Boeing 767 stewardess Claire Gaines knocked on the door to remind them that they had arrived in Japanese airspace, and as usual, brought in a box of watches with the time zone adjusted.
Simon casually picked one and put it on, checking the time.
Japan was 18 hours ahead of the US East Coast, so it was already past 10 AM on Monday, November 5th.
The purpose of this trip to Japan was to meet with Panasonic President Akio Tanii, and it wasn't a sudden whim.
Ever since the Hearst family intervened and snatched the 20% stake in ESPN from Simon, he had the idea of finding a way to make Panasonic voluntarily withdraw from the deal.
The Hearst family had recently acquired ESPN's shares from Reynolds Nabisco, spending only $180 million, and it was unknown whether they had once again leveraged their 'influence,' as it was a full $20 million lower than Simon's initial offer.
However, even though he had many bargaining chips, Simon had no intention of forcing Panasonic to withdraw.
In this era, Panasonic's market capitalization was comparable to industry giants like DuPont and General Electric in the United States. As a local player, Daenerys Entertainment could leverage some of its advantages to force Panasonic to withdraw from the acquisition, and it wasn't impossible to succeed. However, doing so would be very unwise.
Compared to the Hearst family's strong-arming tactics, Simon preferred to cooperate.
The development of the Westeros system would only touch upon the interests of more and more people in the future. In such circumstances, to continue expanding, it was necessary to attract as many allies as possible, rather than continuously creating enemies. This was a decision Simon made after continuously contemplating the development path of the Westeros system in recent months. Even if the Westeros system became strong enough in the future, he did not intend to change this approach.
Therefore, Daenerys Entertainment began contacting Panasonic last week and even sent a rough draft cooperation proposal in advance. Simon and Akio Tanii finally agreed to meet this afternoon.
As it was nearing noon, Simon and his entourage disembarked from the plane, and Panasonic did not neglect them, specifically preparing a luncheon.
However, the scale of the luncheon was very small. If translators were excluded, there were only Simon and Akio Tanii.
Simon didn't intend to make his sudden arrival in Japan widely known, so he was happy with this arrangement.
Moreover, with only Akio Tanii present at the luncheon, Simon roughly guessed the reason.
Simon's purpose for this trip to Japan was to persuade Panasonic to withdraw from the MCA acquisition. For Panasonic, after the death of its founder Konosuke Matsushita last year, the internal workings of this massive corporate giant were not unified. Akio Tanii wanted to acquire MCA, but there was considerable internal opposition within Panasonic. Akio Tanii probably didn't want the news of his meeting with Simon to get out.
Inside an exquisite Japanese restaurant in Osaka city.
Akio Tanii was a short, bespectacled old man around sixty years old, appearing somewhat stern.
After introductions, everyone went to a private room.
There were four people in total: Akio Tanii and his translator, a tall, thin middle-aged man.
Simon brought Claire Gaines, because of the frequent economic cooperation between Australia and Japan in the 1980s. Miss C, who graduated from the University of Melbourne, majored in civil engineering and also minored in Japanese, reaching a very high level, more than enough to act as a translator.
Speaking of which, the four 'vases' (A, B, C, D) Janette chose for him, although not as highly educated as the new housekeeper Alice Ferguson, who was a top student, were all elite-level. Otherwise, the new housekeeper wouldn't have been subtly tricked by Miss C on her first day.
According to the women, A, B, C, and D could all complement Simon.
For example, Miss C majored in 'civil engineering' at university, a field Simon knew nothing about, and Japanese was also a weakness for Simon.
The four sat cross-legged on the floor around a typical Japanese dining table, casually chatting about various topics at first. After the waitstaff served lunch and withdrew, the conversation became a bit more open.
Miss C was not shy, sitting very close to Simon, leaning in and whispering into his ear, translating what the man opposite said: "Simon, what do you think of the current state of the Japanese economy? Will it continue to worsen?"
Simon skilfully held his chopsticks, savouring the sashimi in front of him. Hearing the question, he looked at Akio Tanii opposite him and said, "It won't worsen to that extent, but it should remain in a downward trend for a few more years".
The middle-aged translator also translated in a low voice into Akio Tanii's ear.
After hearing the translation, Akio Tanii seemed somewhat unconvinced and asked more questions.
