Chapter 119: Proprietor Lu Plays Both Sides

Proprietor Lu sent away his employee, Liu Xiao, and headed to the bar alone.

It wasn't that he couldn't bring her, but the Heaven on Earth club didn't allow minors inside!

Hu Zi drove to the den of iniquity located on the west side of the Great Wall Hotel on the East Third Ring Road, parked the car, and followed his boss inside.

The 160-yuan entrance fee surprised even this cold-faced valet from Xiangjiang.

What kind of place was this expensive? Could it be that the women down there were made of gold?

Proprietor Lu was in no rush to go up; Yu Dong was the one who had invited him, so why should he be in a hurry? He would let that little fatty wait a while.

The two sat near the bar for a while, and Proprietor Lu looked around with great interest.

A regular fruit platter cost three to five hundred, and cocktails mixed at the bar ranged from 200 to 1,000.

Everywhere were giggling, charming beauties, and those in the main hall were likely only the lowest grade.

Inside was the "Heaven" where the wealthy feasted while the poor died of cold outside—the saying truly did not deceive me!

The opening of policies and society, the vigorous development of the market economy, and the gradually prominent liberalized environment and atmosphere all built a broad stage for the entrepreneurs and businessmen who had become wealthy first.

Everyone's dreams and ambitions were released; this was merely a drop in the ocean, the tip of the iceberg.

The two walked into private room 999.

"President Yu!"

"Director Lu, I have finally witnessed your style today!"

"Eh~ not at all, not at all, I'm showing my ignorance, showing my ignorance!"

Lu Kuan told Hu Zi to find a seat, then picked up the Remy Martin that had already been prepared and downed a glass with Yu Dong.

The purpose of their meeting today was very pure.

Drink, chat, play with women, and discuss distribution!

Proprietor Lu had called Liu Liu Yifei "Granny Liu" that afternoon, and now he felt like "Granny Lu," full of curiosity about this land of gentleness that had been famous in his past life.

In the 1980s, the trend of nightclubs blew from Tokyo to Xiangjiang, then from Xiangjiang to Pengcheng, and finally headed north, blossoming everywhere.

The predecessor of this place was a dance hall run by a local Jingcheng boss; after changing hands several times, it was taken over by a merchant from Wan Province, and finally welcomed the young Qin Hui, who truly brought this "treasure land" to the pinnacle of the club entertainment industry.

I call him a youth because that year, this Dazhou businessman, not yet 27, spent money like water, paying 1.8 million USD to acquire the dance hall and carry out the crazy transformation he had envisioned.

Yu Dong smiled and said, "Director Lu, is this your first time here?"

Lu Kuan looked at the former Beiyingchang employee, who was only in his early thirties this year, and smiled: "Yes, I had longed for it but couldn't reach it before; today I have finally seen it."

"President Yu, please don't laugh at me!"

Yu Dong gave him a look that every man understood; he had prescribed the right medicine.

Ever since this person burst onto the entertainment scene, many had been studying him; otherwise, how would Little Little Yanzi have found him?

It wasn't until Lu Kuan shockingly won the Golden Lion in Venice that the film circle turned its eyes toward him.

Without a doubt, this "Whiplash" would be a hot commodity for distributors.

And according to the public information from Wenjie Culture Media on the blog site, the North American rights for this film had already been bought by Miramax.

This only strengthened Yu Dong's resolve to approach him before China Film Group could.

How to snatch it? Cater to his preferences!

There is no wall without cracks; the line with Jiang Jiang Qinqin might not be known yet, but rumors of his affair with Dong Jie in the "The Story of a Noble Family" crew had already started to spread.

One couldn't blame others; those two were indeed on the verge of an illicit affair at the time, only to be accidentally caught by Liu Liu Yifei.

After three rounds of drinks, Yu Dong saw the atmosphere was right and prepared to call for hostesses.

"President Yu, let's talk business first today!"

