a Hollywood studio known for its extravagance.
Arnold Schwarzenegger not only received Hollywood's first fixed salary of $15 million for this project, but the film also became the first Hollywood movie with a production cost exceeding $100 million.
From what he remembered, the film reels of 'Terminator 2' alone exceeded one million feet, and less than 1% of the material was ultimately used, which is enough to prove how wasteful the film was.
Over one million feet of film actually meant huge expenditures for the film crew to shoot these scenes.
Once a film crew starts working, the daily expenses can easily reach tens or hundreds of thousands of dollars; if a scene that could have been shot in three days takes six days, the budget naturally doubles.
From 'The Abyss' to 'Terminator 2' and then the famous 'Titanic', James Cameron's series of films have never been completed on time, which is the fundamental reason why Cameron's films burn through more money than other directors.
Simon and Joe Roth discussed the matter and only confirmed that Fox would continue to maintain contact with Cameron, offering him a producer role in addition to his screenwriting duties.
Cameron personally directing was considered a last resort.
At the same time, this project would not be publicly listed as part of the 10-film plan until all aspects were finalized, to prevent the key creative personnel from holding out for better offers.
After the discussion, Simon returned to the Daenerys Entertainment headquarters in Santa Monica, where Amy Pascal and another middle-aged man in his forties, wearing glasses, were waiting for him.
After receiving Simon's instructions, Amy had been looking for heads for Daenerys International and Daenerys Home Entertainment during this period.
Mark Belford, who was promoted from within the company, has been confirmed as the president of Daenerys International.
Mark Belford is about the same age as Amy.
This young man in his early thirties did not attend university; after graduating from high school at 18, he started working his way up in Hollywood with some family connections.
After joining Daenerys Entertainment last year, Mark Belford accidentally caught Simon's attention, and subsequently performed excellently in the distribution of 'Scream' and several other films, leading to his rapid promotion.
Hollywood media had mixed reactions to Mark Belford's meteoric rise; some praised Simon for being bold in his appointments, while others criticized Simon for being too rash, and there was inevitably some grumbling within Daenerys Entertainment.
However, less than a month into his tenure, Mark Belford quickly took over Daenerys Entertainment's overseas business, and has been a frequent flyer around the world during this time.
In the dispute between Daenerys Entertainment and Arista Records, the suspension of 'The Bodyguard' soundtrack album sales not only did not affect the film's overseas distribution, but the film's box office and popularity in various overseas markets actually increased against the trend, which was not unrelated to Mark Belford's marketing operations in various overseas countries over the past month.
This alone confirmed to Simon that his choice was correct.
With the head of Daenerys International confirmed, the person Simon was meeting today was the head of Daenerys Home Entertainment.
Maurice Korman, in his forties, slightly overweight, wearing rimless glasses, had no relation to Roger Corman, the king of Hollywood B-movies.
He previously worked at Columbia Pictures as Vice President of Marketing.
After Sony completed its acquisition of Columbia Pictures, it has been making frequent moves recently, including purchasing the former MGM studio in Culver City, merging Peter Guber and Jon Peters' Guber-Peters Entertainment Company, buying out all shares of its subsidiary TriStar Pictures, collaborating with Daenerys Entertainment, and selling TV station assets, among others.
At the same time, Columbia Pictures' original management team was also being replaced by Sony.
Maurice Korman resigned under these circumstances and officially chose to join Daenerys Entertainment after several weeks of negotiations.
His position is President of Daenerys Home Entertainment, mainly responsible for the distribution of videotapes and television broadcasts of films produced by Daenerys Entertainment's two major labels, Daenerys Pictures and New World Pictures.
The confirmation of the heads of Daenerys International and Daenerys Home Entertainment also meant that Robert Rehme's power was divided into three.
Robert Rehme will continue to be responsible for the domestic distribution of films produced by Daenerys Pictures and New World Pictures for the next two years.
The accumulated rift between them was already very deep, and Simon did not discuss this matter much with Robert Rehme.
The reason he was not fired was out of consideration for his contributions to Daenerys Entertainment over the past year; Simon is not someone who likes to discard a tool after it has served its purpose.
However, this was on the condition that Robert Rehme must conscientiously complete his work for the next two years.
If he became resentful due to the division of power or even deliberately sabotaged Daenerys Entertainment's film projects, Simon would certainly not hesitate to dismiss him.
In fact, after confirming the division of Rehme's power into three, Simon instructed Amy to focus her efforts on the company's distribution department.
After concluding the meeting with Maurice Korman, Simon and Amy discussed the matter of Ira Deutchman.
Ira Deutchman's one-year probation period was about to end, and although Highgate Film reported directly to Simon personally, Amy was the one who discussed the terms of his official employment and salary package with Deutchman.
After several communications, it was generally confirmed that Ira Deutchman's official contract period would be 5 years, with a base annual salary of $300,000.
At the same time, Deutchman would also receive 5% of Highgate Film annual net profit as a bonus.
