Chapter 712: Indeed, There Is Backbone

Even if Fang Hong didn't want to stand his ground on the rent hike incident, he had to; those real estate service providers were just there to mess with him, acting on the connections of Lao Wang Zong and Jack Ma behind the scenes.

But being able to unite these cinema lines could also be considered an unexpected gain.

As for the real estate service providers, these people have no integrity; even if a lease is signed, there are annual escalation clauses.

It is impossible to sign a long-term lease for ten years with fixed rent; that is impossible, it's unthinkable.

There will be room for a rent increase every year.

It's just that this time, those real estate service providers raising the rent is clearly an act of targeting him.

The matter of signing 15-day box office settlement cycles with several major cinema lines has been completed; of course, this is limited to major cinema operators like Hengdian, Dadi, and Jinyi.

Some other cinema lines haven't followed suit; this requires continuous follow-up and cannot be achieved overnight, but with these leading cinema lines taking the lead, it will be much easier to handle the others.

After all, this is a trend; it cannot always be such a slow pace, and failing to adapt to the times only leads to being eliminated.

And with several large cinema lines signing 15-day repayment contracts, the pressure on Tu Piaopiao will be much smaller; even if financial tools are used, it won't be a total package deal.

It can be diversified: the cinema lines return a portion, financial tools package a portion, and then Tu Piaopiao puts up a portion itself.

This makes the finances much healthier; if Tu Piaopiao were to bear it alone, with a scale of tens of billions, the interest generated would be no small amount.

Fang Hong and Lao Wang Zong fighting back and forth in the cinema market is just an undercurrent; apart from those in the industry who have heard of it, the outside world doesn't really know.

Meanwhile, the summer season is still in full swing, with "Big Fish & Begonia" and "Cold War 2" currently leading the pack.

In ten days, the former surpassed 400 million; the latter surpassed 500 million.

The former is a film from Enlight Media that didn't follow the plan to cut off Wanda's film sources from Fang Hong, while the latter is a Yutu Film production that didn't screen at Wanda, yet the box office was still unaffected.

As for other films, only "Bounty Hunters" had a decent box office, reaching over 200 million, while other films didn't do well, with box office figures of only around tens of millions.

This summer season, nearly 90% of Wanda's film sources were cut off in the early stages.

In mid-July, Hairun's "Tik Tok" (a Hairun film) also didn't screen at Wanda cinemas, yet it had a 50 million box office in its first three days.

It wasn't until "Lost in White" was released on July 21st that the market heated up, with a box office of over 400 million in its first four days of release.

Fang Long and Fan Xiaopang are still awesome.

The popularity of this film made the flow of people at the entrances of major cinema lines visibly increase; of course, this does not include Wanda, as their cinemas remained deserted without content.

At the end of the month, "Now You See Me 2" and "League of Gods" were released one after another.

Because "Now You See Me 2" had the lingering popularity of its predecessor, plus the guest appearance of Justin Bieber—the same role as the original Zhou Naicha—it added a touch of mystery to the film.

Platforms like Douyin, Toutiao, and Bilibili were filled with various short videos and information about this film, all driven by Big Data push-style propaganda.

The film earned 110 million at the box office on its opening day, 130 million on the second day, and still had 110 million on the third day.

This film made the major cinema malls very lively, with people coming and going; more people watching movies meant more people shopping, which is very normal.

Looking back at past summer seasons, Wanda used to have a constant flow of people, but this year it wasn't as lively as in previous years.

Apart from those shopping, people watching movies didn't really come here because there were no good films.

Even "League of Gods" was scolded to the heavens by Wangyi, with some even implying: "This 'League of Left' tells the story of using the Sword of Light to shoot into the Fountain of Life."

I don't know what that means, but it certainly wasn't a serious review, and everyone who saw it gave it bad reviews; even the media was full of negative feedback.

They said the film had "confusing logic, awkward acting, and exaggerated Best Special Effects." There were no good reviews at all.

It was terrible, and although the box office wasn't high, it caused a public outcry, and for a time, the buzz was huge.

This caused Xiang Tai to be furious, posting on Weibo: "Organized black Water Army attack!"

She even said she would call the police, but was retorted by Wangyi: "Even if you add up all the Water Army in China, they couldn't write a plot like this."

