Chapter 23: Conclusion

Translator: Nyoi-Bo Studio

Editor: Nyoi-Bo Studio

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Tickets, everyone, get your tickets! Favorites, everybody add to favorites! Wow, thank you all!

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“What? I heard that right, didn’t I? Yang, you made it?!” Zachary exclaimed in shock, unable to believe the news: “Are you joking? What?! Seriously not joking? So, I’m going to be the lead in a movie that’s being released soon!?”

“Wow, man, I told you you’d make it! You didn’t let me down!” Joshua shouted with joy: “My DV camera is going to be worth a fortune now; it will be snatched up by fans!”

“Oh my goodness…! The merciful Lord has granted my wish!” Upon hearing the good news, Jessica cried out in astonishment and joy, unable to contain herself: “Oh my gosh! This is amazing! Oh my gosh, is this for real? Yang, please tell me this is real!”

After sharing the news with Rachel first, Wang Yang then called other close friends to share the joy. Zachary, Jessica, and others were of course very happy and excited for him; only the chubby Harry George, upon receiving the call and hearing the news, cursed angrily, “Bullshit, I don’t buy it!” and hung up.

That night, Wang Yang spent in a hotel near the beach in Santa Monica, where he lay in bed for a long time without sleeping, too excited to close his eyes. He simply got up, moved a chair to the balcony, and sat there, the beach below quiet under the night sky, the gentle murmur of the waves faintly audible. As he watched the indistinct sea stretching out into the distance and the moon above, only then did the quietude begin to settle his racing mind.

The next day Wang Yang visited the headquarters of Lionsgate again, naturally to discuss the details of the distribution contract.

“Hello, Mr. Wang.” The pretty Caucasian receptionist Jennifer smiled at Wang Yang, her demeanor much warmer than the day before—clearly, she had learned about the company buying Wang Yang’s film: “Mr. Ortenberg has been waiting for you since early this morning, Mr. Wang. Please follow me.”

“Okay, sure!” Wang Yang followed Jennifer to Tom Ortenberg’s office.

The office door was open; Jennifer knocked, and Tom Ortenberg, busy at his desk, looked up and greeted with a smile: “Hey, come on in!” He looked at Wang Yang walking in and asked with interest: “Young man, did you sleep well last night?”

Wang Yang sat down in the chair in front of the desk, shaking his head with a smile, and said, “Not very well, sir.” He rolled his eyes mockingly: “I’m just too happy about all this. As soon as I close my eyes, all I can think about is the film. Have I really made it? Oh, I couldn’t sleep at all!” He continued with a laugh: “You know, I’m afraid it’s all a dream, that I’ll wake up and nothing will be there.”

Tom gave Wang Yang an understanding smile, winking, and said, “Young man, this is no dream! Let me tell you some good news. Our CEO, Mr. Bix, has agreed to distribute your movie.”

“Wow! That’s really good news, thank you, Mr. Ortenberg!” Wang Yang clenched his fist quietly, smiling happily, finally relieved of his last major concern. His signing with Lionsgate was now a certainty.

“I’m in charge of this deal.” Tom smiled, being the head of acquisitions, it was natural that negotiations with Wang Yang fell to him. He took out a contract and handed it to Wang Yang: “This is our proposal. Take a look.”

Wang Yang nodded, took the contract, and laid it on the desk to read carefully. The contract stated that he would permanently give the North American distribution rights, international distribution rights, VCD, DVD, television broadcasting rights, and other distribution rights of “Paranormal Activity” to Lionsgate Films. In terms of compensation, Lionsgate would not pay an acquisition fee, instead, they would use a profit-sharing model.

The specifics of the profit-sharing were: in North America, if the pre-tax box office profit was under one million, Wang Yang would receive a 10% share; over five million, 20%; over ten million, 30%; over fifty million, 40%; over a hundred million, 50%. However, if the film ultimately failed to recoup costs and incurred a loss, Wang Yang would only get a 5% share.

