Chapter 667

"It's over!" Lao Wang Zong sighed, having watched a spectacular drama unfold.

Huayi will never recover.

This incident didn't just strike Huayi—it struck the entire entertainment industry and film and television sector.

Even his Wanda had to respond to this storm.

Right now, the entire entertainment industry, including film and television production, is a wasteland of wailing, with catastrophic losses: Tangde, Huanrui, Yingji Media, and other film companies have collapsed one after another.

The wave of bankruptcies among small and medium-sized film companies continues to spread; at this moment, over three thousand film companies and studios have been dissolved or had their licenses revoked.

This is because regulations now require producers to bear joint liability for actors' tax evasion—if a drama's lead actor is caught evading taxes, the production company faces fines exceeding a hundred million.

Very few film companies can afford this, so they can only choose to dissolve and flee.

Three thousand is just the beginning; the wave of closures keeps spreading, because some are still seeking funding, others are trying to hold on.

BAT, major capital groups, and even E-Factory have been flooded with film companies and producers begging for investment.

But now no one dares invest; everyone is retreating—investing in them clearly just means funding their tax payments and fines; even if you have money, you wait until this storm passes.

This has caused many film projects to lose their financing.

Even Alibaba is plagued with troubles; this incident caused Alibaba's stock price on the U. S. market to drop 8%, simply because its invested film companies, actors, and productions have all been hit.

Because Alibaba also bears joint liability, Youku's funds have tightened, and advertising revenue has plummeted due to the negative public opinion sparked by the Yin-Yang Contract scandal.

Especially luxury and maternal-infant advertisers have drastically cut their ad spending.

This has been a heavy blow to Alibaba's major entertainment division, severely draining its funds and forcing it into a defensive posture.

With Alibaba retreating, other small and medium-sized film companies are even more helpless—whether the "exclusive choice" policy can still be enforced is uncertain.

E-Factory Video is better off; it doesn't have Youku's long history—it's only been around for a few years, and for years it was just buying content.

Even its investment in production only began in the past two years, so while it's affected, the impact isn't as severe as Alibaba's.

iQIYI is also suffering terribly, but with Baidu holding it up, it's still holding on.

Only the top players can withstand this; others either collapse, have clean books, or are too new to be significantly affected.

Huayi is beyond doubt—already declared bankrupt; the two Wangs are selling off assets in bulk.

Big Wang Zong's collection includes Picasso's painting "Nude, Green Leaves and Bust," worth about 200 million; and Van Gogh's "Daisies and Poppies," valued at 185 million, both seeking buyers.

Moreover, subsidiary equity is being massively divested: Hero Interactive, Maizuo, Hainan Guanlan, Tianjin Real Scene Entertainment, and real-scene entertainment in Suzhou, Changsha, and elsewhere.

Additionally, cinemas and film rights in Chongqing, Hefei, and future revenue streams are all being used to repay debts.

But this is just drinking poison to quench thirst; Huayi will forever carry a crushing debt burden—put it this way, it can't even afford to sue Warner now.

These two brothers have pledged 100% of their equity, owing a staggering 9 billion—how could they possibly repay it?

The stock market has collapsed entirely, plummeting from a peak of nearly 90 billion to just around 15 billion in barely two years.

And it's exactly the day the betting agreement expires—here, they must repay debts, pay back taxes, and pay fines—minimum 1 billion, another massive hole.

Of course, it's not urgent—investigate slowly and pay later!

Originally, debt was only around 6 billion; they borrowed another 3.3 billion from Zhejiang merchants and Jack Ma, totaling 9 billion; now, after all this, Huayi has over 10 billion in debt.

Of course, it's not that extreme—they've repaid 1 or 2 billion already; if they didn't, financial institutions wouldn't let it go, but if they sell many assets, they might still shrink the debt to a few billion and pay it off slowly.

Jack Ma demands the two brothers' wives repay the debt.

At this moment, Ma Baba suddenly didn't feel like Ma Baba anymore—he wasn't appealing anymore.

Huayi's complete collapse is not only heartbreaking, but also deepens everyone's reverence for the Principal.

Even if the Principal sacrificed the entire entertainment industry to bring down Huayi, no one dares speak against him—they can only silently endure.

The two brothers, Huayi's senior management, and Feng Kuzi sat in an office, scattered here and there, sitting or standing, all with gloomy faces; the atmosphere was oppressive.