Even the director shifted the blame to the audience, saying the film was an innovative experiment, benchmarking against Hollywood, and that the audience wasn't used to the new style.

That's just saying the audience doesn't understand it!

The creators and the Xiang family were all collectively shifting blame, while the actors remained collectively silent, refusing to talk about it; even Li Lianjie, who came out to speak, only hinted: "Repaying a favor to the Xiang family!"

Anyway, the film's reputation was ruined within two days of its release, and the box office collapsed before it could even last three days; after that, it was a total avalanche, as the word-of-mouth was too bad.

"Phew, that's a relief!" Fatty Yu was at home, shirtless, patting his chest; he was scared by this film and the overwhelming scolding.

The Peacock Princess, wearing a silk nightgown, wrapped her arms around her husband's neck from behind, looking gentle and expectant, and asked: "What's wrong? What's a relief?"

"It's a relief that 'League of Gods' was taken away by the Principal at the time, otherwise we would have suffered a huge loss," Fatty Yu said with relief.

Based on the current situation, this film is conservatively estimated to have lost at least 300 million; if such a large sum of money were lost, Bona would take a long time to recover, and it would also affect their listing.

It's a good thing it was taken away by the Principal by mistake at the time.

"Why do you say it was the Principal who took it away? The Principal didn't seem to stop you from investing in this film!" the Peacock Princess asked, puzzled.

"You forgot, at that time Alibaba made the film industry choose one of two: either the Principal or me; if there was the Principal, there was no me, and if there was me, there was no Principal. At that time, many film and television companies defected to Alibaba, and the Xiang family didn't want to offend Alibaba, so they left us and chose Alibaba," Fatty Yu recalled.

"Doesn't that save you a huge loss!" the Peacock Princess also remembered.

"Yes, it saved me tens of millions in losses," Fatty Yu said.

The Xiang family's loss was the big one; this film caused the Xiang family's company, "China Star," to slump and withdraw from the production market.

"Wow! If you put it that way, the Principal really has good fortune; not only is he blessed with his own luck, but even after you defected, you had good luck too," the Peacock Princess said in surprise.

"I think so too. Those two brothers from Huayi always say the Principal is the Son of Destiny, and I'm starting to suspect it's true." Fatty Yu has been hearing those two brothers brag about it so much lately that he's starting to believe it.

But looking at the Principal's trajectory over the years, it does seem a bit like that, though he has also suffered many setbacks and survived them.

"How can there be a Son of Destiny? It's nothing more than good luck," the Peacock Princess didn't quite believe it.

She leaned over, grabbed the chopstick, and said: "I think you are the Son of Destiny!"

"..."

Because Fang Hong's plan to cut off film sources had an effect, Lao Wang Zong has also been very depressed lately; he received data from cinemas all over the country, and the flow of people and box office sales in every cinema have declined severely.

The most severe decline was more than 90%, basically a situation with no one there.

Even the shops in Wanda Plaza were affected, and the sales of major stores and restaurants were decreasing significantly.

Cinemas are like this; many people go there first to watch a movie, and after watching, they stroll around. If there is no movie to watch here, they will go elsewhere.

"General Manager Wang, the flow of people in cinemas and plazas across the country has declined significantly. If this continues, it will be unfavorable for us," said Zhang Lin, the General Manager of Wanda.

This person is also one of the board members.

"I know, what's the rush for just a month or two! We're not even at that point yet." Lao Wang Zong appeared full of confidence.

"I just want to remind you that this is not beneficial for the company," Zhang Lin said.

Lao Wang Zong stared at him and said, "Market competition is just like this. If he dares to cut off your film supply today, he'll dare to acquire Wanda tomorrow. If you retreat one step, you'll retreat every step. Don't you even understand this simple logic?"

"I understand!" Zhang Lin's voice dropped a few notches.

The current Lao Wang Zong has absolute control over Wanda, which is not the case later on.

Although he was full of confidence in front of his subordinates, he still felt uncertain inside. After all, he was facing the Principal, and his son's situation was quite troublesome; after Panda went bankrupt, he became a judgment debtor.

If he doesn't pay back the money after a long time, he might face criminal liability, and he cannot use Wanda's money to pay it back; that is not private money.

Recently, his son has been very depressed, not even chasing the girls he loves most, just lying at home every day.

