Chapter 162: $70 Million Blockbuster!

Lu Lu Kebei's private cocktail party was held in the banquet hall of the Hotel Martinez.

It was very close to the Palais des Festivals and located in the heart of Cannes.

Standing by the railing of the second-floor lounge and looking out toward the sea, the night had fallen, and the starlight shimmered, casting a mysterious veil over the French Riviera.

Lu Kuan was introduced to various celebrities by Lu Lu Kebei, and Fan Fan Bingbing also took the opportunity to socialize familiarly, managing to get photos taken and become a recognizable face.

"Thank you, Director Lu."

Perhaps influenced by the extravagant atmosphere, Fan Fan Bingbing looked at the glittering jewels and finery in the hall and remarked from the bottom of her heart.

"Without you, I don't know how long it would have taken me to get here."

Boss Lu smiled noncommittally and clinked his glass lightly against hers.

He didn't say anything about equivalent exchange to ruin the mood, but he couldn't bring himself to act overly sincere or empathetic either.

"Everyone must be responsible for their own choices."

"You chose to work with me, so you have to bear the consequences, whether good or bad."

Wenjie's counterattack against Yanda Huayi was already on the agenda, and both Yanda Huayi and he might have use for Fan Fan Bingbing as a pawn.

Her own choices would determine her future outcome.

"Lu! Why are you hiding here? I've been looking for you for ages."

After exchanging pleasantries with guests, Lu Lu Kebei saw Lu Kuan chatting in the second-floor lounge and came straight over to take the initiative.

"Oh, beautiful Oriental lady, I must praise you once again; your cheongsam is so stunning I simply cannot take my eyes off it!"

The flattery poured out.

"Thank you, Mr. Lu Lu Kebei, your manners are also very elegant."

Fan Fan Bingbing knew the two had business to discuss, so she made an excuse to fetch them champagne to leave them space to talk.

"Lu, your demeanor at mk2 today was admirable. Let's have an honest and open talk!"

Lu Kuan looked pained:

"I'm sorry, I am a pure filmmaker, and I still haven't been able to convince myself. I cannot make such a dirty deal with Laurent in private!"

Lu Lu Kebei, of course, didn't care; he had come to poach the deal anyway.

"I greatly admire your character. Shall we discuss a standard deal then?"

Lu Kuan sneered; he had backstabbed his partner so quickly.

But since one shouldn't expose others' shortcomings, he was happy to pretend he didn't know.

"Mr. Lu Lu Kebei, our previous collaboration was very pleasant, but let's wait until after the 25th to discuss *Shoplifters*."

The 25th was the awards ceremony; he was determined to hold out for a better price.

"Lu, you shouldn't treat your friends this way. I just chatted with Harvey, and you've already agreed to sell him the North American rights."

"I think our friendship is worth more than his; Jews are not suitable business partners."

Boss Lu dodged the question: "Actually, I had another purpose for coming to your private party today."

"What is it?"

Lu Kuan gestured toward Tom Cruise, who had just entered the venue.

"Help me introduce him; I have a collaboration to discuss with Tom Cruise!"

Lu Lu Kebei found it incredible; he couldn't imagine what kind of collaboration a Chinese director could have with a top Hollywood star who commanded a 20-million-dollar salary.

He admitted that Lu Kuan was a highly talented Chinese director, but this was Hollywood!

Lu Lu Kebei's expression darkened slightly: "That's not a funny joke, Lu. Perhaps you can find a better excuse to deal with me."

Boss Lu smiled and patted his forearm: "How could it be? You'll understand in a moment. Let's go!"

Lu Lu Kebei was skeptical but quickly changed his expression and introduced Lu Kuan to Tom Cruise.

"Hello! Lu! I've heard your name. My agent watched the DVD of your *Whiplash* and recommended the film to me!"

Tom Cruise was very talkative and had no airs.

Because he was not only a top-tier Hollywood star with the highest salary at the time, but also a producer of several small-budget independent films.

Much like Lu Lu Kebei, he was a director (or actor) who excelled in business.