This profit-sharing ratio was exactly what Wang Yang had envisioned yesterday, only with an added clause for a loss scenario.

In international regions, the ratio was the same; for VCD, DVD, and video rental projects, Lionsgate did not adopt the box office profit-sharing ratios, proposing instead that Wang Yang would receive a 10% share of profits regardless of the final amount earned.

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Wang Yang roughly knew the reason; it must be because Lionsgate wasn’t very optimistic about the movie’s box office prospects, yet they saw potential for the film in the DVD market. Some movies are like that—they don’t do well in theaters, but they catch fire in the DVD market. Maybe these kinds of films aren’t suitable for the big screen or theaters, but are better suited for watching at home on a computer or TV.

But what made Wang Yang frown was not the DVD revenue-sharing ratio; it was that he seemed to have forgotten yesterday that box office profits are split between North America and overseas. With that in mind, it would be difficult for him to secure a 50% share. Because referencing “The Blair Witch”, the first DV movie released, that movie grossed over $200 million but only half came from North America and overseas. After the theaters’ shares were distributed, neither North American nor overseas box office profits before taxes would exceed one hundred million, so naturally, he would not be able to receive a 50% share.

“Is it possible to modify it so that the global pre-tax box office determines the revenue-sharing ratio?” Wang Yang asked, looking at Tom, but he knew his request was basically impossible.

As expected, Tom Ortenberg shrugged his shoulders and rejected the idea, “No, you have to understand that box office statistics for North America and overseas are different systems, and they can’t be synchronized in terms of timing. This makes it unfavorable for implementing revenue-sharing.” He gave an example, “For instance, a movie might finish its run in North America and then be released overseas only six months or even a year later. Are we supposed to wait a year to decide how to share the revenue?”

Wang Yang silently nodded his head, fully aware that Tom was speaking the truth, so he had no interest in further pursuing this point.

Tom leaned back in his chair and said, “Yang, don’t worry. Only if the movie performs really well will we consider overseas distribution.” He spread his hands holding the pen and added, “In other words, if there’s overseas distribution, your revenue share is already over 20%, and that’s not a small sum.”

“Yeah, I know,” Wang Yang smiled and continued to read the contract until he finished and closed it. Then he looked up and stated firmly, “The DVD revenue share should be increased to 20%.” Tom shook his head, “At most 15%, that’s the company’s decision.” Wang Yang pondered for a moment then nodded. He didn’t have much to bargain with Lionsgate, he was in a weak negotiating position, and couldn’t demand too much or get approval for more.

After agreeing on the DVD revenue-sharing ratio, Wang Yang added, “Also, the copyright for the sequel and title rights should remain mine.”

To this demand, Tom readily agreed, “OK, you can keep those rights.” In fact, unless it was a complete buyout, these rights should naturally belong to the producers. Lionsgate had never intended to take advantage of these rights, as they believed a sequel would only be made if the film performed exceptionally well and they didn’t think “Paranormal Activity” was eligible. Tom added with a smile, “However, our company has the right of first refusal.”

“Of course,” Wang Yang nodded, smiling inwardly. With this provision, Lionsgate would have to pay him a fee if they wanted to produce “Paranormal Activity 2” or “Paranormal Activity 3” in the future—a small compensation. He extended his hand to Tom Ortenberg across the table, “Sir, I have no further comments.”

Tom set down his pen, shook hands with Wang Yang, and smiled, “It’s a pleasure doing business with you, young man.”

“The pleasure is mine!” Wang Yang also smiled.

Although the contract details were mostly agreed upon, both parties didn’t sign immediately, scheduling the official signing for two days later. This was because Wang Yang needed professional legal advice. He rushed back to Los Angeles with the revised contract in hand, intending to consult a law firm for a lawyer to review his contract. After all, he wasn’t a legal expert and wasn’t familiar with all the legal pitfalls, so he had to be cautious.

Particularly since he had not joined any unions or agencies, if something went wrong, no one would help him.