Miss C translated in real-time: "The Japanese government has already taken many rescue measures, and the foundation of the Japanese economy is very solid, so it shouldn't remain in a slump for a long time, right?"
Simon said, "I've always paid some attention to this. The Bank of Japan has recently started lowering interest rates again, which I think is very unwise. The Japanese economic bubble still hasn't completely dissipated, especially the real estate bubble. Rushing to lower interest rates and increase liquidity now will only cause funds to flow into the real estate market, which won't benefit the real economy much".
"Do you mean that Japan needs to completely abandon the real estate industry?"
Simon nodded and smiled, "This is a very difficult choice, but it is also a necessary one".
"Simon, when do you think the Japanese economy will begin to recover?"
Simon smiled and shook his head: "I don't know about that. There have been many economic crises throughout history. Some countries have come through unscathed, recovering in two or three years, while others have been devastated and remained in decline. The key still depends on how the Japanese government acts".
"So, Simon, what do you think is the most serious problem facing the Japanese economy, besides the real estate bubble?"
Simon hadn't expected Akio Tanii to relentlessly pursue these questions concerning national economic issues. Noticing that the translator opposite seemed even more focused than Akio Tanii, he roughly guessed something. After all, Cersei Capital's operations around the Japanese stock market last year could indeed be called classic. Moreover, Simon's own rise to prominence was legendary, having accumulated enormous capital through several successive bets on macroeconomic trends.
After a moment of thought, Simon didn't hold back. Anyway, he was saying it now, and even if someone cared, when it came to the future of a country, few people would easily heed the opinions of an outsider.
"I think the most serious problem facing the Japanese economy is corporate debt. If this problem is not resolved properly, the Japanese economy may remain stagnant, possibly for more than ten years".
"We have already lowered bank interest rates, which should alleviate the cash flow pressure on businesses".
"No, Akio, you've got one thing wrong", Simon shook his head and said, "The problem with Japanese companies isn't a lack of money, but rather that they're afraid to borrow more. Because after the stock market bubble burst, with the sharp decline in market value, many Japanese companies' debt ratios will significantly increase. In the next few years, these Japanese companies will only focus on reducing their debt to make their balance sheets healthier. Therefore, measures like lowering interest rates will have little effect on the real economy".
Across the table, Akio Tanii finally stopped asking questions continuously. After a moment of thought, he spoke again: "That sounds like an insoluble situation".
Simon nodded: "Yes, if companies are determined to reduce debt and are afraid to borrow money, it will certainly lead to a decrease in liquidity and further trigger deflation. Once this situation occurs, the entire national economy will lose vitality and never recover".
Akio Tanii pondered for a moment again, then looked up at Simon and asked, "Is there really no solution?"
Simon said, "There are actually solutions. Roosevelt did a good job back then, vigorously developing infrastructure through government investment. The key is to spend the money. However, Japan's infrastructure is already very complete, so what you need to do is still spend the money, preferably abroad".
After hearing the translator's explanation, Akio Tanii smiled and said, "Simon, you are a very honest person".
Simon roughly understood the meaning of Akio Tanii's words and their implications, and smiled, "Yes, if I were to follow the purpose of my visit, I should advise you to keep as much cash as possible and not make foreign investments. However, I think Japan's more suitable investment targets should be emerging developing countries, such as various Asian countries and Eastern European countries. The United States is not a very good choice, and Hollywood, for Panasonic, is even more inappropriate".
Hearing Simon mention Hollywood, Akio Tanii didn't change the subject but asked earnestly, "Simon, why do you say Hollywood is not a good choice for Panasonic?"
Simon thought for a moment and said, "Akio, do you know about the 'Hollywood accounting'?"
Akio Tanii nodded and said, "I've heard a little about it. It's a common accounting practice used by Hollywood studios to convert most of their profits into expenses in order to reduce taxes and royalties for creative personnel".
"That's just one type of Hollywood accounting", Simon nodded and said, "Actually, there's another type of Hollywood accounting, which is for outsiders. For example, Panasonic, if you invest $10 million in a film that grosses $100 million at the North American box office, how much do you think you'd get?"
Akio Tanii calculated for a moment and said, "If Panasonic buys MCA, I think, after deducting production and distribution costs, the company should earn at least $30 million, right?"