There was no other reason; Fan Bingbing had called on the way here, and she was likely already at the Rose Garden by now.

The Golden Lion Award had become the symbol of the young director's sudden rise, and also an aphrodisiac for this great actress.

She had pestered him several times since he returned to the country!

Yu Dong offered a few polite words, and seeing that he truly had no such intention, he did not press the matter.

"Director Lu, you should understand my meaning. Our ages aren't far apart; today, may I be so bold as to call you brother?"

Lu Kuan pointed at the pile of bottles in front of him.

"Eh~ Brother Dong, that's not right. Look, I can't even count the beer bottles anymore, and we've almost finished two bottles of Remy Martin; why say such distant words?"

Proprietor Lu was naturally experienced in the drinking scene, and this body had been tempered by alcohol over the past year; he hadn't expected Yu Dong to be such a worthy opponent!

He didn't know that Yu Dong's heart and stomach were also churning.

One knows one's own affairs best.

After graduating from Beijing Film Academy in '94, Yu Dong was assigned to Beiyingchang to handle distribution, carrying film reels and taking cinema managers across the country out for drinks, drinking his way to great performance records, and becoming the youngest deputy section chief of distribution in Beiyingchang's history.

But looking at the way the kid opposite him was skillfully pushing cups and exchanging toasts, could it be that he started drinking from the womb?

Yu Dong was a 30-year-old old fox; he thought he was facing a 20-year-old little fox, but he had actually underestimated Proprietor Lu's 20 years of cultivation!

"Brother, then I'll be blunt: how about handing the distribution of 'Whiplash' to your brother?"

Proprietor Lu naturally had to strike a pose first and hold out for a better price.

"President Yu, Poly Bona was only established last year; it's been barely a year, and the national distribution capability..."

Yu Dong's ox-like eyes widened: "Brother, what kind of talk is that!"

"Poly Bona has only been established for a year, but I have been doing distribution for nearly ten years! Aside from the Jingcheng area, which cinema manager in Shanghai, Guangzhou, or Shenzhen do I not know?"

Proprietor Lu acknowledged this; in fact, in 2002, there weren't many distribution options before him.

In 2001, the state issued the "Film Distribution Business License," and Poly Bona became the first private distribution company to hold one.

Enlight Media was currently the largest domestic TV program producer and distributor; "Music Billboard" and "Film and Television Billboard" were their work.

They were the "know-it-alls" of domestic entertainment, but Enlight's distribution business wouldn't expand until after 2005.

Huayi Brothers was the same; their foray into distribution wouldn't begin until next year, when they cooperated with Xi'an Film Studio on "Warriors of Heaven and Earth."

For Proprietor Lu, choosing private meant Poly Bona, and choosing state-owned meant China Film Group or Shanghai Film Group; other local distribution agencies were not considered.

Before coming, Lu Kuan had already spoken with Gao Gao Chengsheng on the phone, and he was also waiting for China Film Group's response.

"Brother Dong, to be honest, China Film Group also has intentions; you know, Han Zong..."

Yu Dong's face turned pale; normally, he wouldn't dare snatch this business from his old leader.

But Poly Bona had been established for nearly a year, and it still had no impressive business or high-profile brand.

Facing the increasingly withered domestic film market, even he, the boss, felt exhausted, let alone his employees.

For Poly Bona now, to put it exaggeratedly, it was a moment of life and death; never mind a leader, even if it were his own father, he would have to snatch it if he had to!

"Brother, China Film Group has always been overbearing; they will never negotiate on the 15% distribution fee. We at Poly Bona offer quality at a low price; how about 13%?"

Proprietor Lu pondered in silence; he feigned difficulty and stepped out of the private room to make a phone call.

This involved a calculation issue regarding domestic box office. (Note 1)

While Lu Kuan and Yu Dong were drinking in the 999 VIP room, there was also a lively drinking party at a private restaurant near Xiaoxitian.

"Han Zong! I toast you; thank you for your support of Lu Lu Chuan!"