Based on Deutchman's performance over the past year, the joining bonus Simon promised him last year was confirmed to be $2 million.
Ira Deutchman's 5% share of Highgate Film net profit seems to be the same as Amy's, but the difference between the two is actually equivalent to the difference between a film's box office net profit share and an all-channel net profit share.
Moreover, Deutchman's terms did not involve equity incentives.
Another busy day passed by unknowingly.
At six o'clock in the afternoon, Simon was about to leave work when Nancy Brill came into his office.
Placing a game cartridge on Simon's desk, Nancy sat down opposite him and said, "The game team has made some more detailed adjustments, Simon. Please try playing it again and see if there are any areas that still need improvement".
Blizzard Studio was officially established in February at the beginning of the year, and it has been 8 months now.
In this era, the normal development time for a game was 3 to 5 months.
Making a game like 'E.T. the Extra-Terrestrial' in just 6 weeks was completely reckless.
However, Blizzard Studio taking just 8 months to churn out a game made Simon feel like they had chosen the wrong name.
The real Blizzard is famous for its delays!
Moreover, the 'Teenage Mutant Ninja Turtles' game development plan, which was originally divided into two, included an action role-playing type and a fighting game type.
What Nancy brought out at this time was still an action role-playing game similar to the Konami version in Simon's memory.
The other fighting game took three months just for the initial design and is still under development.
Delays, of course, also meant budget overruns.
The original production budget for both games was $500,000.
Now, the production budget for this action role-playing game alone is close to $1 million, and the other fighting game, if released early next year, will have a budget of at least $1.2 million, both more than double the original.
Because the action role-playing version was confirmed for official release in early November, Nancy Brill has also been working on promotion recently, and plans to launch it simultaneously in the Japanese and North American markets.
According to Nintendo's royalty system, Daenerys Entertainment will also need to bear the production costs of future game cartridges itself.
In total, Daenerys Entertainment's total investment in this one game has already exceeded $2 million, and this does not include other expenses of Blizzard Studio.
If it weren't for the fact that the quality of both games was confirmed to be excellent during several playtests, Simon would have definitely halted the project.
Having been used as a 'guinea pig' for playtesting more than once in recent months, and seeing Nancy bring another cartridge that clearly wouldn't have significant changes, Simon quickly shook his head and said, "It's only three weeks until release. Can it still be modified now?"
"The first batch of 100,000 cartridges definitely can't be changed, but subsequent ones can still be improved".
Simon gestured casually and said, "Actually, you should find the target consumers of this game to playtest, not me".
"Of course, potential consumers in the 8 to 22 age group are all within my testing range. You're 21".
Simon interrupted, "How old are you?"
"How rude", Nancy glared at Simon, then got up and pushed the game cartridge towards him. "Anyway, try it again. I'm off work now".
Simon watched Nancy leave, then put the game cartridge in his briefcase and also left the office.
Over the next few days, Simon continued to work tirelessly on various projects, and the undercurrents in the US junk bond market grew increasingly turbulent.
October 13th, Friday.
At 1 PM, United Airlines held a press conference, announcing that due to cash flow shortages, the company was unable to timely repay a corporate bond worth $1.5 billion. Management was urgently negotiating all possible financing options and would maximize efforts to ensure investors' interests.
The financial market, of course, did not believe United Airlines' platitudes about ensuring investor interests, and so rushed to sell United Airlines' stocks and bonds, triggering a series of chain reactions.
The long-accumulated crisis in the US junk bond market officially erupted.
Upon closer inspection, compared to the sudden Black Monday of 1987, this Black Friday 'mini-crash' had too many prior indications.
Starting from the first half of this year, Drexel Burnham Lambert, the firm where the 'Junk Bond King' Michael Milken once worked, began to face a crisis.
This Wall Street financial giant, which had cumulatively issued over $80 billion in junk bonds over the past decade, was severely weakened by various insider trading scandals linked to Milken.
Many corporate groups that had maintained close cooperation with Drexel Burnham Lambert were also unable to secure funding to support operations through repeated junk bond financing, which was akin to drinking poison to quench thirst.
At the same time, after the 1987 stock market crash, market enthusiasm for junk bond investments significantly cooled, and federal government regulation of junk bond financing became increasingly strict over the past two years.
All these factors were pushing the junk bond market towards its ultimate collapse.
After United Airlines' announcement, during the last two hours of trading on Friday, stock prices of numerous companies in the North American stock market plummeted.
The Dow Jones Industrial Average plunged 217 points in just two hours, marking the second largest single-day drop since the 508-point crash on October 19, 1987.
The S&P 500 Index also crashed 32 points in the subsequent two hours, following the broader market's collapse, representing an 11% drop from its opening price of 286 points that day.
This directly triggered the Chicago Mercantile Exchange's 10% circuit breaker for S&P 500 Index futures.
By the close of trading that day, United Airlines' stock price, at the centre of the storm, plummeted 21% within two hours, and its bond prices fell even more, by 27%.