It was a path many Hollywood stars took: after mastering their craft, they leveraged their accumulated connections and resources to monetize their value.

"It's an honor, Tom. I'd like to discuss a big business deal with you."

Lu Lu Kebei glanced at him, not expecting this Oriental director to actually have such audacity.

"Oh, I'm sorry, my schedule for the next two years is already full."

He had just finished filming the Japanese movie *The Last Samurai*, and his next project was Michael Mann's *Collateral*, a thriller for DreamWorks.

Lu Kuan smiled confidently: "I'm not looking for you to star in it; I'm looking for you to be the producer!"

Now, not only Lu Lu Kebei but even Tom Cruise was surprised.

This Chinese director didn't seem very reliable; he suspected Lu Kuan didn't even understand the rules of Hollywood filmmaking.

But he quickly overturned his first impression.

The three found a relatively quiet spot, and Lu Kuan called A Fei, who was waiting outside the party, to bring over two copies of the script.

"*Secret Region*?"

Lu Kuan had ultimately chosen He Xi's *Secret Region*, which was more suitable for adaptation. It had been published in *Science Fiction World* in 1999, and Lu Kuan had previously purchased the adaptation rights from the original author.

Tom Cruise and Lu Lu Kebei temporarily suppressed their doubts and began flipping through the script.

【In the year 20xx, the Earth's population has exceeded 50 billion. The global food supply relies on the endless output of the Ximai Farm.】

【One day, the farm suddenly stops sending food to the outside world. The Federation sends an emergency team to investigate, and the protagonists discover that time inside the farm moves over 40,000 times faster than outside; the organisms here have evolved to be extremely dangerous.】

【It turns out that Lan Yue's father, Lan Jiangshui, was the first to discover the principle of time-scale conservation, but his student Ximai secretly applied it to build the farm. In the end, to prevent humanity from losing its evolutionary advantage and to stop the monsters inside the farm from invading the human world, the male and female leads choose to stay in the farm to evolve alongside the creatures, destroying the password-protected door to the outside world.】

Lu Kuan had copied two small-budget art films from his previous life; although he had made certain adaptations in cinematography, lighting, and narrative technique, they were still someone else's work.

But as a high-achiever from USC who also had dreams of being a director in his past life, having a work that truly condensed his own efforts was still a tempting choice.

This had nothing to do with moral fastidiousness.

He would still continue to copy literature to provide excellent scripts for the directors signed to Wenjie.

The two flipped through the script and finished the story quickly, but the special effects production, camera presets, and visual design were all ingenious—this was the dividing line between levels of directorial skill.

Since the project hadn't been officially greenlit, there was no way to scout locations, so the storyboards and scripts could only be presented in the script in a preset form for now.

Tom Cruise and Lu Lu Kebei were increasingly shocked as they read; not to mention anything else, how could this Chinese director write such a perfectly formatted Hollywood script?

Lu Kuan had mentioned when training Ning Hao in screenwriting that the Hollywood film industry had the strictest requirements for scripts.

They had a set of foolproof screenwriting rules.

Take a 110-minute film script, for example: from the first minute to the final image, the content that should be presented is fixed within a rough range.

The beginning is the visual presentation, and the 5th minute is the presentation of the theme;

The 10th minute completes the setup and plot structure;

The 12th minute must have the first turning point, because by this time the audience is gradually getting tired;

Then come the arguments, the second act turning point, the B-story, and so on.

The climax of a Hollywood movie generally occurs between the 55th and 75th minutes; this plot point is the 10th plot point, called "Bad Guys Close In," to create tension.

Next is the 11th plot point, "All Is Lost," which is meant to suppress the protagonist.

The 12th is the "Dark Night of the Soul," where the emotional suppression reaches its limit, and the protagonist prepares to make a comeback.

From the 85th minute on, it is the process of the protagonist turning defeat into victory.

This three-act screenwriting rule with 15 plot points applies to all Hollywood films like superhero or family-friendly themes, and audiences never tire of it.