What could go wrong? Just look at the follow-up reporting for “The Blair Witch”: after creating a box office miracle grossing over $200 million, Artisan Company, which had agreed to give the producers a 20% dividend, was reluctant to pay up, postponing the young producers’ share. The young producers naturally took Artisan Company to court, causing a lengthy dispute and a two-year lawsuit before they finally received their due.

While Lionsgate in later years didn’t face such scandals, Wang Yang couldn’t afford to take his chances.

After resting in his apartment for one night, the next day Wang Yang took his contract to a law firm called “Integrity”, which was recommended to him by Jessica. This medium-sized firm had a good reputation, sound knowledge of movie-related laws, and also served as the legal consultant for her father’s real estate company.

Wang Yang consulted a young lawyer in his thirties named Hebrew Karl, whose hourly fee was two hundred US dollars, a mid-range charge. Hebrew Karl studied Wang Yang’s contract several times before smiling confidently at Wang Yang, “Mr. Wang, this contract is fine, you can confidently sign your name on it. If the other party defaults on the dividend payments, they will definitely lose any lawsuit that follows.”

“Oh, thank God,” Wang Yang immediately sighed with relief, as Lionsgate had not let him down.

Afterwards, Hebrew Karl offered Wang Yang some advice. As the sole owner of all rights to this movie, Wang Yang didn’t need to register a film company; signing the contract with Lionsgate as an individual would suffice, saving him from paying various corporate taxes and only requiring him to pay personal taxes.

Wang Yang left the Integrity Law Firm feeling completely satisfied. Although spending three hundred US dollars had once again brought him close to not being able to afford even his car fare, the expenditure was absolutely worth it. He didn’t want to be owed dividends by Lionsgate nor possibly win a lawsuit because of some inexplicable clauses or legal loopholes in the contract.

Returning to his apartment, he prepared to head to Santa Monica the next day to officially sign the contract. Wang Yang happily took a shower, humming a tune as he walked out of the bathroom and into the living room. Looking at the contract documents on the sofa, he picked them up and kissed them fiercely, then smiled at the contract and said, “My goodness, how can you be so adorable!” He sat down on the sofa, about to turn on the TV when his phone suddenly rang.

“Who is it?” Wang Yang picked up the mobile phone from the TV cabinet, glanced at the caller ID, and was stunned. It was Stephen Thomas, the manager of the film purchasing department from Artisan Entertainment! What was he calling for? Wang Yang frowned and answered, “Hello, this is Wang Yang.”

“Hello, Mr. Wang, it’s me, Stephen Thomas from Artisan Company.” It was indeed Thomas’s voice.

Artisan Company had said they would have an internal discussion. Does that mean they had reached a decision now? With curiosity in his voice, Wang Yang asked, “Oh, Mr. Thomas, hello, may I ask what’s the matter?”

Thomas laughed softly on the other end, his tone secretive, “Well, Mr. Wang, we’ve decided to purchase your movie.”

Although it was expected, Wang Yang still couldn’t help but be stunned. Artisan Company wanted to buy his movie?! What had happened to make them change their minds? Had Thomas’s fainting condition been cured? He couldn’t help but shake his head and smile. None of that mattered anymore. He declined, “No, Mr. Thomas, my movie has already found a distributor.”

“What?!” Thomas was even more astonished. He had never imagined that this Chinese kid’s movie could have such a strong appeal. He found it hard to believe, but with the company’s instructions, he had no choice but to ask, “Oh, have we missed our chance? Mr. Wang, have you already signed a contract with them?” Wang Yang said, “Not yet.”

Hearing this, Thomas asked again, “Then I wonder if there’s still a chance for us at Artisan? You know, after our discussion, we decided to take a risk. You would get two hundred thousand dollars for the movie rights.”