The man with the flat top said politely: "Old Master, you mustn't, please sit!"

In fact, Han Han Shanping didn't really want to attend the banquet today; he was a man of decisive action and feared sitting with pedantic scholars like Lu Lu Tianming the most.

He was a screenwriter senior more than ten years his elder, and he felt uncomfortable even drinking.

He glanced at the man beside him and feigned anger: "Jiang Wen, are you raising fish in your glass?"

"That, Little Lu, hurry up and toast; don't you see your Master Jiang is about to fall asleep?"

Lu Lu Chuan's face stiffened; he hated hearing the word "Master" right now, as it always reminded him of that little brat who slapped him in the face in Venice.

Zhao Wei smiled: "I'll do it; Director Lu looks like he can't hold his liquor, haha."

Jiang Wen helplessly raised his glass to clink with hers; the two were partners in "Warriors of Heaven and Earth" and "Green Tea," and their relationship was good.

Also at the table were the Wang brothers of Yanda Huayi, as well as Han Han Shanping's secretary, Gao Gao Chengsheng.

Today's gathering was actually organized by Jiang Wen, and the reason was simple.

About a month ago, Liu Liu Xiaoqing was imprisoned.

In fact, the investigation into her began in May, but the person involved held onto a fluke mentality, thinking that paying back the taxes would be fine.

Unexpectedly, at the end of July, news came out that she had been detained at the Pengcheng customs and had since disappeared.

By the time Jiang Wen asked people to find out the details from all sides, this top actress had already begun experiencing life in a single cell at Qincheng Prison.

Today, he gathered a large group of leaders and friends, hoping that more people could offer ideas on how to help his ex-girlfriend.

It just so happened that Wang Wang Xiaolei and Lu Lu Chuan had just finished discussing the overseas rights for "The Missing Gun," and Lu Lu Tianming suggested hosting Han Zong to express his gratitude, so the two tables were combined into one to liven things up.

Han Han Shanping suddenly frowned: "Little Gao, how was the screening at Beijing Film Academy this morning?"

Gao Gao Chengsheng smiled: "Although Director Lu Kuan is young, he has many ideas. I also chatted with him briefly this afternoon about the distribution of 'Whiplash'."

He adjusted his glasses and deliberated on how to bring it up.

Han Han Shanping was a shrewd leader; he squinted at him: "What's wrong? Unwilling to distribute for China Film Group?"

"No, leader, Lu Kuan said this film was almost entirely self-funded, costing over 10 million, and there wasn't much left after taxes on the overseas rights."

Well, in one sentence, two out of three pieces of information were fake.

"He wanted to discuss if we could... on the distribution fee..."

Wang Wang Xiaolei and his brother exchanged a look; it was the first time they had heard of someone daring to discuss distribution fees with Han Han Shanping; the young man had some guts.

A 15% distribution fee wasn't impossible to negotiate, but it depended on the person and the time.

In 2002, domestic films were in a transition period, China Film Group was basically dominant, and he was just a fledgling young director.

If China Film Group asked for less in distribution fees, they would earn less, and Han Han Shanping naturally didn't want to hear such things.

Although the extra money wouldn't go into his pocket, it was political achievement!

True, you, Lu Kuan, have indeed won awards and brought glory to Chinese cinema, but can a film that wins awards necessarily have good box office?

There are countless precedents for this.

Zhao Wei felt uncomfortable hearing the name Lu Kuan; the words he had used to subtly mock her about her film bombing next year at the teahouse that day were still vivid in her mind.

"Mr. Han, actually, this Lu Kuan is quite interesting; he is more than just a director."

Everyone at the table cast suspicious glances.

Zhao Wei smiled and said: "It is said that before this Lu Kuan was admitted to the Beijing Film Academy, he was a little Daoist priest on Maoshan in Jiangsu Province, and he only entered this industry because he was chosen by Zhang Zhang Jizhong to play Yin Yin Zhiping."