Additionally, the stock and bond prices of many other companies, banks, and institutions that had issued or held large quantities of junk bonds also crashed.
Drexel Burnham Lambert was hit first, with its stock price, which had been continuously falling for the past six months, plunging 19% in just two hours.
Columbia Savings and Loan, which had long maintained a close cooperative relationship with Drexel Burnham Lambert, also saw its stock price fall sharply by 16%.
The plummeting stock prices of a long list of famous American companies, including Gillette Holdings, American Newspaper Group, Integrated Resources, Union Oil and Gas, and Reynolds-Nabisco, which had just set a record for leveraged buyouts earlier this year, sent shivers down the spines of countless investors.
Everyone felt that another stock market crash had arrived.
Fortunately, this time it was a Friday.
Everyone had two days to discuss countermeasures.
However, compared to two years ago, the federal government's bailout measures this time were clearly not as forceful.
The hope that had just ignited in the hearts of United Airlines' top executives, who had expected to receive emergency funds in such a crisis, was extinguished by the US Treasury Secretary's statement that the federal government would not bail out highly indebted companies.
At the same time, over the weekend, even more negative news about the junk bond market broke out.
The front page of Saturday's Wall Street Journal featured a comprehensive statistical report on the junk bond market.
The article pointed out that the cumulative return on junk bond investments over the past decade had grown by only 145%, while the return on the North American stock market during the same period had grown by as much as 207%.
Even US Treasury bonds had seen a cumulative return growth of 177% over the past decade.
Furthermore, in the preceding decade, among 100 randomly selected North American companies that had issued junk bonds, 24 companies went bankrupt or, like United Airlines, were unable to fulfil their repayment obligations.
This proportion was five times higher than that of other companies.
The article concluded that Michael Milken's high-risk, high-return junk bond theory, which he had promoted for the past decade, was fundamentally flawed.
Therefore, junk bonds actually had no investment value, and many companies were merely maintaining a superficial prosperity through a Ponzi-like method of repeated financing.
United Airlines' debt default was just the beginning of the junk bond market's collapse after a decade of prosperity.
In the coming months, more companies and institutions would be dragged down by a large number of worthless junk bonds.
In addition to the Wall Street Journal's overall bearish outlook on the market, many negative news reports targeting companies that issued or held large quantities of junk bonds also came to light.
The New York Times revealed that Drexel Burnham Lambert's cash flow had decreased from $1.5 billion at the beginning of the year to less than $300 million.
This Wall Street financial giant, which itself held a large number of junk bonds and required a high proportion of capital for turnover, could collapse at any time.
Columbia Savings and Loan was also exposed by the New York Post for holding $1 billion worth of United Airlines bonds, making it United Airlines' largest creditor.
As the United Airlines crisis continued, this bond asset was conservatively estimated to shrink by more than 50%, and in the worst-case scenario, could even be completely wiped out.
The Washington Post also pointed its finger at Reynolds-Nabisco.
After the record-breaking $25 billion merger at the beginning of the year, Reynolds-Nabisco's stock price not only failed to experience the significant increase initially expected, but instead fell by 33% compared to the merger price over the past year.
The company's market share in the tobacco market also sharply contracted, shrinking by 8% in less than a year.
Moreover, the merger of Reynolds and Nabisco, both of which were originally profitable, was projected to result in a loss of over $1 billion this year alone.
To save costs, the company had also cumulatively laid off 2,300 employees in recent months, and some high-quality assets had to be sold off at low prices due to debt pressure.
In short, the Reynolds-Nabisco merger was a complete disaster, with only the financial companies that brokered the deal earning huge profits.
Commissions paid to Wall Street firms such as KKR, Drexel Burnham Lambert, and Merrill Lynch for the entire transaction exceeded $1.5 billion.
Although there were some voices supporting the junk bond market, under the intense media bombardment, all these negative reports severely undermined the already wavering confidence of countless investors.
After the weekend, the media remained clamorous, and the North American stock market declined again after opening on October 16th.
The financial market likely sensed the 'direction of the crisis' this time. Therefore, while the stock and bond prices of companies like United Airlines continued to fall, the overall situation of the US stock market stabilized.
Thus, companies like United Airlines, Drexel Burnham Lambert, and Columbia Savings and Loan were like old, weak, and sick sheep abandoned outside the flock.
Cersei Capital, along with other capital forces that followed behind the scenes, after several months of strategizing, began to aggressively harvest the fruits of their hunt.
Simon was well aware that this mini-crash would not last too long, so he instructed Jeannette to liquidate Cersei Capital's stock index futures contracts immediately.
In the following week, the closing of just over 32,000 S&P 500 index futures contracts brought Cersei Capital over $500 million in profit, while the proceeds from the settlement of numerous other stock and bond short positions amounted to as much as $1.1 billion.
Moreover, the scale of these short positions was less than half of Cersei Capital's total holdings.
In the coming months, as the domino effect in the North American junk bond market continued, Cersei Capital would continue to reap even more substantial profits.