Wang Yang laughed and declined without hesitation, “Still no, I’ve already negotiated with the company, and they’ve offered very good terms. Plus, I’m very grateful to them for giving me this opportunity.” He shrugged and said into the phone, “So I’m sorry, Mr. Thomas.” Then he wondered why Artisan Company was suddenly so determined; two hundred thousand was not a small sum for a movie made on a budget of ten thousand dollars.

Actually, the matter was simple. The last time he left Artisan Company, he had left a DVD copy for their internal discussion. Thomas hadn’t really cared at the time and had just set the DVD aside. However, in recent days, by chance, the manager of the distribution department at Artisan watched the DVD, purely out of entertainment and ended up being seriously scared. Afterward, feeling that it was an excellent movie, he discussed with Thomas the prospect of acquiring it.

However, Thomas still objected while the manager refused to give up. He took the DVD to the CEO’s office, and the CEO of Artisan Company himself was scared out of his wits. Having in the future purchased The Blair Witch, he immediately recognized the extraordinary potential of this DV movie and thought it was worth taking a risk for. So, he made the decision to acquire Paranormal Activity.

But they were one step too late; Wang Yang had already negotiated with Lionsgate.

Thomas, frowning, upped his offer, “Mr. Wang, how about three hundred thousand?” Wang Yang still said “No.” Thomas gritted his teeth and stated the company’s top offer, “Five hundred thousand!?” Wang Yang still lightly laughed and said “No.” Thomas felt helpless and somewhat angry as he asked, “Mr. Wang, could you tell me, what’s the price that company offered?”

“Oh, I’m afraid I can’t just reveal that; it might be a trade secret,” Wang Yang chuckled and declined to answer Thomas’s question, directly saying, “Mr. Thomas, it’s a done deal. Although we haven’t signed the contract yet, there won’t be any changes.”

Even if Artisan Company’s offer was more favorable than Lionsgate, Wang Yang wouldn’t consider it. Firstly, he truly appreciated Lionsgate; secondly, the limited information in his mind showed that Artisan Company “had” a history of withholding royalties for The Blair Witch and subsequently got acquired by Lionsgate. Why give up a sure path for a dead end?

“Okay then, I won’t disturb you further. Goodbye, Mr. Wang,” Thomas said stiffly, and then the phone started emitting the “beep beep beep” tone.

Wang Yang hung up the phone with a smile, surprised that Artisan Company had suddenly had a change of heart. Suddenly, he furrowed his brow, a thought flashing through his mind. Maybe he could take advantage of Artisan Company’s change in attitude to accelerate the release of Paranormal Activity… He calmed his thoughts and mulled it over thoroughly.

The next day, in the Lionsgate headquarters building in Santa Monica, the film purchasing conference room.

Looking at the two formal contracts on the conference table, Wang Yang, dressed in formal attire, took a deep breath. He glanced over at Jon Feltheimer, Tom Ortenberg, and Michael Paseornek, the three Lionsgate executives standing beside him. They all had encouraging smiles on their faces. Wang Yang smiled back at them, picked up the pen on the table, and signed his name on the contracts.

“Congratulations, young man!” Jon and the other three executives, along with a Caucasian lawyer who was present as a notary, all started clapping and continuously congratulated Wang Yang.

“Thank you!” Wang Yang said with a smile as he shook hands with them one by one. His heart was filled with joy and excitement. Finally, it was settled, his movie had really gotten distribution, and he could loudly tell others that he was not a loser! He would not spend his entire life at McDonald’s! His dream would not just pass him by, he was in the process of realizing his aspiration since childhood!

After signing the contract, Wang Yang went to Jon Feltheimer’s office, as Jon was the distribution manager, so all the subsequent distribution work for the movie was his responsibility.

“Mr. Feltheimer, I have a question,” Wang Yang asked while sitting in front of the office desk, looking at Jon across from him. “I was wondering when Lionsgate might consider releasing my movie?”

Jon Feltheimer laughed, spreading his hands, “Wow, young man, what’s the rush? You are still young.” He laughed a few times before seriously adding, “We will release it, but you know, it’s already late May, and summer slot is right around the corner, while our screening schedule had been arranged earlier. Your movie, maybe it would be more suitable to launch at the end of the year.”

