"Transformers' global opening-week box office was $482 million?"
"Transformers' game sold 3 million copies worldwide in its first month?"
"Heh—"
"So this is Isabella Haywood's counterattack?"
"This counterattack is really—too—too fierce!"
Tuesday, July 10, 2007.
New York. Clear skies for miles.
Although it was midsummer, New York wasn't muggy today, perhaps because it had rained early that morning.
The breeze flowing through the city even made people feel comfortable.
Of course, New York's summers weren't actually that hot. The temperature in July usually hovered around 77 degrees Fahrenheit—about 25 degrees Celsius.
However, the pleasant weather did nothing for Marvel chairman Isaac Perlmutter's mood.
The moment he saw the report on Transformers, all the resentment and irritation in his heart surged up at once.
If he'd had a negative-emotion collector on him just then, he might have been able to defeat Superman with it.
"Okay, so where's the ceiling for the Transformers franchise?"
"Where's the ceiling for the movie's box office and the game's sales?"
Isaac Perlmutter put down the report and looked up sharply.
His question made the assistant who'd come to deliver it purse his lips, visibly uneasy.
Under normal circumstances, the final section of any project-monitoring report in the entertainment industry included "forecast figures."
For example, after Disney's Pirates of the Caribbean was released, as rivals like Warner Bros. and Paramount tracked and analyzed it, the report's author would draft a "future forecast" based on existing market data, prior industry trends, or personal judgment.
For example:
Based on current data, what would Pirates of the Caribbean's final box office be?
Based on current data, how high could its home video sales run?
Based on current data, when would it leave theaters, and when would the sequel start filming?
The entertainment industry was tightly closed, with a fixed ceiling. Studios could keep releasing movies, but theaters couldn't expand their screen counts indefinitely to keep showing them.
So whenever a project's forecast shifted, every decision made on the old forecast had to change too. In this industry, moving one hair affected the whole body.
But the Transformers report Isaac Perlmutter was reading today had no forecast at all.
Not because the analysts hadn't written one.
They had. But before the report reached him, his assistant had deleted it—
—worried that if his boss saw what the professionals were predicting, he'd fly into a rage.
"Uh—boss—this—"
The assistant stammered.
"Speak plainly," Isaac Perlmutter said, waving his hand sharply. "I know the forecasts exist. If they don't, that's your negligence, and I'll have you out the door immediately."
"Okay—their forecast is that the movie's box office will break $800 million, and game sales will hit 8 million."
"That's the conservative estimate. If things go better—global box office could break $1 billion, and game sales could reach 10 million."
"Of course, the optimistic numbers have nothing to do with Transformers itself. They depend entirely on market response."
Unwilling to risk his high-paying job, the assistant poured out every figure at once, like beans tipped from a bamboo tube.
The numbers made Isaac Perlmutter narrow his eyes, his hands gripping the armrests.
Just as his assistant had feared, he couldn't accept these forecasts.
It wasn't that he hadn't seen Transformers' success coming. It was that the success was simply too clean, too complete.
Everyone already knew Isabella had been winning all along. But if every one of her wins kept being this earth-shaking, she'd have no trouble handling whatever move Isaac Perlmutter made next.
Say, for instance, that Isaac Perlmutter wanted to join forces with Steve Ballmer. Isabella could simply point out that Xbox's offer lacked sincerity—that she made more money on casual gaming work alone than what Xbox was offering—and use that to make Marvel refuse to cooperate with Xbox, or with Microsoft at all.
When Isabella had racked up more wins than other people had eaten meals, she wouldn't even need to try—letting a little profit slip through her fingers would be enough to win over Marvel's other shareholders as allies.
And then how would the alliance between Isaac Perlmutter and Steve Ballmer move forward at all?
Precisely because of this, cursing Isabella to fail had become something close to a daily ritual for Isaac Perlmutter.
Unfortunately, God's favor clearly wasn't landing on him—His most devout believer.
"Sigh—"
He let out a heavy breath, leaned back in his chair, and asked, "How's the situation with Facebook?"
Since the problems Transformers might cause weren't something he could deal with immediately, setting them aside for now was the only option.
As for why he suddenly brought up Facebook—
"Boss, as you expected, beaver emotes related to Transformers have already shown up on Facebook," the assistant said. "They're based on the badges from Isabella's collaboration with Hasbro."