"Rumor has it in the streets that he also has the skill of physiognomy and fortune-telling by birth dates; it is rumored that he was the one who spotted the serious illness of Anita Mui in Xiangjiang."

No wonder they say this person is someone who understands worldly affairs and has extraordinary emotional intelligence.

The table was chatting about the distribution of Lu Kuan's film, his professional capabilities, and the profit expectations for this movie.

You suddenly interject with nonsense to expose the charlatan side of Lu Kuan to everyone; what is your intention?

Han Han Shanping came from a family of old revolutionaries and had always looked down upon such crooked, sneaky, and petty behavior.

"Little Gao, go check his background; how did he get involved with a charlatan?"

Lu Lu Tianming had already heard from his son about the friction between him and Lu Kuan, so he interjected at the right moment.

"Secretary Gao, who would have thought there is still so much residual poison of feudal superstition left? China Film Group must keep its eyes sharp; this is a taboo subject for the higher-ups!"

Upon hearing this, Han Han Shanping's expression grew even uglier, and he waved his hand directly.

"Let's do this: you talk to him. If he agrees to the 15% maximum distribution fee, come to Xiaoxitian to discuss it in the next few days; if he doesn't agree, then forget it."

"Aren't we still discussing the distribution of 'Together' with Chen Kaige these past two months?"

"They are both art films, and we don't lack this one."

Gao Gao Chengsheng groaned inwardly.

Since Han Han Shanping had asked, he could not remain silent.

But he had no desire to discuss this matter on this occasion.

Firstly, leaders are prone to impulsive and unbalanced decisions when drunk.

Secondly, what kind of grudge did this Zhao Wei and that old bastard Lu Lu Tianming have with Lu Kuan in a past life?

Why are they both so eager to see him dead?

Zhao Wei smiled charmingly as she clinked glasses with Jiang Wen again, determined to turn up the heat on that insolent little charlatan.

If you can really predict the future, let's see if you can get through this hurdle!

"Old Jiang, stop pulling such a long face; I'll give you an idea."

Jiang Wen perked up: "What is it?"

"It's still that Lu Kuan. Isn't it said that Zhang Zhang Tianshuo was tricked by his sorcery? Why not find him to calculate what to do about Teacher Liu's matter?"

Han Han Shanping looked at her with dissatisfaction and said sternly to Jiang Wen: "Jiang Wen, don't be foolish enough to seek out these crooked paths. Never break the law, and never go against the government."

"I will help you inquire about this matter, but there is one condition: you must pay what you owe, and she cannot short the state a single cent of taxes!"

Jiang Wen smiled: "Old leader, I'll listen to you!"

Seeing the leader's unpleasant expression, Gao Gao Chengsheng could only drink his bitter wine in silence.

Suddenly, the phone in his pocket vibrated, and he excused himself from the table.

"Hello? Director Lu, what advice do you have?"

"Secretary Gao, I wonder what the plan is on the side of Mr. Han at China Film Group?"

"Mr. Yu and Mr. Ren from Shanghai Film Group are also urging me quite hard here, Secretary Gao, what do you think..."

Gao Gao Chengsheng did not know if it was true that Ren Ren Zhonglun of Shanghai Film Group had sent people to contact him, but that kid Yu Dong must have already seized the opportunity.

The reason was simple: he was struggling to survive.

"Director Lu, I am truly sorry, but regarding the distribution fees, China Film Group here..."

Boss Lu's heart sank. His optimal solution was, of course, to have China Film Group handle the distribution; not only were their theater chain resources abundant, but he could also build a relationship with Han Zong.

If the course of history had not changed, this was a relationship that could last until 2014, almost spanning the entire peak of Chinese-language cinema.

"Alright, then we'll be in touch. Many thanks, Secretary Gao!"

Hesitation leads to disaster; Boss Lu did not waste any more words and hung up the phone directly.

