Author | Shijie Han Zhongqiang Peng Shuo
Edit | Lao Na
Wang Zhongjun finally made Huayi brothers fall.
This time, it is the tenth year that Huayi has been on the market, at the beginning of the year. A performance forecast just disclosed shows that in the past year, Huayi Brothers achieved operating income of 3.898 billion yuan, a decrease of 1.23% from the same period last year, and the net profit attributable to shareholders of listed companies was -986 million yuan, a decrease of 219% year-on-year. This is the worst report card that Huayi Brothers has delivered since its listing.
htmlOn March 1, Huayi Brothers' closing market value remained at 12.03 billion yuan, which only increased by about 100 million yuan compared with the market value of 11.896 billion yuan on the first day of listing on October 30, 2009. After ten years, Huayi is still wandering around.The "Huayi era" of China's film and television industry is getting farther and farther away.
1
Reflection of the "lazy CEO"
The company explained that the main reason for the company's poor performance last year was that the box office of major films such as "Die Renjie: The Four Heavenly Kings" and "Yunnan Insect Valley" produced last year did not meet expectations; some of the company's TV series were not broadcast, and another core business - the decrease in revenue of the brand licensing and real-life entertainment sector.
Judging from the announcement, Huayi's performance did not meet expectations last year because its major sectors did not meet expectations. But if you analyze it in depth, Huayi Brothers' losses come from two aspects - big money spent and movies not done well.
htmlOn January 30, the founder and chairman of Huayi Brothers, Wang Zhongjun, published a letter to the outside world, publicly confessing that "Huayi Brothers suffered the biggest impact since its listing in 2018", and comprehensively reflected on the mistakes made by Huayi Brothers, directly hitting the two major problems the company is currently facing - the sluggish main business and financial pressure.letter stated that the film business has always been the core business of Huayi Brothers. The 1.9 billion box office of "Youth" and " Ex-3" in early 2018 laid a good foundation for the whole year, but since then, several movies produced by Huayi Brothers have suffered box office failures (" Mobile 2" was not released either), which directly led to the company's losses. "The performance of other projects in the future is not ideal. Not only did they not expand the results, but they sharply reduced their existing achievements."
Another problem is financial pressure. Wang Zhongjun bluntly stated that Huayi "has not very liquidity", and the financial pressure left by the company in the rapid expansion stage has been amplified at present.
Wang Zhongjun’s so-called legacy financial pressure comes from his previous large-scale purchases. In the past few years, the company has invested in many companies, involving film and television, cultural and creative industries, games and other industries. In October 2015, Huayi Brothers acquired 70% of the equity of Zhejiang Dongyang Haohan Film and Television Co., Ltd., which was established for only one day for 756 million yuan. In November of the same year, Huayi acquired Dongyang Mela, a film and television company under Feng Xiaogang , for a high premium of 1.05 billion yuan. At that time, Dongyang Mela's total assets were only 13,600 yuan. Also in November, Huayi Brothers spent another 1.9 billion to acquire 20% of the equity of the game company Hero Entertainment, which was also established for less than a year.
2018 third quarter report shows that the above investments have accumulated a total of 3.06 billion yuan for the company. When money was needed, Huayi Brothers was revealed to have no money.
In January this year, Huayi Brothers was exposed that a 2.2 billion medium-term note in 2015 was about to expire. In order to repay the money, Huayi Brothers successively applied for a total of 2.5 billion yuan of comprehensive credit from China Merchants Bank , CITIC Bank, Ping An Bank , Zhejiang Commercial Bank, and Minsheng Bank , and borrowed 700 million yuan from Alibaba Pictures. Afterwards, the media revealed that Wang Zhongjun and Wang Zhonglei and pledged almost all of their shares in order to obtain these two sums of money.
Wang Zhongjun himself also noticed his big moves. "A drama costing hundreds of millions of dollars can be filmed in just a few sentences, "I'll be generous when I shoot the drama." "According to the subsequent recollection of the founder of Hero Entertainment, Yingshuling , he only asked Wang Zhongjun for 1 billion yuan at the beginning. But Wang Zhongjun said without hesitation: "I will give you 2 billion, and the executives will also cash out. ”
In addition to spending money well, Wang Zhongjun is often criticized by the outside world for being too lazy and ignoring the company's affairs.Jack Ma once publicly commented that Wang Zhongjun was the lazy CEO. He slept until 11 o'clock every day and did not care about the company's affairs. Jack Ma said that he would not invest in such a person no matter how much money he has.
2
Feng Xiaogang "dependence"
Huayi Brothers' dismal performance is partly attributed to asset impairment, including goodwill. It is worth mentioning that the operator of "Mobile Phone 2" and Feng Xiaogang's company Dongyang Meila are also on the impairment list. Given that Dongyang Mela is still in the betting period, this also means that Feng Xiaogang may face performance compensation.
