Chapter 12: You're Daydreaming
Translator: Henyee Translations Editor: Henyee Translations
In the office he rented in the Senhai Building, Meng Lang met a group of toy manufacturer representatives from all over the country.
Needless to say, they had gathered here for the yo-yo, the toy that had shot to fame in the toy market!
From the very beginning, Meng Lang had taken the negotiation of authorization under firm control.
Based on the standard retail price, Pengda Pictures would take 30% of their sales revenue. The sales proceeds would be deducted by 1% if the approved sales exceeded 1 million pieces. Those who reached annual sales to dealers of 10 million would become strategic partners of Pengda Pictures and enjoy a special sales proceeds rate of 25%!
Needless to say, strict terms like this soon received unanimous objection from other toy manufacturers.
"30% is way too high! We won't be able to afford it even if it's reduced to 25%!"
A toy manufacturer from Ice City said in a baffled tone, "Mr. Meng, your father makes toys himself and I think you have some knowledge about our line of work. You know perfectly well that there's no way we'll agree to those terms…"
The sales proceeds on the toy figurine Kitaro were 20% and that enabled U-Fun Anime, the copyright owner, to make much more than Pengda Toy Factory.
And Pengda Pictures was now asking for 30%! If these toy manufacturers really agreed to those terms, they would practically work for Pengda Pictures for nothing. Pengda Pictures would end up taking all the money and they would earn nothing from the licensing.
But of course, all negotiations started off like this.
One side would ask for an exorbitant price, then they would slowly bring it down.
Meng Lang's bottom line was 25%. It would be wonderful if he could get a higher percentage, but unless the management teams of the other manufacturers became idiots altogether, 25% would be the highest percentage they would accept.
After all, the profit of a single yo-yo wouldn't exceed 20 yuan and that was the net profit excluding costs, taxes, and all other miscellaneous expenses.
With 30% sales proceeds, taking an ordinary edition Power Silver retailed at 50 yuan for example, Pengda Pictures would earn 15 yuan for each yo-yo sold for doing nothing.
And the net profit of that 50-yuan yo-yo was only between 18 and 20 yuan!
As for why the intellectual property owner asked for sales proceeds instead of net profit proceeds, it had something to do with creative accounting and bad debts.
All in all, if a copyright owner didn't want to get scammed, the proceeds of licensing would usually be based on sales. Hardly any copyright owners were reckless enough to ask for proceeds on net profit.
The negotiation lasted for the entire afternoon and Meng Lang only relented in the evening, agreeing to reduce the initial percentage from 30% to 27%.
Of course, the toy manufacturers still weren't satisfied with that figure.
Hence, they agreed to pick up where they left off tomorrow and call it a day.
After sending the deputies of the toy manufacturers on their way, Meng Lang threw himself into a rattan chair he just bought from the market and massaged his throbbing eyes.
"I could really use an extra pair of hands!" He mumbled.
As the respected president of Pengda Pictures, he didn't have a single person working for him and had to take care of something as petty as a licensing negotiation himself!
This wouldn't do!
It was time to start recruiting more people!
Although Pengda Pictures was a newly-found company, it at least had a successful work already, not to mention its "prophetic" president. The future of the company was very promising.
A company like this could at least attract some willing, hard-working employees, if not top investors.
As soon as the recruitment idea popped in his head, Meng Lang called Meng Minghui, the chairman of his "parent company" and the strategic investor of Pengda Pictures.
"Dad! Do we have any more vacant houses?"
Meng Minghui's unrestrained gasp came from the other end.
"Who do you take me for? A real estate speculator? The one we're living in is the only house we have now!"
"Forget about it, then…"
Since there was no more property to sell, Meng Lang had to find a way to indirectly collect some money from Pengda Toy Factory.
"How much money does our factory have on paper?" asked Meng Lang.
"What are you up to?"
Meng Minghui was on guard and warned his son, "I'm telling you. Don't try anything illegal! We can't mix the factory's money with our own! It's against the law!"
As the sole shareholder of the factory, Meng Minghui could see it as his private property, but without legal procedures, he couldn't use any of the money in the factory's account.
That was why when Meng Lang went to Meng Minghui for the initial investment on Blazing Teens, Meng Minghui would rather sell his house than touch the factory's cash flow.
There was a distinction between what was the factory's and what was private.
Meng Minghui knew he had to be scrupulous in separating public from private interests.
Meng Lang realized that his father had misunderstood him and explained immediately, "It's not what you think! I was going to say that if our factory had some free cash on hand, it could be invested in Pengda Pictures. I'll give some of my shares to the factory! It'll be a profitable deal…"
So, he was asking for more money after all!
Meng Minghui was baffled. He then asked, "You have a shell company. What do you need that money for?"
"For a new project, of course!"
Ever since he relieved his life as a director during the shooting of Blazing Teens, Meng Lang had been feeling like a drug addict in need of his next high. He wouldn't settle down unless he had a new project.
Shooting Blazing Teens had not only reminded him of the excitement in making cliché TV shows, but it had also saved his family business in passing, not to mention the fact that his old man had made a fortune out of it!
Judging by how well the yo-yos were selling, the factory had to have quite a lot of cash lying around.
With the yo-yo as their long-lasting cash cow, as long as Meng Minghui didn't do something stupid, Pengda Toy Factory would only keep doing better.
With the money his father made from making yo-yos and the future profit he was going to earn, even if Meng Lang screwed up on one project now, it wouldn't make much of an impact.
Once he was no longer worried about sleeping on the street, Meng Lang suddenly became bold.
He wanted to make a major motion picture!
He was going to shoot "Inception"!
The other day, he took some time and transcribed the script of Inception. He was going to hand it to his father when the time was right, so that he could persuade his old man to invest the factory's cash into this project.
Blazing Teens was a compromise Meng Lang had to make when he started from scratch. Once he had money, he didn't want to go on entertaining kids with feature shows.
He wanted the big screen!
He had been longing to make the big screen and major motion pictures with special effects.
Now that he had the money, the idea, and the original movies to work on, it was almost impossible that the box office of his movies would perform poorly.
Since he had the idea, he acted on it.
However, when he handed the script of Inception to Meng Minghui with great excitement, his father gave him a sincere smack on the back of the head.
"You must be daydreaming."
Meng Minghui glanced at his silly son, who had shrunk back. Without any hesitation, Meng Minghui tossed the script into the bin, cursing as he did so. "An investment of hundreds of millions? In US dollars? In a movie? Have you forgotten who you are? Is that something you can manage?"
After that, Meng Minghui took out two stacks of crumpled papers from his desk drawer, as if he was doing a magic trick. He then put them on the desk.
"You want to shoot something new? Pick one from these two!"
Meng Lang looked at them and was dumbfounded.
Weren't those the scripts of Balala the Fairies and Explosive Boys? He had hidden them in his bedside table!
-- Gift
received