Two and Half Men - Reborn as Jake Harper
Chapter 180: JD Company 2001 Report
Five people are now gathered for the year-end closing of JD Company: Pepper, Anthony, Harvey, Grandma, and me.
"Now we're closing the accounts of our company, JD Company and its subsidiaries," said Pepper.
"First, the movies. We released a total of 6 films this year, with the following worldwide gross revenue: Paranormal Activity, $299 million; My Big Fat Greek Wedding, $401 million; Brokeback Mountain, $178 million; Lost in Translation, $165 million; The Conjuring, $320 million; and Annabelle, $125 million.
That gives us a total of $1.48 billion in gross revenue. As the total worldwide box office in 2001 is closing at an estimated $16.5 billion, we captured approximately 9% of the movie market. Remember that Annabelle is still in theaters and may bring in another $120 million."
"In addition, we sold $350 million worth of DVDs and VHS tapes from four of the films. The Conjuring and Annabelle are yet to be released for home media.
We already have the 2002 lineup scheduled: Chicago and Saw in January, The Pianist in February, Get Out and Passion of the Christ in March, Sweet Home Alabama in May, Mystic River in June, Million Dollar Baby in July, Bruce Almighty in August, Mean Girls in September, Clueless in October, The Nun for Halloween, Love Actually in November
and we'll likely close December with Freaky Friday, Elf, and Rush Hour. 16 movies. That wraps up the movie section."
"As for the music division of JDS Company, we currently have eleven artists and bands: Marshmello, Rihanna, Avril Lavigne, Jason Mraz, Evanescence, Justin Timberlake, Maroon 5, Ashanti, Britney Spears, Norah Jones, and 50 Cent.
Rihanna is under a pre-contract as she's only thirteen years old. Most of them are rising stars, with the clear leaders being Marshmello and Britney Spears, who are currently the two most famous singers out there."
"Regarding our TV series, we're co-producing with other networks on House, Supernatural, America's Got Talent, Wizards of Waverly Place, and iCarly. Our fully own productions include Lost and Desperate Housewives. That's all from my side," Pepper concluded.
Anthony took over. "We finalized the deal with Robert Kraft at the end of November—$510 million for the team plus $180 million in assumed debt, and we needed to inject another $200 million to finish the stadium. We finally received formal approval from the NFL owners and the league commissioner. The New England Patriots now officially belong to JD Company."
"Woohoo, go Patriots!" I cheered. (Looks like Kraft was in need of money—for some reason, or he wouldn't have been so willing to sell the Patriots.)
Anthony smiled and continued, "Excluding the short position in WorldCom, which I'll get to shortly, we're closing the year with $2 billion in net cash, already accounting for all liabilities.
We have $550 million in stock investments, $750 million in fixed assets like properties and equipment, 100% ownership of the Patriots, valued at the $510 million we paid, and we own 90% of Monster Company, currently valued at $225 million for our share.
Our two major investments through the Jacob Fund are Amazon, where we own 30% of the company—currently valued at $1.2 billion—and NetEase, still valued at our purchase price of $40 million for 40% of the company. In total, our net equity amounts to $5.27 billion.
This is after the generous bonuses of $50 million for me and Harvey," he added with a blissful grin.
Then Anthony finished, "Finally, we have the short position in WorldCom: 900 million shares at an average price of $15.5—nearly $14 billion in short position. I had to contact two major banks and sell nonstop for an entire month to build this position. It represents over 30% shares of WorldCom's entire company."
Harvey stepped in. "I worked with Anthony and some of our contacts. We're already anticipating that the SEC might come with questions if WorldCom collapses like Enron. We're ready and will issue preemptive legal notices to prevent any media leaks."
"Ah, almost forgot — we are closing the deal with Netflix. They want to be valued at $100 million, twice what they offered Blockbuster last year. We would own 80% of the company, with the remaining 20% staying with the founders Reed Hastings and Marc Randolph. Reed would remain as CEO."
"Very good," I nodded.
I'm not particularly worried or overly eager to acquire Netflix. Reed would be a great addition under our wing, but if they don't accept, they'll hardly find success like in my past life.
There's no way they'll secure streaming rights (IPs) from the major studios that are under our watch. We'll get those first. Not only do we have more money, but we also have several films to use as leverage—whether for co-productions or distribution deals.
Then I said, "Pepper, I had suggested MGM or Miramax. But if WorldCom turns out to be a fraud like Enron, we'll be sitting on $10.5 billion in net cash (8.5 billion profit for us, 5.3 billion for our good fellas — Uncle Sam's thieves): 8.5 + 2 (we already have).
Why don't we think bigger—like one of the Big Six? What about Universal or Paramount?"
Everyone's eyes widened.
"That's craziness..." murmured Pepper. "But if we have $10.5 billion, it's conceivable. Paramount would be difficult, Redstone wouldn't agree. Universal might be worth around $14 billion total, and Vivendi is drowning in debt—they might not oppose selling it."
Obviously, I'd prefer to go all in on Amazon and Apple, but I don't think that's viable.
Anthony and Harvey left shortly after, their work for the day done
Only Pepper, Grandma, and I stayed in the room.
"Now, it's my time," I said. "Harper Fund closed the year with a total of $271 million in assets, not counting the 10% share in JD Company. The breakdown is: $131 million under my name, $55 million for Charlie, $10 million each for Alan and Judith, $45 million for Evelyn, and $19.5 million for Pepper."
"The 10% share in JD Company (in Harper Fund) is permanently divided as follows: 4% for me, 2% for Charlie, 0.5% each for Alan and Judith, 2% for Evelyn, and 1% for Pepper.
So, JD is owned: 79% for me, 2% for Charlie, 0.5% each for Alan and Judith, 7% for Evelyn, and 11% for Pepper."
I concluded, "If we consider the company valued at $5.27 billion (based on net equity), the total net worth of each member would be: $160.6 million for Charlie, $36.4 million each for Alan and Judith, $414 million for Evelyn, $600 million for Pepper, and finally, $4.3 billion for me."
Pepper put her hand on her face and took a deep breath. "It's not like there's any new information here," she said, "but when you put it into numbers and actually think about it, it is insane."
"Best deal of your life, right? Virginia" Gramma finally said something
"No way, Gramma! The best deal of her life is taking me as her younger brother! I would be the #92 on Forbes list..." I started, but got a bonk in the head
Pepper finalized after bonking me, "Of your ideas, the one we'll be producing with Konami will have a prototype ready by February. The other is already in production, and the first shipment will arrive in late January."
"Noicee!" I exclaimed.
A/N: Already decided: DJ Hero (Konami) and Beats by Mello
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A/N 2: 5.27 billion is just the company's net worth. Valuation can be quite different, especially for a super profitable company like JD (high growth with obscene net margins). It could be based on EBITDA or net income multiples.
In an IPO, the company could easily reach a 10 billion valuation (thanks to all its IPs. The market, however, would be skeptical about whether JD could continue releasing hit after hit).
And no, Jake will never take the company public (much later there will be a chapter explaining part of the company's end goal, and why it would never make sense to go public).
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