Chapter 31: Buying Libraries

Pokémon was released in theatres with less than 1 million in film production and almost 30 million in promotion and marketing. It was this 40 million film that created a huge surprise at the global and domestic box office. By September, the film had earned more than 200 million in the US and overseas and more than 100 million in peripheral sales and other deals.

Pokémon TV series was also in the pipeline and Nintendo itself came running to Rover Pictures animation branch - Rover Animation Studios in Japan. This movie started a successful IP and they would be a fool to not market this game, but Sunny politely declined them. He believed the true value of Pokémon will only come after the TV series is released and only then he will think about the Pokémon Game.

(Rover Pictures – CEO office)

"So, Kenneth, Ricky and John. We have a golden chance to expand our studios. I hope you can find targets for us to acquire and poach before others grab everything in the market. I hope you guys can personally deal with Orion, Fangoria or RKO or anyone else for that matter.

We have money right now and our team is fairly young, but we lack legacy or any kind of support. We don't have a film library and we lack media partners, contacts in publishing companies, music companies and even more local radio channels and TV production.

We have to move now, and we have to move fast and consolidate our position as a studio and not just as a production company or a distribution company. I want screenwriters and young directors to come to us like the big eight.

One year people. In one year, we can either establish our roots here or in future, we would have to seek external funds, or some big studios would swallow us up."

Sunny spoke in the meeting held in his office at July end and set the tone of their new movement. Rover Pictures went out like sharks in the US Entertainment market.

Smaller film studios, distribution houses or small production houses, everything and anything that can add value for them, were put on a long list.

Castle Rock and New Line Cinema

These two production houses that once produced almost 15-20 films in a year were nearly bankrupt and were at a major loss. The banks refused to extend their loans and their financial support; Group W was also in a difficult situation.

Sunny along with Kenneth met Group W senior executives and many of their board of directors persuading them to sell the studio's library and eventually make a good profit for the immediate need.

The value of these studios combined was as high as 800 million, but Kenneth and Sunny were not interested in their current productions or most of their on-ground assets or even the employees.

Sunny had just started properly organising his Rover Pictures and he was not ready to bring a huge number of employees when he has no work to support them or the need to do such.

During the same time, Group W was approached by Turner Broadcasting System, and they wanted to buy out these two companies. Even without the library, they were ready to shell almost 700 million for these two studios.

Group W felt this was a golden chance and happily speeded up the negotiations and legal proceedings. Rover pictures acquired Castle Rock and New Line Cinema's library completely in October in a 60 million deal.

Turner Broadcasting company also got into an agreement with Castle Rock, and it seemed they were ready to buy the two studios completely. However, considering their huge investment, they would take more than a year to finalise and settle this deal with authorities and employees of these two studios.

This deal brought more than 300 movies under Rover Pictures and sitcoms like - Seinfeld under their studio distribution network.

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Don't underestimate the power of old film libraries. Many old films are still sold on VHS tapes or showcased on Cable, and they bring a large amount of revenue for smaller studios.

New Line also had a lot of good horror movies in their library and their copyrights. Movies like - The Texas Chain Saw Massacre and A Nightmare on Elm Street.

Also, they had jewels like Teenage Mutant Ninja Turtles that made Sunny drool like a fool. These 60 million dollars were a good investment, and it can allow Rover Pictures to start making films that already have a good fanbase.

Then, they bid for Carolco pictures' library but were rejected. Carolco Pictures got a huge investment of almost 400 million dollars from many different investors and were not ready to sell its assets.

Despite this denial, Sunny, Kenneth, and Ricky didn't stop their movements.

Ricky met his old friend and struggling studio Manson International's current owner, Jonathan D. Krane.

After a long discussion and a few private meetings that involved cocaine, booze and bouncy boobs from young struggling actresses, Jonathan sold this Manson International along with a small library of 50 films for 12 million dollars cash.

Not only that, but Jonathan also came along with the studio and joined Rover Pictures as a producer. Before selling his company, he was the youngest CEO of a publicly traded company at the time. Hence, Sunny had no doubts about his ability and gladly welcomed him.

Sunny did fire more than 80 staff people later after the deal. They were not part of anything and only excess baggage.

Kenneth had to visit London and make more trips to many financial institutions like Merrill Lynch to try to acquire Island Records, but this struggling music and movie production house was silently sold to PolyGram and Kenneth's efforts were futile.

Sunny knew about PolyGram, and he was sure, this will be another opponent in future.

However, his trips to London were not in vain. Kenneth found a production company that was in some big legal trouble, Hemdale Film Corporation and managed to bring back its entire film library for less than 15 million dollars.

However, there was something more exciting for both Sunny and Kenneth.

Hemdale Film Corporation was 50-percent owner of the franchise rights of Terminator that they were trying to sell to Carolco Pictures, but Carolco was trying to find its own survival.

Hence, they also purchased this additional copyright for less than 5 million dollars in addition to the 25 million dollar deal.

The other 50-percent copyright was with James Cameron's ex-wife Gale Anne Hurd, but this was not a trouble for Sunny. He is ready to co-produce the movie as long as James Cameron is ready to direct it.

These deals drained more than 100 million dollars from Rover Pictures' finances but provided a solid library and clear future goals for Sunny.

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