It's just that he doesn't know what the Principal will do, especially regarding this price hike incident.

However, he soon found out. As the August rent hike date approached, after Fang Hong and the cinema chain side reached an agreement, Jade Rabbit fulfilled its promise and notified the commercial management leaders of China Resources, Longfor, New City, Hang Lung, Swire, Vanke, Evergrande, and others.

Of course, the number one General Managers of the major real estate service providers did not come; they all sent their second-in-command or third-in-command instead.

They were dressed in suits and leather shoes, looking down their noses at people, and didn't look down on these people in the film and television circle at all.

The scale of the two fields is vastly different.

"Principal! What do you want with us? It better be something important; our time is very precious," Vanke's Ding Liye said casually.

The others also cast their gazes toward the Principal at the head of the table, with a look of disdain.

Chen Zhixi was right beside Fang Hong, looking at this group of people who judge others by their appearance; these people are all used to being extravagant.

"I won't waste words. Are you serious about raising the rent for my cinemas?" Fang Hong said.

"Yes, many of your cinemas were also acquired. Perhaps you don't know, but it hasn't been raised for so many years. The economic situation now is not what it was a few years ago, so it's time to raise it!" Vanke's Ding Liye said.

"Fine, you can raise it, but the box office share given to you will be used to offset the rent increase," Fang Hong said expressionlessly.

That is to say, however much it is raised, the box office share will be reduced by that much; that is the meaning.

"What are you talking about? Say it again. Are you not clear about the situation? Are you not clear about your status and position?" The Evergrande commercial management General Manager stood up all of a sudden and pointed at Fang Hong.

The others also looked at the Principal with an unhappy expression, as he actually dared to talk to them like this.

"I said I would use the box office share of each cinema to offset the cost of the rent increase," Fang Hong did not show weakness and repeated it directly.

"Heh!"

Vanke's General Manager laughed, and the General Managers from Longfor, New City, and Evergrande who were present also laughed, with a mocking look.

They didn't know where this person got the confidence to talk to them like this. There are many ways for them to make the cinemas under Jade Rabbit unable to operate.

"Principal, are you used to being arrogant, thinking that we are as easy to bully as the film and television circle you bully? Let me tell you, we are definitely raising the rent today. You will pay the box office share whether you want to or not. If you don't pay, don't even think about operating," the Evergrande General Manager knocked on the table, his tone becoming very heavy.

Then he looked at the other General Managers, with appreciation and approval in his eyes; this is what they needed to do, to dampen this person's arrogant spirit.

He really doesn't know the immensity of heaven and earth, to talk to them like this with just a few pennies from the film and television circle.

"Fine, since you all said so, then within the term of the contract, I will pay whatever you raise."

Fang Hong's words made the major commercial management General Managers present laugh. He was so tough at the beginning, but in the end, he still had to concede. They thought he was so awesome, but it was just like that.

They hold absolute advantage; the territory is theirs, so how can these people running cinemas fight them?

Generally, cinemas have long-term contracts, and there is an escalation clause for rent increases during the term, so although their rent increase is unreasonable, it is not without basis.

It's just that the increase was too fierce, completely exceeding the limits of the contract, but who follows the rules in this world? Not many people follow the rules.

During the Black Swan Event, they wouldn't even waive the rent, even though there were policies issued and it was the righteous thing to do.

Even like that, they still made you pay!

Just when they were happy, Fang Hong's next words made their expressions change.

"I will close the stores directly. As long as it's a cinema that raises the rent, I will close them all. I won't operate a single screening room or a single cinema," Fang Hong said.

"What do you mean?" Vanke's General Manager restrained his smile.

"The meaning is very simple. I will pay you whatever you say the increase is. I am a person who follows the rules and is willing to obey the rules, but since I have rented your place and paid the rent, whether I operate or not is my business and has nothing to do with you," Fang Hong turned his body to the side, not looking at them.

With one hand on his waist, he looked very arrogant.

In fact, the meaning of his words was that these people do not follow the rules.

"Are you threatening us?" The Evergrande General Manager narrowed his eyes, catching the drift.

"No, I just don't want to operate anymore, I don't want to make money anymore. I have a lot of money, and I like to leave empty houses there as decorations!" Fang Hong said casually, his tone teasing.

