Hollywood Art: System of sunnys
568. camouflaged ambitions.

January 9.

One of the most intense periods for every entrepreneur in the business world was approaching: tax season. Filing the return was just a brief inconvenience, but his revenues were high, and his profit margins were deep.

–So that’s good, right? –Billy asked.

–Better than good. We have a 20% deduction on payments we make through our partnerships with universities for research and development in robotics and technology, which, according to our accountants, helps stimulate innovation. We reduce taxable income through credits. Debt is wonderful when you know how to use it to offset revenue. And with our recent expansions into sports teams that offer athletic scholarships, it clearly shows we aren’t generating substantial profits… Luckily, our firm is a real devil when it comes to tax planning. –Raimon said, laying out the good news for Billy.

First, they used a maneuver skirting legality: amortizing the depreciation of properties while offsetting revenue with a $500 million loan intended for the acquisition of American football, basketball, hockey, and volleyball teams, as well as the construction of a tennis stadium and a full sports center.

They paid 10.2% in corporate tax, and for the film industry, they added the California state tax, which brought the total to 17%. But declared revenues were only half of actual income, and after several deductions, it was fervently demonstrated that the payment made was justifiable. Still, the total tax bill hit $179 million, which was outrageou, —because his earnings were double that amount. But the accountants? The real kings of Hollywood.

As for the wealth tax, his assets totaled $22 million, including some personal stock holdings. With debt under his name and a few other accounts, he ended up paying $2.47 million—the bare minimum allowed. All thanks to the strategic use of foundations to promote philanthropy and reduce tax exposure.

–Alright, it doesn’t sound that hard to pay. Let’s get it over with. Now, about the stocks—do you have something in mind? –Billy asked. He’d paid taxes on $16 million worth of stock, though the rise in share value had delivered quite a punch, close to 30% growth. Spread across investment firms, Lux Animation, and some under his name, the taxes varied delightfully.

–I do. Based on everything you’ve been working on, I haven’t stopped increasing our positions. This will be the last year—if what you’re predicting comes true… AOL is going down, and it won’t be pretty. They’re the Death Star, and you’re Luke Skywalker with the Force, ready to blow them up in one shot. We have great positions. Played right, with shorts and puts, they’re dinosaurs. But I suspect something similar to what happened in the ‘90s with Russian companies and the USSR will unfold—but this hit will be more vicious. –Raimon said.

–That’s exactly what I’m thinking, and I’m not afraid to say it: 2001 is going to be the year the world changes. –Billy added, taking a breath.

–I was a bit thrown off when you suggested selling Yahoo, Excite, and Jumpies. A lot of people I know see that sector as the future of investing. –Raimon whispered, adjusting his beard.

–Doesn’t matter. I’m just going to make money. I plan to buy a film company with a full movie library. –Billy said. His next move was to break into the battered film sector, which, despite its growth, was facing several issues. Still, he intended to manage the risks by leveraging Netflix to break into the subscription market, acquiring a company capable of financing high-risk films.

He only needed small equity stakes in companies like Lionsgate, Regency Enterprises, A24, and another major studio. A plan that had to be played carefully, given the high-risk nature of those companies.

–This is confidential… You know I’m terrible at keeping secrets. If it’s confidential, please don’t blame me. –Raimon said.

Billy raised an eyebrow. –It’s not confidential. Just a hypothesis. Even if everything goes perfectly, we don’t have the capital to buy a company like that. I don’t have much cash on hand. Besides, with Lucasfilm closing the deal in June, I don’t see us having much wiggle room in the next few years. –

–Ohhh, alright, I’ll focus on making money while we sort things out. –Raimon made a silly face. –I mean, you did promise me a role in Star Wars, but they didn’t need me much in the first one. I think I deserve a part this time—even just one line. –

–Maybe in the Pixar series. George Lucas is sensitive about his franchises, and while he might include you, he can’t give you what you want. Spielberg’s the one running that show. –Billy replied.

Raimon sighed, trying to hold in the air—a dream just inches from coming true. His acting chops were a mess, but when you have no opportunities, you take what you can get. The satisfaction of doing something is often enough.

–But it might not be so far-fetched if you take an acting course and audition for a future series. We’re planning to expand and build out some new shows. After all, we already have several ecosystems within the main production center. –Billy explained. He was already envisioning how to bring to life the next nine movies, all crafted carefully from the grand halls of the Republic, the destroyed Jedi Temple, the corridors of Corellia, Alderaan, Naboo, Tatooine, starships, Kessel, Dathomir, Geonosis, Yagoba, Yavin, Bespin, and Kamino—created in rooms the size of cinema halls or spread across multiple connected sets with the use of green screens.

The complex could host 6,000 people and covered six acres of development. Five floors tall, with a food court on the fifth floor filled with Billy’s brands and a few others yet to be revealed. It had seating for 600 people and small food stalls on the ground floor.

–So, another deal then. Hopefully, I can be more relevant this time. –Raimon said, thinking about how he might perform.

Raimon stretched as the two wrapped up the meeting, raising a hand to signal they wanted something that wasn’t a drink. Billy received the portfolio copies but was too exhausted to read through the status of the stocks.

• Coca-Cola: 469,870 shares.

• WorldCom: 15,333,500 shares.

• Disney: 1,938,000 shares at $21.

• Walmart: 856,450 shares.

• Home Depot: 1,843,875 shares.

• McDonald’s: 130,227 shares. +34,000 (1994) +3,789,000 (1995) +400,000

• General Electric: 34,930 shares (Jan 1991) +430,000 (Mar 1991) +634,000 (1994) +700,000 +11,000 +5,400 +9,000 +511,397 (Aug 1995) +754,000 (Nov) +1,020,300 (Jan) // Total: 4,109,677

• Cisco Systems: 10,400,231 shares.

• Intel: 468,213 shares +6,870,000 (1995) +3,000,000 (1996) +34,500

• Oracle: 490,000 shares +5,410,000 +1,500,000 +4,700,000 +2,340,000 // 12%

• Sony: 150,000 shares.

• Microsoft: 9,435,670 shares +4,040,000 +8,008,800 // 17.69% – diluted to 8.7%, buys 1,300,240 at $2.1 +1,890,000

• Sun Microsystems: 3,125,000 +2,345,000 +1,000,000 +4,000

• Berkshire Hathaway: 1,235,000 +340,000

• AOL: 534,000 +5,600,000 +3,456,986 +12,340,123 // Owns 14% of the company +3,000,000 +200,000

• Qualcomm: 3,450,000 +4,333,930 +3,000,000 +500,000

• Nokia: 4,700,000 +4,800,000 (third round) +5,600,340 +4,500,000 +3,400,340 +5,000,000

• Lotus Development Corporation: 2,233,943 +3,400,689

• The Cheesecake Factory: 9,435,000 +12,000,000 +10,000,000

• Yahoo: 17,345,000 +3,560,670

• Marvel: Owned.

• Toys.com: 1,200,000 +600,000 +700,000 +560,000

• Pfizer: 300,000 +300,000 –7.23 +3,000 +5,000 +349,034 (1996)

• Amazon: 900,000

• Starbucks: 8,000,000

A market share that was simply a stunning example of how one person could distribute all their earnings across different sectors. Sometimes buying in extremely low, like with Yahoo, where the first $500,000 stake gave him 60% of the company, later diluted to 31%. But its value only kept rising, and the number of shares was no joke.

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