"Judging by the current situation, Microsoft's willingness to take Isabella down is strong."
Good.
Since he couldn't control the enemy's results or limit her influence directly, gripping his ally's hand tight and hoping that ally would unleash some divine intervention to finish her off was, at this point, Isaac Perlmutter's greatest hope.
The logic wasn't hard to follow. Isabella's personal influence had already grown strong enough to sway Marvel's other shareholders. If Microsoft's hostility toward her turned out to be limited, Isaac Perlmutter would be finished—because he had no righteous cause to take her down on his own.
Right now, only if Microsoft firmly backed him could he move against her. And only after moving against her could he find a reasonable excuse to pull Lehman into the fight behind him.
He couldn't probe Microsoft's intentions directly—showing weakness to them meant they'd pick him apart until nothing was left—so reading Microsoft's attitude through its other moves was the only option.
And in Isaac Perlmutter's eyes, Facebook was the barometer for Microsoft's intentions.
He'd already looked into the alliance between Microsoft and Facebook thoroughly. In his view, Facebook was Microsoft's knife.
Facebook had no great pedigree of its own—so it would only dare ride Isabella and HP's popularity to gain users if it had real backing above it.
So as long as Facebook kept behaving this boldly, still riding Isabella's traffic, Microsoft remained a stable ally in Isaac Perlmutter's world.
"Okay, okay, okay—"
Isaac Perlmutter nodded slightly, reassured by Microsoft's apparent attitude.
After muttering to himself a while, he asked again, "How's the situation with Lehman? Still bad?"
"Uh—yes—" The assistant understood exactly what his boss meant. After a pause, he said, "But based on what we've gathered, Lehman's problems should be solvable. They're confident the U.S. government will save them."
"And that confidence has a source: Washington is already discussing how to rescue Bear Stearns. Just last month."
Isaac Perlmutter was no fool. With his backing rooted in Wall Street, how could he not smell the smoke of the subprime mortgage crisis?
In fact, he'd sensed something off as early as 2005—because by the end of the 1990s, Lehman had already stopped behaving like a proper investment bank.
In 1997, Lehman acquired Aurora Loan Services, a Colorado-based mortgage lending institution. From that point on, Lehman was in the subprime business.
In 2000, Lehman acquired BNC Mortgage on the West Coast—another subprime lender. After that deal closed, Lehman became a leading player in the subprime mortgage market outright.
And its growth was explosive.
In 2003, Lehman's subprime loans totaled only $18.2 billion. By 2004, they'd exceeded $40 billion. By 2005, Lehman's Aurora and BNC were issuing $40 billion in loans per month. By 2006, that monthly volume was close to $50 billion.
Once Lehman's monthly subprime lending hit tens of billions, it wasn't an investment bank anymore. It was a hedge fund disguised as one.
So when the first default worth more than ten million in the subprime field appeared in 2005—the same year American fund manager Michael Burry completed a $60 million credit default swap on subprime mortgage bonds with Deutsche Bank—everyone who understood the industry already knew the bomb buried inside subprime mortgage bonds would go off within two years, at most.
But precisely because everyone could see the bomb ticking, everyone got even more excited to keep doing subprime lending.
There was nothing to be done about it. Who told everyone here to be capitalists? Capitalists only seize profits. As for the bomb? Just throw it to the U.S. government, right?
To put it more bluntly: Lehman and the others had spotted the bomb long ago, and decided to drag the U.S. government into the water with them.
Lehman: "I'm about to die. Are you politicians going to save me or not?"
Lehman: "If you print money to save me, if you send aircraft carriers out to rob the world to save me, then the only ones who die are some expendables scattered around the globe. But if you choose to stand by and watch me die—"
Lehman: "Then I'll drag you down to hell with me."
Over.
Yes—it was the same old line: in capitalist countries, weak governments exist to be manipulated, and to take the blame.
Just as was said before: media capital is the ultimate beneficiary of every strange ideology and movement in this world. Those ideologies and movements may look like they're seeking benefits for minority groups, but every ideology and every movement needs the media to spread it. So in the end, they all become weapons in the hands of media capital.
Lehman had known as early as 2005 that it was going to blow up—because its overall leverage ratio had already climbed to thirty times. If real estate valuations fell by just 3%, Wall Street would start dropping like dumplings into boiling water.