If they don't operate, they won't complete the box office target, and they still won't receive the box office share. The second half of the year is originally the peak period for the box office, so they would just earn a bit of rent, which is equivalent to not earning extra money.

What's fatal is that if no one comes to watch movies, the foot traffic in their shopping malls and commercial streets will also be greatly discounted, and commercial streets can only be empowered by online media through cinemas.

Because when the audience sees a large number of advertisements and a large number of movie promotions, they will come to watch movies and come to consume.

Over time, it will have a great impact on a business district. As time goes by, others will know that the cinema in this place has closed, and they will habitually not come here.

Once people's habits are formed, it is difficult to correct them.

And Fang Hong's meaning is that he wants to occupy the latrine but not do anything; the rent will be paid according to the contract, so you can't pick out any faults.

There is only one such cinema in a business district; closing it is equivalent to leaving a large space vacant, which cannot play the role of driving foot traffic.

There is no need to say how important traffic is; foot traffic is even more important to a business district.

Wanda is an example; the board of directors is about to quarrel with Lao Wang Zong. It not only affects the cinema but the entire ecosystem of the business district.

Some business districts specifically invite cinemas to move in at low prices to attract people for this reason.

"You think we will be afraid of you? At worst, we will pay you the liquidated damages and bring in other cinema chains to move in, kicking you out," Vanke's General Manager also threatened.

The others also stared at the Principal, not feeling intimidated at all!

"Fine! You go ahead and kick me out. Let's see who in this circle dares to occupy the place that I, the Principal, don't occupy," Fang Hong scanned everyone present.

Chen Zhixi also held her head high, appearing full of confidence, not indulging this bunch of people at all.

These words couldn't help but make the commercial management General Managers present look at each other, and there was finally some fluctuation in their hearts.

They knew the Principal had the strength to make any cinema chain afraid to move into the space he vacated, because the Principal controlled the most upstream content.

Once the content is cut off, even the most awesome cinema is useless; Wanda is the best example.

Can you imagine a shopping mall without a cinema?

"The Principal truly has backbone," the Vanke General Manager said.

His tone had already softened; the man had hundreds of cinemas, and although not all cinemas needed to raise prices, closing half of them was enough to make people like them uncomfortable.

Who doesn't want to make money? It wouldn't be good if it affected their own brand; Lao Wang Zong did it for his son, but they didn't have sons.

"My backbone is quite large; even if you haven't encountered it, you should have heard of it," Fang Hong said.

They had indeed heard of it; they often heard how awesome the Principal was, fighting this and that, and even Jack Ma couldn't get the better of him.

Now that they had clashed, it was indeed different.

"By closing your doors like this, the money you lose is not a small amount, is it?" the China Resources General Manager said.

"It doesn't matter how much I lose; at worst, I can take out 2 billion to lose in a year. Although I am not worth a fortune, I can still afford to let hundreds of cinemas sit there gathering dust," Fang Hong said with full confidence.

These words made everyone present fall silent, completely losing the bossy attitude they had just now.

The Principal could lose 2 billion a year, which was equivalent to a one-time loss that could be calculated, but they were different; the longer it went on, the greater the hidden losses, and the longer it lasted, the more disadvantageous it was for their business districts.

Of course, it didn't matter for a short time, but they really couldn't stand it for a long time; real estate is different from other things, as it is inherently highly leveraged.

If they don't collect some rent to get by, they can't go on living; collecting rent is a long-term business, while selling houses is a one-time deal.

Fang Hong braced his hands on the table, leaned forward, and said, "Gentlemen, what do you say? Are we still raising prices?"

"Hehe!" These people laughed once again.

But unlike the previous laughter, this time the laughter was a kind of self-deprecating laugh.

They originally thought they could manipulate the Principal, but the Principal didn't buy that; if you mess with me, I'll close the stores, and nobody gets to play.

"I really don't understand, why do you have to do this? Did I short you on rent, or did I short you on revenue sharing? Everything was operating just fine; what good does it do you to mess with me? You're just adding trouble for yourselves. Of course, I'm a person who isn't afraid of trouble; that's just how I've gotten by," Fang Hong said again.

The subtext of these words was that they could do whatever they wanted, and he simply wasn't afraid of them.

"Good, good, the Principal really makes us look at him with new eyes! This courage and boldness make us admire you," the Vanke General Manager sighed.

(End of this chapter)