"Sell everything you can—debts must still be paid, no matter how many years it takes," Big Wang Zong said mournfully.

If they don't pay, they'll lose even Huayi itself—not just money, but the company too; that would be worse. At least creditors still let them operate.

Even if they didn't let them operate, what could they do? Even selling Huayi wouldn't fetch much.

Little Wang Zong said nothing, stood up angrily, and walked out.

"Where are you going?" Big Wang Zong shouted.

But Little Wang Zong didn't answer—he yanked open the door and slammed it shut with a loud "Bang!"—the sound exploded, jolting everyone in the room awake.

Everyone present was stunned, fearing he might do something desperate, and immediately rose to chase after him.

The scope of this Yin-Yang Contract scandal is unprecedented—even South Korea is in turmoil; some believe banning their Song is their biggest mistake, and Daehan will retaliate.

But no one cares about their opinions—they're just yapping like dogs.

This incident has also heavily impacted E-Factory, as E-Factory must audit all films and TV shows produced since 2010 for tax evasion by actors and artists.

As long as the money is paid—500 million to 1 billion—paying it over the next two years is enough.

Fang Hong doesn't know whether E-Factory evaded taxes, because many things are simply untraceable; the early years' productions like "Those Years" and "Lost in Love 33 Days" were all chaotic.

Back then, they didn't even have a finance team—just finish filming and move on; who cared?

Anyway, just pay up and be done with it—no one bothers to check; even meals and drinks are counted as expenses, considered a contribution to the state.

Even if they're fully investigated, they don't have to pay immediately—just settle everything within two years; that's the grace period granted by the authorities.

This has given many film producers a sigh of relief.

As for the industry's damage from this entertainment crisis, Fang Hong doesn't care—as long as the market remains, it's fine.

The authorities share this view, so they don't care either.

As long as the market and audiences remain, the industry won't weaken—it will simply return to a healthy development path.

At the Yutu Film and Television Base, everything is white—a thick layer of snow covers rooftops and ground.

Around the statue at the entrance of the Yutu Film and Television Base, a crowd has gathered, each one furious, seemingly outraged.

Chen Zhixi, accompanied by a group of senior executives, stands facing them; Lu Dabo and his men block the entrance, preventing entry.

"Make the Principal come out!" someone shouts, raising a hand.

"Let's talk this through properly. What's the point of making a scene like this? This matter has nothing to do with us." Chen Zhixi faced the group of people.

"Who says it has nothing to do with you? You dare to do it but not admit it, right? We won't talk to you. Get the Principal out here. Today we demand an answer." A middle-aged woman wearing glasses shouted emotionally.

"President Zhong, if you keep this up, I'm calling the police." Chen Zhixi said.

"Go ahead and report, I'll watch you do it!"

"Right, go ahead. Report us. We'll still come back tomorrow."

"We're not leaving until we see the Principal!"

The crowd immediately erupted into noisy chatter.

This left Chen Zhixi quite helpless. She actually knew many of these people—they were all CEO-level figures, so it was hard to be too harsh.

Just then, a Porsche sedan drove over from afar. The car approached from a distance, leaving tire tracks, and stopped behind them.

Lu Dabo knew that was the Principal's car. With quick reflexes, he waved his hand, and immediately a squad of men in sharp suits emerged from the film and television base, crunching through the snow with a "creak, creak," surrounding the Porsche.

Mainly to prevent these uncouth people from assassinating the Principal.

Such a grand display and commotion suddenly made everyone present stunned, so they all turned their heads.

They saw the Principal step out of the car wearing a black woolen coat with great poise, and also led Liu Tianxian out.

Liu Tianxian was also wearing a fluffy fur coat. The fur coat was very wide, very thick, and very dignified, wrapping her entire body, almost dragging on the ground.

Wrapped up like this, you couldn't tell at all that her figure looked like she was pregnant.

Her face was still fair and white, her hair parted down the middle and combed flat against her scalp, and when she smiled, she was still as elegant and relaxed as always.

"Why are there so many people?" she asked in surprise.

She had originally planned to come out today to relieve her boredom, but what a coincidence to run into so many people.

Those people saw the Principal and crowded around. The leaders among them were middle-aged people with a certain air about them.

"Principal, you have to give us an answer."

"What's the situation?" Fang Hong still didn't understand the matter; he just thought they looked familiar.