Regarding whether Dongyang Mela successfully fulfilled its performance commitment, Huayi Brothers told reporters of the Economic News that Dongyang Mela's performance will be disclosed when releasing the 2018 annual report, and the relevant data shall be subject to the announcement.
In 2015, Huayi Brothers acquired 70% of the shares of Dongyang Mela held by Feng Xiaogang and Lu Guoqiang for a total of 1.05 billion yuan. At that time, Dongyang Mela was established for only 2 months and was held by Feng Xiaogang 99%.
The cooperation between Huayi Brothers and Feng Xiaogang can be traced back to twenty years ago.
1998 and 1999, Huayi Brothers invested in three movies: " The Devils Come " by Jiang Wen , Feng Xiaogang's " Endless " and Chen Kaige's " Jing Ke Assassinate the King of Qin ". However, due to the sensitive subject matter, "The Devils Are Coming" was not released, and "Jing Ke Assassination of Qin King" lost the box office, only "The Endless"'s 33 million box office brought profits to Huayi Brothers.
After testing the waters of three films, Huayi Brothers finally found Feng Xiaogang's money tree and began to work well in the film and television industry, which caused "Feng Xiaogang's dependence".
Wang Zhongjun did not hide the dependence on Feng Xiaogang. He told the media in 2014: "When it comes to setbacks, Feng Xiaogang's first contract expired and he left Huayi Brothers for a year. Because I rely on Feng Xiaogang."
How important is Feng Xiaogang to Huayi Brothers? It can be seen from a description of Huayi Brothers' prospectus: "Film business, Feng Xiaogang Studio produced two films, " assembly number " and " If You Are the One " during the reporting period. These two films achieved a total box office share income of 188.965 million yuan during the reporting period, accounting for about 40% of the issuer's film business revenue and total operating income during the reporting period. 18%, the company has a certain dependence on Feng Xiaogang's team. "
A company relies heavily on a director's film output obviously has great risks. It’s fateful, even though I know the problem, I can’t turn the world around.
Since 1999, Huayi Brothers and Feng Xiaogang have collaborated on 14 movies.
From 1999 to 2010, Feng Xiaogang and Huayi Brothers combined the two swords together. As long as their works are released, they will always have their place in the top three box offices in the mainland. Among them are " No Thieves in the World " and "Assembly".
Data source: Movie box office database
Along with Feng Xiaogang's golden age, on October 30, 2009, Huayi Brothers' halo of "China's No. 1 entertainment stock" above his head, landed on the GEM.
This day was undoubtedly the highlight of Huayi Brothers. The stock price rose from the issue price of 28.58 yuan to 91.80 yuan, and then closed at 70.81 yuan, with a closing increase of 147%. The instant doubled stock price of
not only caused Wang Zhongjun and Wang Zhonglei to soar billions in value, but Feng Xiaogang also realized financial freedom at once. Feng Xiaogang once expressed his excitement on the day of his listing, "I will work in this company to the end, and I will work with Wang Zhongjun to the end."
will be reversed if everything is extreme. In 2010, Feng Xiaogang's creation reached its peak. "Tangshan Earthquake" and "If You Are the One 2" were released at the same time this year, and achieved good results in second and fourth place at the box office. Since then, Feng's movies have begun to take a sharp turn.
First, "1942" was defeated by Feng Xiaogang's high expectations, and then "Private Customization" was scolded for being scolded.
helpless Feng Xiaogang started the "circular" attempt in the movie picture, but after Zhang Yimou's "Qiu Ju's Sue", the new era does not seem to need a " I'm Not Pan Jinlian" to imitate the pen.In 2016, although Feng Xiaogang personally played Wang Sicong for the box office, "I Am Not Pan Jinlian" ranked 30th with a box office of 479 million yuan, while the box office champion "Mermaid" that year's box office was as high as 3.39 billion yuan.
From "Endless" in 1999 to "I Am Not Pan Jinlian" in 2016, from comedy themes to real attention. Unexpectedly, Feng Xiaogang, a director who relied on the comedy route, lost to "The Mermaid", which also has comedy themes.
Regarding the decline of Feng Xiaogang's movies, Fudan University professor Gu Xiaoming once commented on the decline of Feng Xiaogang's history department: the Feng Xiaogang-style comedy and Wang Shuo -style jokes we were obsessed with in the last period, that era has passed. Judging from today's view of Feng Xiaogang's movies, their value and functions have been exhausted, and their level is actually not enough. The occurrence of this incident today (Feng Xiaogang scolded the film critic for "Private Customization") is a major cultural event in which Chinese films and Chinese filmmakers entered a new realm like cicadas shed their skins. Feng Xiaogang began to feel the very great pressure of the times, and at this time he lost his composure. Feng Xiaogang must be very sensitive and knows that this era is leaving him. In this sense, Feng Xiaogang and Wang Shuo have no more comedy films that we are shooting, the scenes they play, and many of these humorous scenes on the Internet.