If you seek peace through war, peace survives; if you seek peace through compromise, peace perishes.

His engagement with China Film Group and Han Han Shanping must not be entered into from too low a position; it's not like you are the only ones who can do distribution, right?

"Brother Dong! Come, let's keep drinking!"

Yu Dong was burning with anxiety in the private room, eagerly awaiting Boss Lu's return.

Seeing him return to his seat with a beaming face to toast him, Yu Dong's heart sank; could it be that he had already reached an agreement with China Film Group?

"Brother, this distribution..."

Lu Kuan sighed heavily.

"Brother Dong, it's not that I don't want to take care of your business, it's just that the percentage China Film Group offered is too high!"

"How much?"

"China Film Group only wants 12 points!"

"How much?"

"They even promised to advance the promotional expenses for me!"

So-called advanced promotional expenses mean the distribution company pays for the marketing costs during the distribution process upfront, which are then deducted from the final box office split.

Some producers with tight budgets usually concede some percentage points to the distributor in exchange for them advancing the promotional costs.

But for Yu Dong right now, these costs were a burden Poly Bona could not bear.

Yu Dong was shocked and horrified; damn you, Han...

You, Mr. Han, how can you be so unreasonable? Have you forgotten the industry rules?

"Mr. Yu, don't let this leak out; Secretary Gao told me this privately."

"On the phone, he said that after hanging up, no one should admit to it if asked."

"Likewise, once I leave this room, I won't admit it was 12 points, nor that they are advancing the promotional costs!"

Fatty Yu revealed a fierce look, gritted his teeth, and stomped his foot!

"Brother, I'll take a loss and play this round with you; 10 points for the distribution fee!"

"But as for these advanced promotional expenses, we are a small outfit..."

Lu Kuan pondered for a long while: "How about this, Brother Dong, you've made such a big concession, I won't be ungrateful."

"I accept the 10 points, and we will advance the promotional expenses ourselves, but I have only one requirement!"

Yu Dong's face flushed red as he stared fixedly at Boss Lu.

"For these two months, you can only distribute 'Whiplash' alone, because this time I want to design the distribution plan myself, a plan that covers the whole country, not just first-tier cities!"

"With your manpower and scale, if you take on other films, you will definitely not be able to meet my requirements."

Yu Dong tremblingly put down his wine glass.

Forget it, better the friend dies than the monk; I'll just have to be sorry to Director Chen.

Anyway, he was also dragging his feet with me; it just so happens to suit his wishes to let China Film Group handle 'Together'.

"Brother, cheers!"

"Cheers!"

Note 1: A brief summary of box office splitting.

A film work from production to consumption by the audience

is composed of four parties: production, distribution, theater chains, and cinemas.

(1) Now let's assume the final box office of 'Whiplash' is 1 million yuan. First, the national "Special Fund" and business tax will take up an 8.3% share, meaning only the remaining 917,000 can be split among these four parties.

(2) Next is the split among the four parties. In the year 2002, the distributor and producer generally took about 41% of the share, while the theater chains and cinemas together took 57%.

Note: This split ratio is not set in stone. In 2000, the split ratio was around 35%. In 2002, because of the dominance of 'Hero', Zhang Zhang Weiping personally forced the issue, raising the ratio to about 41%. Subsequent struggles over the split will be discussed later.

(3) In this 917,000 of distributable box office, the 41% belonging to the producer and distributor still needs to be split further. The distributor generally takes 5-15 points; this refers to 5%-15% of the 917,000, not 5%-15% of the 41%.

(4) If calculated at the maximum of 15 points, then out of the 917,000 distributable box office, Lu Kuan can get a total of 917,000 * (41% - 15%) = 238,420 yuan in box office, which is the producer's final income.

(Intermediate agency fees and promotional expenses advanced by the distributor are not considered)

ps: After several subsequent split wars, the 41% ratio will be adjusted again; currently, it generally takes three times the box office to break even.

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(End of chapter)