"No, even if Panasonic becomes the owner of MCA, you could still lose money".
"How so?"
"I heard that you plan to let Wasserman and Sheinberg continue to manage this company. According to my example, with a $10 million investment and $100 million at the box office, you seem to be able to earn over $30 million. But the more likely scenario is that Wasserman will sign very generous profit-sharing contracts with the key creative personnel, 20% of the net profit to the director, like Spielberg, and 20% of the net profit to the lead actor, like big stars such as Dustin Hoffman. Then, there are also producer's cuts and the inevitably inflated marketing and distribution costs after a big hit. Even if a $10 million movie grosses $100 million, you might not earn a single penny".
"Simon, I don't think that situation will happen".
"In fact, this has already happened. Akio, you can have someone investigate the information on 'Hook', which Columbia Pictures is currently producing. They are using this profit-sharing model. Moreover, because it's directed by Spielberg and stars Dustin Hoffman and Robin Williams, the production cost of 'Hook' is far more than $10 million. I don't think Sony will make much money from this project. If even projects involving people like Spielberg and Dustin Hoffman can't make money for Sony, do you think other films Sony invests in will be profitable?"
Akio Tanii hesitated for a moment and asked, "Simon, actually, we don't necessarily need Wasserman and them to run Universal. And we will strengthen our oversight of the company".
Simon shook his head and said, "Hollywood is actually a very closed circle. I know you might still be considering having Michael Ovitz run this company. Ovitz is indeed an excellent agent, but you might not be too clear about what he's been doing all these years. What Ovitz has been doing for the past decade is trying to help CAA clients get higher salaries. Even if he takes control of MCA, this mindset won't easily change. He will still attract talent through very generous profit-sharing contracts. Perhaps it will bring you a superficial prosperity, but as for the profits, of course, they will still be kept for Hollywood's insiders as much as possible. You are, after all, outsiders".
Akio Tanii was still somewhat unconvinced, saying, "Simon, this is just your side of the story".
Simon smiled and continued, "Actually, there's one last option: Panasonic sending its own people to run the company. This is actually the correct approach, because Hollywood studios need paternalistic management where one person makes all the decisions; they don't need professional managers. However, for Panasonic, this idea is even worse, because you simply don't understand the entertainment industry. Moreover, by personally running the company, you will become even more thoroughly outsiders, and Hollywood will have even less need for any scruples when extracting profits from you. Even a 500-pound sumo wrestler, after a turn in Hollywood, would probably emerge as skin and bones".
Miss C, who had been listening intently, couldn't help but laugh out loud at Simon's final analogy. Realizing her impropriety, the lady quickly apologized, lowered her eyes, and awkwardly picked up her chopsticks, pretending to be busy.
Akio Tanii, however, did not laugh. His expression gradually grew serious, and he stared at Simon, saying, "I suddenly realized something, Simon. You are also one of the 'Hollywood people' you spoke of. Everything you've said is fundamentally just to make Panasonic withdraw from the MCA acquisition".
"I don't deny that point; that's why I came to Japan", Simon nodded and said, "However, Akio, I am a very honest person, as you just said. Moreover, you can have someone investigate what I've said; there are many similar cases in Hollywood. For example, Columbia, although Sony and Panasonic are competitors, you can investigate what the two people Sony hired to run the company have done this past year; they are completely hollowing out the company".
Akio Tanii hesitated for a moment, then nodded solemnly and said, "I will".
"Let's talk about our cooperation", Simon then said. "Panasonic's acquisition of MCA is largely to follow Sony's lead and prevent them from using content advantages to encroach on Panasonic's market share in film and music hardware. What you want, Daenerys Entertainment can provide, and the effect will be better than Panasonic acquiring MCA. For example, in terms of films, in the past few years, Daenerys Entertainment has accounted for a large portion of the top ten box office films in North America.
This is our content advantage. Now, Daenerys Entertainment also owns the largest video rental chain in North America. In both content and distribution, Daenerys Entertainment has unparalleled advantages in Hollywood. As long as we cooperate, it's not impossible to completely squeeze Sony's VCRs out of the market. You should have already seen the information I had sent in advance; this is just one aspect of our cooperation".