After Feng Xiaogang began to gradually "fail", although Huayi Brothers participated in the film business that also entered the top three such hits such as "The Twelve Zodiac Signs", "Journey to the West to Suppress the Demons" and "Looking for the Dragon", Huayi Brothers' box office appeal is no longer as good as before. In 2014 and 2016, there was even an embarrassing situation where Huayi Brothers did not have the figure among the top ten.
Data source: Movie Box Office Database
Finish Xiaogang's end of the glorious era of the movie, with a clear response in Huayi Brothers' financial report in 2011. At that time, Huayi Brothers' film business revenue fell by 67% year-on-year, which further dragged down Huayi Brothers' overall revenue decreased by 16% year-on-year.
box office, in 2014, Huayi Brothers finally handed over the box office champion's scepter to Light Media, and he ranked fourth after Bona Film and LeTV Pictures.
3
"Circle" is unreliable, it can only benefit
In addition to Feng Xiaogang, the development of Huayi Brothers is also inseparable from another heavyweight. That is Wang Jinghua , which was in charge of Huayi artist brokerage business back then.
In 2000, Wang Jinghua joined Huayi Brothers with artist resources such as Chen Daoming, Carina Lau, , Li Bingbing, Ren Quan , Fan Bingbing and other artist resources. It is precisely thanks to the resources in Wang Jinghua that at its peak, Huayi Brothers once had more than half of the artist resources in the Chinese film and television industry. At that time, Huayi Brothers could be called a real "film and television wealthy family".
Unexpectedly, in 2005, Wang Jinghua terminated the contract with Huayi Brothers and brought dozens of artists including Chen Daoming and Carina Lau to Orange Entertainment.
Wang Jinghua
Wang Zhongjun once said stubbornly: "Huayi Company is missing anyone!" Although he is not willing to be outdone, Huayi Brothers' artist brokerage business is inevitably "harmful" because of this.
Then, Huayi Brothers, who had "get a lesson", signed an artist again, gradually realizing the industrialization of artist brokers and making a quick comeback. In 2009, Huayi Brothers acquired Zhongqinlongde, an artist brokerage company, and then transferred Lu Yi, Meng Guangmei, Huang Weide, and other companies to Huayi Brothers.
Artist Brokerage Business once occupied an important part of Huayi Brothers' revenue and profits. Taking 2008 as an example, the net profit of Times Brokerage Company, a subsidiary of Huayi Brothers, was 31.38 million yuan, accounting for 46% of Huayi Brothers' net profit that year 68.06 million yuan, but the revenue in this area only accounts for 17% of Huayi Brothers' overall revenue.
17% revenue contributed 46% of profits, and the importance of artist brokerage business to Huayi Brothers is self-evident.
is used to bind these artists, Huayi Brothers gave different shares to the artists, among which Feng Xiaogang ranked 10th among Huayi Brothers shareholders with 2.88%. In addition, the feast of Huayi Brothers' listing capital include Zhang Jizhong , Li Bingbing, Ren Quan, Luo Haiqiong , Huang Xiaoming , Zhang Hanyu , Hu Ke , Chen Sicheng and others.
However, after Huayi Brothers went public, all walks of life cashed out and left the scene, among which Feng Xiaogang cashed out more than 200 million yuan, and Xu Fan said that he paid more than 40 million yuan in tax alone.
In 2009, Huayi Brothers' artist brokerage business reached another level, from 17% of total revenue in 2008 to 20%. It has risen and fallen in the following years, but overall it has remained above 10%, until it fell to 8% in 2013. By 2014, the revenue from this business was no longer displayed in Huayi Brothers' financial report.
Behind the decline of artist brokerage business is the transformation of traditional artist brokerage business model.
Around 2010, as first-line artists such as Ziyi, , Fan Bingbing, Li Bingbing, Zhou Xun and other first-line artists set up independent studios, artists gradually got rid of the constraints of "sharing" of agency companies and gradually gained autonomy.
In addition, in the new media context, online variety shows, short videos, and live broadcast platforms have become new paths for artists to communicate. The changes in traditional communication methods and media environment have changed the way artists operate and promote.
Under the new situation, in order to bind artists with top resources, Huayi Brothers had to spend a lot of money to acquire artist companies. So in 2013, Huayi Brothers spent more than 200 million to acquire Changsheng, Zhejiang, which owns Zhang Guoli, and in 2015, it spent 1.05 billion yuan to acquire Feng Xiaogang Dongyang Meila shares and more than 700 million yuan to acquire Dongyang Haohan, which owns Li Chen, Feng Shaofeng, Angelababy, Zheng Kai, , Du Chun, and Chen He.
Although Huayi Brothers' merger and acquisition can make artists use it to a certain extent, the promised profits that follow are difficult to complete. Huayi Brothers is facing a goodwill crisis of up to tens of billions of yuan, and it is like a time bomb tied to Huayi.
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