This is also a conclusion reached by practitioners in the Hollywood film industry through long-term theory, practice, and even the inclusion of psychological analysis.

It is like an assembly line, which is why the three major European film festivals are hostile and exclusionary toward Hollywood, as they treat film as a pure commodity and ignore exploration in the artistic realm.

Tom Cruise saw Lu Kuan's professionalism and ambition in the script, and Lu Lu Kebei saw Lu Kuan's pragmatic attitude in his familiarity with Hollywood film techniques.

"The story is very good. Is it your own work?"

"No, it is an award-winning work by a Chinese science fiction writer, published in 1999, which won the highest honor for science fiction in our country."

The two were noncommittal; when it came to science fiction films, they both had enough reason to show arrogance.

Although Lu Lu Kebei had already transitioned to being a producer and had handled pure commercial films like *The Transporter* and *Taxi*,

he asked himself if he had the ability to helm such a major production, given the level of special effects and the estimated budget reflected in the script.

Lu Kuan asked him to introduce Tom Cruise, and the French director was quite tactful.

After all, his goal had been achieved, and it would be easier for him to talk to Lu Kuan about the rights to *Shoplifters*; isn't that how favors are used?

"You two talk first; I'll talk to Lu about our collaboration later."

Fan Fan Bingbing walked over at the right moment and placed the champagne on the table.

"Director, your drinks."

Tom Cruise stood up to shake hands like a gentleman, and Lu Kuan introduced the two.

He was quite amazed by Fan Bingbing's atmospheric beauty, but his heart was currently immersed in Lu Kuan's film project.

How could such a top Hollywood star be interested in a daydream-like science fiction film project from an unknown Chinese director?

Because Boss Lu had scratched his itch!

This involved a major "disagreement" between Tom Cruise's career and Paramount.

Everyone knew about the *Mission: Impossible* series in Cruise's career, but what people didn't know was that he was not only the lead actor but also the producer.

Under the planning of his shrewd business mind, Paramount had signed a unique agreement with him in Hollywood.

He could get 22% of the film's global box office and television channel profits, which also included a share of the video revenue.

This agreement looked unremarkable, but in the United States in the 1990s, videotapes (and later DVDs) had gradually become the most important cash cow for Hollywood film companies.

Its importance is not even inferior to the film's box office.

In Hollywood's profit-sharing system, the distribution of home video revenue is firmly held by film studios; even if big-name leads participate in profit distribution, the true income is always hidden by Hollywood's six major complex accounting systems.

They will designate 80% of video revenue as marketing costs to pay for production, packaging, warehousing, and distribution transport, using compliant and legal methods to leave only 20% for the director, actors, screenwriters, and other distributors.

But the special thing about the contract that Tom Cruise signed with Paramount is that he gets 22% before the cost accounting is deducted!

In other words, other actors get 20% * 10%, which ultimately results in a 2% profit share from home video.

He gets 22%, more than ten times that of the former.

Paramount is also one of the six majors, so logically, they shouldn't make such a stupid mistake.

The signing of this contract has certain historical reasons.

Tom Cruise and Paramount's collaboration began very early; before the release of the first *Mission: Impossible* in 1996, North American home video revenue had not yet seen significant growth.

In order to pay less for the former's salary, Paramount reached an agreement with him, which can be described as losing the watermelon to pick up the sesame seeds.

It was from this agreement that Tom Cruise opened a new door for other Hollywood stars.

Everyone followed suit, participating in this kind of "back-end profit" sharing.

But after all, one must be strong oneself; such an agreement cannot be recognized by the six majors unless one is a top-tier star.

He earned 70 million dollars from *Mission: Impossible 1*, and before *Mission: Impossible 2* started filming, he waited for a better price and raised the 22% to 30%!

In the end, after the film was finished and the accounts were settled, the profit he took as a male lead was even higher than Paramount's!

To what extent?

He was even so embarrassed that he paid out of his own pocket, giving up a few percentage points from his share as the director's fee for Wu Wu Yusen...