The end of the year, that would be half a year later! Indeed it was so. Wang Yang couldn’t help but frown slightly. In fact, releasing a movie half a year after signing a contract was not slow, and others wouldn’t have any objections, but he couldn’t wait. Yes, the summer vacation was coming soon, and with the end of the semester, the news of his expulsion from the University of Southern California couldn’t be kept hidden anymore. Without any achievements, it’d be hard to avoid a conflict with his parents.

Moreover, he needed money to live, and he needed it soon. The release date had to be moved up! Determined, Wang Yang shook his head and said, “Sir, I think we need to move up the screening time. No, it’s not that I’m in a hurry. It’s just that…” He shrugged and calmly continued, “Artisan Company contacted me yesterday. They offered US$500,000, hoping to buy my work.”

Upon hearing this, Jon was slightly taken aback. US$500,000? To know, the buyout limit of Lionsgate was only US$300,000. Pretending to be indifferent, he said, “Oh? Artisan Entertainment? I know it. Have you been there before?”

Wang Yang nodded, “Yes, I’ve been there long ago. After watching the movie, they said it needed internal consideration. Then they got back to me yesterday with their answer, of course, I rejected them, but I could tell they were very reluctant to lose my movie.” He smiled genuinely and continued, “Sir, I’m not boasting. What I mean to say is, Artisan Company has come to their senses. They’re offering US$500,000, which shows they see the potential in DV movies. They want the title of ‘the company that distributed the first DV movie’!”

Finally, Jon frowned, nodding slightly, acknowledging Wang Yang’s point.

“Sir, you know my movie only cost US$10,000 and took only a week to shoot,” Wang Yang deliberately spoke in a low and tense tone. “Artisan is so optimistic about DV movies, what if they simply shoot one themselves? They don’t need a very good script, just a few tens of thousands of dollars, a week’s time, and they could shoot the movie and release it to the market before us.”

“Hmm…” Jon remained silent. He took a look at Wang Yang. If things were as this young man said, there indeed was a crisis. But was the young man lying? Jon chuckled internally. Coincidentally, he had a good friend at Artisan, not someone at a high position, but someone who could still find out some information.

Wang Yang faced Jon with an open and honest look. He didn’t feel guilty at all because he had not lied at all. Moreover, he hoped Jon would go and check this out; Artisan indeed had offered US$500,000 for his movie. As long as Jon confirmed this information, whether or not Artisan revealed any intention to shoot a DV movie, Lionsgate would be left guessing.

“I understand.” Seeing Wang Yang’s eyes did not seem deceitful, Jon nodded and replied, “I’ll consider it.” Wang Yang said, “Alright, Mr. Feltheimer, I don’t have any other matters then, goodbye.” As soon as Wang Yang left the office, Jon picked up the phone on the desk and called his friend at Artisan, “Hi, I hear you’re interested in acquiring a DV movie? Oh, really? Your CEO likes it? So what are your plans now…”

After a long talk, Jon put down the receiver. He silently stared at the ceiling. Wang Yang hadn’t lied; Artisan did want to acquire “Paranormal Activity.” Because they missed a good opportunity, Stephen Thomas was even reprimanded by the company. But as for whether they would shoot a DV movie, there was no news on that yet… He thought for a while, then picked up the 1998 Lionsgate movie distribution schedule on the desk and silently started reading it.

By the time Wang Yang returned to Los Angeles, night was nearing. He had just entered his apartment and unlocked the door when he received a call from Jon.

“Yang, we’ve decided. ‘Paranormal Activity’ will immediately enter the promotional phase, with a preliminary plan for a test screening at the beginning of August,” Jon Feltheimer said with a smile, “Of course, whether it will be released then will depend on the promotional results and reactions.”

Wang Yang clenched his fists tightly, jumped up, and silently swung in the air, YES!