Huayi Brothers, once occupying half of the domestic film, has been on fire for 20 years, and has more than 300 top artists such as Li Bingbing, Fan Bingbing, Guan Zhilin, Chen Daoming, etc.; it is also the largest private film and television enterprise in China, with a market value of more than 90 billion yuan.
But now, Huayi Brothers has ceased to be brilliant, and the stock price has fallen all the way to about 10 billion.
Even if the founder sold the mansion calligraphy and painting to save himself, and Feng Xiaogang offered 235 million yuan in compensation for the VAM, it was still to no avail, and eventually he even became the executor and enforced the target of 300 million yuan (legal terms).
A generation of film and television giants Huayi Brothers, how did it come to this point?
<h1 class="pgc-h-arrow-right" data-track="8" >01: Seize the opportunity and be brilliant</h1>
Speaking of the Huayi brothers, they can't get around Wang Zhongjun and Wang Zhonglei.
As the saying goes, the entrepreneurship of the brothers who fight the war and the two brothers of the Wang family is a good portrayal. His elder brother Wang Zhongjun, who had joined the army, entered a state-owned enterprise, and served as a manager of a private enterprise, only founded Huayi after going around, and initially took over the advertising business.
As for his younger brother Wang Zhonglei, after being frustrated in business, he chose to enter Huayi.
Facts have proved that these two brothers do have the ability, and together, they actually sent Huayi into the ranks of the top ten domestic advertising companies.
Since then, Huayi has embarked on the road of film and television, which is purely accidental.
In 1998, Wang Zhongjun met his former colleague Liu Xiaoling and was told that film and television dramas were very profitable. After some conversation, he was very moved, and after returning, he invested in the sitcom "Psychological Clinic", which was really profitable.
Wang Zhongjun, who tasted the sweetness, was out of control and decided to completely enter the film industry, and a generation of legends began from then on.
The following year, he invested in Feng Xiaogang's "Endless", which was a great success at the box office, earning 50 million yuan. And this film not only made Huayi Brothers a hit, but also allowed the Wang family brothers to sign Feng Xiaogang with a salary of 650,000 yuan a year.
If "Endless" makes Huayi Brothers stand firm, then the subsequent "Jing Ke Thorn Qin King" and "The Devil Is Coming" will use the record high box office to completely send this "advertising agency" to the altar of the industry.
Since then, from 2003 to 2009, Huayi Brothers has joined hands with Feng Xiaogang to shoot a series of works with explosive word of mouth, such as "No Thief in the World", "Gathering Number", "Night Banquet", "Do Not Disturb insincerity", "Tangshan Earthquake", "Mobile Phone" and so on.
At the same time, the box office of these works is also eye-catching enough, taking "The Gathering Number" and "Tangshan Earthquake" as an example, which exceeded 200 million and 600 million respectively.
At its peak, Huayi Brothers is not only the bearer of the film industry, but also expands its business scope to TV dramas, music records and other fields, with the potential to encircle the entire entertainment industry, and its top stars have signed more than 300, such as Li Bingbing, Fan Bingbing, Tong Dawei, Ren Quan, Xia Yu, Yang Ziqiong, Guan Zhilin, Liu Jialing, Wu Junru, Zhou Xun, Chen Daoming, etc.
In 2009, Huayi Brothers landed on the capital market with the name of "the first domestic film and television stock", with a market value of up to 90 billion.
<h1 class="pgc-h-arrow-right" data-track="56" >02: Playing with capital and binding Feng Xiaogang</h1>
But no one thought that after the success of the listing, Wang Zhongjun, whose wealth soared, was confused by the capital market! We can't wait to implement the "de-cinematization" strategy.
He once publicly explained in front of the media: If Huayi only makes movies and makes money at the box office, then the company will go astray.
In other words, Wang Zhongjun believes that only capital operation is the king of enterprise success!
Therefore, under his leadership, Huayi Brothers invested nearly 150 million yuan to buy 22% of the equity of Palm Fun, spent nearly 700 million yuan to acquire 50.88% of the equity of Yinhan Technology, invested in South Korea's HB Entertainment Company, became the second largest shareholder of Hero Interactive Entertainment with 1.9 billion, and established a joint venture with Russo Brothers...
In this way, Huayi Brothers, who started with movies, blossomed on all sides in the field of investment and became a "film company that does not make movies".
In the end, Huayi Brothers' bamboo basket was empty, not only failed to get the expected return on investment, but also suffered setbacks in the film, giving up the box office champion in 2014.
After that, in order to revitalize the military, the Huayi brothers thought of Feng Xiaogang again.
In 2015, in order to completely bundle Feng Xiaogang into the company's chariot, Wang Zhongjun did not hesitate to buy Dongyang Merah for more than 200 times the price of 1.05 billion yuan, so as to reach a VAM agreement, the content of which is roughly as follows:
Feng Xiaogang must earn 100 million yuan in the first year of acquisition, and since then, the amount has accumulated by 15% year by year, if it is not achieved, Feng Xiaogang must pay for it himself, and the time period is five years.
Not surprisingly, as soon as this gamble was disclosed, it shocked the industry and beyond.
On the other hand, Wang Zhongjun, who signed the agreement, was also relieved, first, he successfully used the system to restrain filmmakers, and second, he could get rid of the film industry and disperse more energy.
However, what he never expected was that this time the bet was a complete loss.
First of all, in addition to movies, Huayi Brothers' other business areas are a mess, and in the five years of the agreement, Feng Xiaogang's film box office was not ideal, and finally paid a total of 235 million compensation.
By the end of 2020, Huayi Brothers has lost money for three consecutive years, with a total loss of more than 6 billion yuan, and the stock price has plummeted all the way, and the market value has evaporated by more than 70 billion yuan in 5 years.
The former VAM agreement was ultimately two losers, and the Huayi brothers were undoubtedly the ones with more heavy losses.
<h1 class="pgc-h-arrow-right" data-track="57" >03: Is it to turn the tide? Or is it a slump? </h1>
Seeing that the Huayi brothers went from glory to decline, and even crumbling, Wang Zhongjun, as the founder, was anxious to sleep at night.
In order to save the crisis, he began to sell personal assets such as art and mansions, hoping to inject more capital into the Huayi brothers.
Even in 2020, the two brothers, who are almost desperate, have pledged more than 90% of the equity in their hands.
However, the Huayi brothers still failed to bring surprises. In the spring of 2021, "Samurai Shodown" and "Sunshine Robber" both hit the street at the box office, even if not talking about the former, which alone made the company lose 150 million.
In desperation, Wang Zhongjun could only completely withdraw from Huayi Tencent Entertainment at the end of March this year and cash out 900 million returns of blood by leaving the market.
But even so, the bad news still followed, first Wang Zhongjun was restricted from high consumption, and then the two brothers became executors together, involving an amount of more than 300 million, and Huayi Brothers was exposed to the current situation of high debt, with interest-bearing debts accumulating nearly 3 billion.
Once a good hand of cards, it turned out to be such a tragic ending!
Looking back at the end of the last century, when China was in the explosive stage of the entertainment field, but the content in the film market was relatively poor. At that time, the Wang family brothers just seized this opportunity to launch several good works and seize the lead in one fell swoop.
Since then, it has steadily occupied the leading position in the industry with continuous high-quality film output.
Nowadays, the decline of Huayi is an indisputable fact, and as a film company, if it wants to save itself or even return to the peak, the key is to maintain its original intention and focus its work on film production.
After all, good movies have never lacked audiences.
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Author: Xiang Nan