This film, released in North America in 2000, earned him a massive 92 million dollars, but it also caused great dissatisfaction at Paramount.

By 2003, the profit from DVD sales in the North American market was already nearly twice that of the theatrical box office, and Paramount completely stopped playing along.

Now both sides are at odds, and the negotiations are almost on the verge of collapse.

In the later year of 2006, Paramount's big boss Redstone unilaterally announced the termination of the contract with Tom Cruise.

But the latter turned around and was taken under the wing of MGM, where he was put in charge of the United Artists film company once founded by Chaplin.

But in fact, Tom Cruise and MGM had already signed a memorandum of understanding as early as 2003, only giving up because Tom Cruise could not bear to let go of *Mission: Impossible 3*.

It wasn't until he completed the backstabbing of Paramount in 2006, and having already filled his own pockets, that he gladly took over United Artists.

Besides being a famous actor, people were then surprised to discover that he was also the only producer besides George Lucas, Spielberg, and Bruckheimer to have created a billion-dollar film series!

Lu Kuan coming to talk to him about *Foreign Land* was exactly catering to his interests, giving United Artists, which he might take over, a project for a flying start!

It just depends on whether he is interested or not.

Of course, he could also have his cake and eat it too.

He could both cling to Paramount's *Mission: Impossible 3* and, as the producer of this film, act as a mediator to reach a project cooperation.

Tom Cruise looked over the script repeatedly without giving a clear indication, but that did not prevent him from deepening his understanding of the *Foreign Land* project.

"You Chinese are very good at kung fu films, but the cost of science fiction films is too high; it is difficult to recover costs if this film is not made as an English-language film."

Lu Kuan knew that his doubts arose from seeing the Chinese names in the script.

"Of course, this film will be an English-language work, adopting Hollywood's production, superstar, and capital operation methods."

The preliminary estimated cost of the script is as high as 70 million dollars; to be profitable, one must use Hollywood's film rules to make it a blockbuster that travels the world.

Just like Lu Lu Kebei, who just left the table; why is his film criticized by the French? Because his commercial films are all English-language films, for the sake of the box office.

This is unacceptable to the French, who praise French as the most beautiful language in the world!

Tom Cruise's eyes kept lingering on the 70-million-dollar figure, and he couldn't help but feel a bit hesitant.

"You said you want me to be the producer but not the male lead; do you want me to invest as well?"

"No."

Lu Kuan looked at his bewildered expression and threw out his real plan.

"I want to model the financing after the 2001 film *Tomb Raider*!"

An average Hollywood star might not know what he is talking about, but an old hand like Tom Cruise would certainly understand.

This is a textbook-style Hollywood film financing process that has been cited as a template countless times by later generations.

Tom Cruise was stunned for a moment, then sighed softly: "You are truly an amazing young man; you shouldn't be a director, a producer seems to suit you better."

Lu Kuan took out another financing plan and handed it to Tom Cruise; this was the true core content of the entire project.

With a script but no money and no superstars, it would be a flop if made.

His financing plan almost copied *Tomb Raider*, because that was a plan proven by practice to be efficient and feasible in this era!

With a budget of 70 million dollars, the sources of funds are divided into four steps, from easy to difficult.

First, Lu Kuan's own capital investment, which is about 10 million dollars.

Second, 10 million dollars in filming location tax rebates, with expected locations in the United States' Louisiana, Canada's Toronto, Australia's Sydney, New Zealand, and other cities.

Third, 10 million dollars in product placement, targeting McDonald's, KFC, Burger King, Coca-Cola/Pepsi, as well as mobile phone and car brands.

Fourth, using the tax relief policies of countries like the UK and Germany to lease back the film, estimated at 15 million dollars.

The remaining 25 million dollars will be obtained through bank loans using project pre-sale agreements after completion guarantees.

Self-owned capital and filming location tax rebates go without saying, especially Toronto's "Film Services Tax Credit" policy.