Chen Zhixi parted the crowd and stepped forward to introduce: "President Fang, President Wu of Tangde Film and Television, President Zhong of Huanrui Film and Television, and dozens of CEOs from Xinli Film and Television."

"Oh, so you're all fellow CEOs. My respect, my respect." Fang Hong was polite.

Liu Tianxian stood beside him like a noble lady, scanning these people one by one.

"Principal, don't play these games with us. If you want to fight Huayi, fight them. But you've dragged us all down. We didn't provoke you. You have to give us an answer today." Huanrui CEO Zhong Junyan said.

She was the most wronged one. Having been struck down twice in a row, her company collapsed. Unable to swallow the anger, she had come all the way from Jiangzhe.

And the people around her were all glaring with round eyes—CEOs of film and television companies that had collapsed, already at the end of their rope. The capital tide had receded, and no one was willing to invest in them.

"What answer do you want? Send me to the police station, how about that?" Fang Hong said directly.

These words immediately silenced everyone present.

What answer they wanted, they actually hadn't decided yet. They had just rushed over in a fit of impulse.

"You crashed the entire entertainment industry. Sending you to the police station would be letting you off easy." Tangde Film and Television's Wu Hongliang said.

"Then go ahead and send me." Fang Hong didn't give him any face at all, with an attitude that said "let's see what you can do to me."

Weak, can't handle a blow, and you think you're in the right?

"Principal, we used to have a cooperative relationship. After what you've done, how are we supposed to survive?" someone accused.

"That's right! I now owe a mountain of debt. The creditors block my door every day." Someone wiped away tears, barely holding their emotions together.

"I borrowed my parents' money, and now my funds are completely cut off." Another person wept.

The others were also crying and sobbing, their emotions very sorrowful.

Wu Hongliang and Zhong Junyan were very indignant. They knew there was no way to do anything to the Principal. He had merely exposed the filth of this industry; he hadn't done anything illegal. How could he possibly be sanctioned?

Whether it's gambling agreements, school grass, or "Yin-Yang Contracts," these are all the filth of this industry.

And their breakdown was understandable. There was a director who, after a dispute with an investor, committed suicide.

It can be said that capital has a huge influence on this industry.

Liu Tianxian looked at these people and also felt they were pitiful, with a touch of maternal compassion stirring.

After all, she was about to become a mother.

"I can certainly understand how you feel. I had originally planned that since we're all in the same industry, I'd put up ten billion so we could all get through this difficult time together. But you suddenly coming here to pick a fight with me makes me very unhappy." Fang Hong said displeased.

Hearing this, people were startled and asked in disbelief: "Really?"

"Of course it's true. Although this matter has nothing to do with me, as a member of the film and television profession, I have an obligation to ensure the continued prosperity of the film and television industry and the continued prosperity of the entertainment circle." The more Fang Hong spoke, the louder his voice became, clearly wanting everyone to hear.

He also made it clear that the entertainment circle's turmoil had nothing to do with him.

This made everyone present exchange glances, their eyes filled with surprise and confusion. Why was the Principal so good?

Even Zhong Junyan asked somewhat surprised: "Principal, are you really going to put up ten billion to save us?"

"Let me make this clear first. I don't owe you anything. Who I save depends on my mood, and also on your attitude. You understand?" Fang Hong said.

In other words, if he's unhappy, he won't save them.

"Principal, we're willing to throw in our lot with you. As long as you're willing to save our company, from now on our company will follow your lead." A curly-haired woman with no bottom line immediately backed down, submitting to the enemy as a father.

"Alright, which company are you from?" Fang Hong looked at this person, who had quite an air about her.

Who he saved didn't depend on the company's operating situation, only on attitude. He looked at who was willing to call him "daddy," and saved them!

And his purpose was very simple: to bottom-fish the entire entertainment circle. Wasn't it a choice? Half of the entertainment circle's film and television producers would be his. Let's see how you choose.

"I'm Wang Ziwen, president of Xinli. Our company accounts are currently tight on funds." Wang Ziwen hurriedly said, as if she saw hope.

Not the actress Wang Ziwen—the two are not the same person, just sharing the same name.

Their company was the one involved in the tax audit triggered by the exorbitant pay for "Tiger Mom Cat Dad" and "The Imperial Doctress," causing their capital chain to tighten.

Xinli now could only be considered a second-tier film and television company.

"Good. Chen Zhixi, write down this company's name." Fang Hong agreed immediately.

(End of this chapter)