But Lehman wasn't afraid, because it had the confidence—and the ability—to drag American politicians down to hell with it.
And judging by the current situation, Lehman's bet was paying off.
After the Virginia Tech shooting faded from the news, New Century's bankruptcy reignited concerns about the subprime business. In early June, Bear Stearns' two real estate funds—worth more than $20 billion combined—hit default risk, but before they could blow up, then–Treasury Secretary Henry Paulson had Merrill Lynch step in to help.
Since politicians were so unusually afraid of dying politically, the only ones left to pay the bill for the subprime mortgage crisis were ordinary people, all over the world.
Since Lehman's survival was the key to Isaac Perlmutter's own comfortable life, learning that Lehman would make it through gave him real relief. He ran through a few more topics, his anxiety easing with each one, and once the rest had been more or less covered, he was ready to wave his assistant off.
But before he formally dismissed him, one more thing came to mind. "How's Iron Man coming along? Should be almost done, right?"
The ambush question caught the assistant off guard. He paused, then nodded. "Yes. Iron Man started filming in February this year and wrapped at the end of last month. It's in post-production now. Barring anything unexpected, it'll release on schedule next summer."
"And promotion's already underway. Kevin Feige should be in—"
"San Diego?"
That's right. Iron Man had wrapped filming. As long as post-production went smoothly, it would be ready for the public. And in Kevin Feige's plan, the film would ideally release in early May next year.
The reason came down to competition. Next summer was packed with blockbusters.
Speed Racer would be released next summer—directed by the Wachowski sisters of The Matrix fame, with a budget exceeding $120 million.
There was also The Chronicles of Narnia, a Disney-backed fantasy film with $225 million behind it.
Indiana Jones and the Kingdom of the Crystal Skull was coming too. Steven Spielberg had passed on Transformers because of this prior commitment.
Beyond those three, next summer's slate also included DreamWorks Animation's Kung Fu Panda, Pixar's WALL-E, Will Smith's Hancock, Dark Horse Comics' Hellboy, Warner Bros.' Journey to the Center of the Earth and The Dark Knight, and The Mummy sequel, Tomb of the Dragon Emperor.
With more than eleven blockbusters carrying budgets over $100 million hitting the 2008 summer season, the earlier a film released, the less competition it faced.
So why not push Iron Man to Thanksgiving or Christmas instead, given how packed the summer was? Simple: everyone knew the end of the year belonged to Harry Potter. Next year's holiday slot would have Order of the Phoenix: Part Two. No sane person went up against that—least of all Kevin Feige, whose boss happened to be Isabella herself. Even if his brain broke, he wasn't about to snipe his own boss.
And his brain hadn't broken.
"Okay! Okay! This layout's good—very good! We'll display Iron Man's armor right here!"
"Yeah, yeah, I know this arrangement makes the press conference area a little cramped, but we have to leave the left and right sides open—we'll be handing out gifts on both sides when the time comes!"
"Okay?"
While Isaac Perlmutter mulled over Iron Man from afar, the film's lead producer, Kevin Feige, was busy arranging its promotional booth inside the San Diego Convention Center. In a few days, San Diego Comic-Con—the world's largest ACG convention—would open here, making it the perfect venue to promote the film.
Since Iron Man had locked in an early-May release next summer, promotion needed to start now.
Just as Kevin Feige was meticulously overseeing every detail, determined not to waste this chance to make an impression, a curious voice came from behind him.
"You're Marvel? Promoting Iron Man? Isabella's Iron Man?"
The cautious voice made Kevin Feige turn. He found a bearded man in a baseball cap smiling at him.
Maybe the man looked harmless. Or maybe it was just that anyone who could get into the venue this early had to be either with the organizers or in the industry. Either way, Kevin Feige—himself wearing a baseball cap—nodded. "Yeah, we're Marvel. The work we're showing this time is Iron Man. So—"
"Oh, I'm really glad to see you here."
Before Kevin Feige could finish his confused trailing sentence, the bearded man reached out to shake his hand, introducing himself at the same time. "Hi, I'm Patrice Désilets. I'm Canadian—I'm here representing Ubisoft. Ubisoft Montreal. You know Ubisoft, right? We make games."