First, it gives you a 16% reduction in personnel salary costs; if the household registration is local, it is reduced by another 18%;

For special effects completed within the territory, 20% of the special effects costs are subsidized, and the reductions for other hardware items such as venue rentals, costumes, makeup, and props are even more varied.

Product placement is also not a problem.

The advertising projects of Hollywood films are directly related to the starring celebrities; choosing fast-food placements like McDonald's is convenient, and one can use their stores for marketing and promotion.

The fourth point, tax rebates in countries like the UK and Germany, is also a standard Hollywood operation.

Take *Tomb Raider* as an example; after the project was established, Paramount sold the film's copyright to a British company and then leased it back to themselves.

One round trip resulted in a 12-million-dollar tax rebate, which directly covered Angelina Jolie's 7.5-million-dollar salary. (Note 1)

Germany is even more so; German tax law stipulates that film investment is not taxed, but investment returns are treated as normal income.

Suppose a German invests 10,000 in *Foreign Land*; the actual money they put out is only 4,900.

Because according to the 51% income tax rate, that 5,100 portion would have originally been paid to the National Tax Bureau.

If *Foreign Land* earns this German double the return, then they have basically succeeded in complete tax avoidance.

This is also the reason why Hollywood crazily harvested German hot money during that period; films like Kevin Costner's *Dragonfly* and Stallone's *Avenging Angelo* all belonged to this category.

However, this bug was later corrected by the government.

The most critical part of this plan is the final 25 million in financing.

Financing requires taking the film's pre-sale agreement to get a loan, and the film's pre-sale agreement requires your film to be favored by distributors!

Because you are taking the plan to talk about distribution in advance, the film has only just been established and hasn't even finished filming yet!

Undoubtedly, a famous director plus a superstar, plus a prestigious producer, can constitute this core requirement.

Lu Kuan is barely a qualified director; although he has experience winning awards at the three major festivals, he has not yet proven his ability in the largest film market, North America.

The producer's responsibility naturally falls on Tom Cruise; he is familiar with Hollywood film rules and will not be tricked or trapped by distributors in the contract.

As for the superstar...

Tom Cruise hit the nail on the head: "Who is your male lead? If the male lead is not chosen well, it is difficult to raise the price of the pre-sale."

Excluding supporting roles, the main cast in the *Foreign Land* script adapted by Lu Kuan consists of two men and one woman, but the focus is only on two people.

Among them, the male lead has more scenes, and the female lead is equivalent to a supporting role, so the box office appeal rests entirely on the male lead.

Lu Kuan's first consideration is, of course, Tom Cruise, but his 20-million-dollar salary is really too high.

With his shrewdness, if he were to star, he would inevitably want to negotiate contract terms similar to those with Paramount.

Boss Lu pondered: "I am currently considering a few candidates."

"Keanu Reeves, Adrien Brody, Sean Penn."

Keanu Reeves has become popular in the last two years because of the two *Matrix* films; considering him is because his personal industry reputation and level of professionalism are sufficient, and he also has a certain identification with Chinese culture.

And the latter two are purely cheating; Brody is the 2003 Oscar Best Actor, and Sean Penn is the 2004 Oscar Best Actor.

The former is in the limelight, and the latter he can now buy at a relatively low price...

"What about the female lead? How about Lucy Liu? There are quite a few action scenes in this play."

"Lucy Liu is American; using her would not satisfy the regulations for a co-production, so I plan to choose a Chinese actress."

For imported films distributed by China Film Group, the profit-sharing ratio for foreign films is only 13%; Lu Kuan must ensure the nature of this co-production.

Fan Fan Bingbing looked at the man beside her with sparkling eyes; although her English was not very good, she could understand the appreciative expression of the Hollywood star opposite.

When she heard Lu Kuan say "Chinese actress," she couldn't help but feel flustered!

She saw Lu Kuan writing the script in the room, but she just didn't know if there was a role reserved for her.

This is a Hollywood film!

Tom Cruise understood the implication and immediately smiled: "I see, you want your girlfriend to act in it, right?"

"Don't treat me like Lu Lu Kebei; I am an upright director!"

The two laughed heartily, knowing what the other was thinking.

Lu Lu Kebei's first wife was the lead in *Nikita*, and his second was the lead in *The Fifth Element*.

It's just that he didn't turn his girlfriend into a female lead, but turned the female lead into a girlfriend.

This is different from Director Jia; he is purely promoting his wife.

Tom Cruise smoothed out the script in his hand with appreciation, as well as this project plan that had been fully considered by the Chinese director opposite.

It is hard to say he is not tempted by this project, because without him having to pay any price, Lu Kuan is only borrowing his connections, prestige, and good relationships with stars and film companies in Hollywood.

Then there is only one last question left.

"Lu Kuan, tell me, what can I get?"

"A 10% profit share!"

Do not think this figure is too far off compared to his contract with Paramount; for *Mission: Impossible*, he provided both labor and effort.

For *Edge of Tomorrow*, he only needs to show his face, liaise with various forces, and have a professional manager coordinate with Lu Kuan's company to handle the procedures.

"I want 13%."

Boss Lu laughed: "Don't you Westerners all hate the number 13?"

Tang Mu looked arrogant: "I don't believe in Christianity; I believe in Scientology."

This was not him making a joke; the United States does indeed have a Scientology, also known as the Church of Scientology.

This sect advocates for the internal reach of the mind, body, and spirit; Tang Mu had believed in Scientology since he was 18, using it to resolve the dyslexia he had suffered from since childhood.

"Fine! It's a deal!"

Lu Kuan took the initiative to stand up and shake hands, effectively completing the core mission of this trip to Cannes.

Fan Fan Bingbing strolled along the beach, arm-in-arm with the young director.

Instantly transitioning from an extremely extravagant private banquet to the breeze-swept coastline, this future top actress, burdened with heavy thoughts, felt as if a dream had shattered.

Fan Fan Bingbing was uncharacteristically cautious, deliberating on how to ask about the film.

She was afraid that if she spoke too rashly, she would be rejected, yet she was also afraid that speaking directly would cause him displeasure.

The figure of 70 million USD had covered Lu Kuan in a hard suit of capital armor, making Fan Fan Bingbing feel a sense of awe, and from the bottom of her heart, she became even more fanatically determined to hold onto him.

If Lu Kuan had previously been just a talented young director, having only just begun to make a name for himself in the domestic film and entertainment circles;

Then this 70 million USD project would undoubtedly push him onto a pedestal, becoming the clarion call for his entry into the ranks of film and television capital!

In 2002, the total annual box office in the mainland was 900 million; in 2003, the total annual box office in the mainland was 1 billion.

The budget for this single film of his reached nearly 600 million RMB!

Such a contrast was too astonishing.

But shifting the perspective to all of North America: the 2003 North American box office was nearly 9.3 billion USD, so this mere 70 million USD was not such an outrageous figure.

It was still because the gap between the Chinese and Western film industries at this time was like a chasm.

And it was precisely because of this that Lu Kuan was able to "export to domestic sales" at the Venice Film Festival previously;

As well as the fact that his plan to leverage a 70 million USD project with 10 million USD in principal was able to proceed this time.

It was just that while this 70 million USD was unremarkable in North America, it was equivalent to a colossal beast in the domestic entertainment industry.

To put it exaggeratedly, this film was not just his own project.

It was also a ladder to heaven for countless first-tier actresses from the mainland, Hong Kong, and Taiwan who dreamed of climbing into or sleeping their way into Hollywood;

It was a political achievement that official counterparts like Han Han Shanping drooled over;

It was a major weight that he, Lu Kuan, would use to advance from a director toward capital, to cultivate and develop his special effects company, and to establish his position as an entertainment giant in the domestic industry!

Note 1:

I spent 18 yuan on JD to buy a copy of *Inside the Hollywood Film Economy*; the data for these chapters on film financing and 9/11 all came from here.

Don't say I'm padding; this is also paid knowledge of mine. It shouldn't be too much to earn back the book money!

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(End of chapter)