Hollywood's power structure is deeply intertwined and cannot be judged simply by someone's official title.
In most cases, to understand a person's overt and latent power, one has to look at which tier of Hollywood they report to. If the president of a major studio reports directly to the parent company's top executives, his real authority may rival that of a CEO. As for directors at Spielberg's level, because they can communicate directly with figures like Steve Ross, their hidden influence can even surpass that of a major studio's CEO.
Robert Rehme's proposal did not surprise Simon.
In present-day Hollywood, Disney CEO Michael Eisner and President Frank Wells exemplified this kind of parallel relationship. Both reported directly to Disney's board of directors. Although Michael Eisner ranked one level higher in title, he had no supervisory or appointment authority over Frank Wells. Each had clearly defined responsibilities of his own.
According to Simon's memories, this clearly divided yet mutually balanced power structure played a crucial role in Disney's rapid rise from the late 1980s to the early 1990s.
In the mid-1990s, Frank Wells died in a helicopter accident. Michael Eisner then began to centralize power, aggressively purging dissent to maintain his control over Disney. Intense internal strife gradually dragged Disney into mediocrity during the latter decade of Eisner's rule, until the company regained its vitality in the era of Robert Iger.
Taking all of this into account, Simon did not hesitate for long before agreeing to Robert Rehme's request.
For publicly listed companies with dispersed ownership, parallel executive structures often lead to internal power struggles. But Simon was not worried about that at all at Daenerys Pictures. He held absolute control over the company. If executive infighting ever emerged, he had more than enough authority to remove destabilizing elements at any time.
Once that was settled, the two moved on to discuss Robert Rehme's compensation.
Daenerys Pictures was developing rapidly, with astonishing profit potential. Naturally, Simon could not offer Rehme a profit-sharing arrangement like the one he had promised Amy in the early days.
However, Simon was not stingy either. They agreed on a three-year contract. In addition to the same base annual salary of $250,000 as Amy, Simon also approved a performance-based bonus of up to $3 million per year, with the exact amount determined by Rehme's operating results.
Even in Hollywood, among the major studios, only a handful of executives earned more than $3 million annually. Daenerys Pictures, even after integrating New World Entertainment, could only be considered a second-tier studio. As such, Robert Rehme happily accepted the offer.
Similar compensation structures were common in Hollywood. The specific criteria for evaluating Rehme's performance would be negotiated by both sides' lawyers based on established precedents.
After finalizing these terms, Robert Rehme began speaking candidly with Simon about New World Entertainment's operations and its various problems.
New World's primary difficulties were still a lack of capital and the Hollywood writers' strike, which had prevented the company's television projects from entering preproduction as scheduled. In addition, Rehme proactively disclosed that New World likely had around $20 million in various types of hidden debt.
The figure did not exceed Simon's expectations, and it was within his tolerance.
Since he had already decided to acquire Marvel, Simon had no intention of creating complications over this issue. After all, such practices were common in Hollywood entertainment companies seeking to make their financials look healthier, and did not involve shareholders or management lining their own pockets. As long as New World could resume normal operations, this debt could eventually be absorbed by the company's robust cash flow.
They talked for more than an hour before Robert Rehme finally took his leave.
After seeing Rehme out and sitting back down behind his desk, Simon heard a knock at his office door. It was Amy.
"Simon, these are the preliminary sponsorship contracts I've negotiated with Mars, AT&T, and others. Five companies in total. From the first season of Who Wants to Be a Millionaire, we can receive a total of $56 million in advertising placement fees. And here are the loan proposals from Wells Fargo, Citibank, and several other financing institutions. I think Citibank's plan is the best: a seven-year loan of $250 million at an annual interest rate of 4.6%. Wells Fargo offers a 5% rate, but only a five-year term. Although Citibank's plan will cost us an additional $20 million in interest, it significantly reduces our annual repayment pressure."
Simon glanced at Amy's composed expression, smiled faintly, and opened the loan proposals for Daenerys Pictures' acquisition of New World Entertainment.
Although he had always been resistant to taking on debt, Simon had no choice but to rely on financing for this acquisition.
After quickly reviewing the two proposals, he saw that under Wells Fargo's five-year loan, Daenerys Pictures would pay a total of $60 million in interest. Under Citibank's seven-year plan, total interest would reach $80 million.
In both cases, interest alone exceeded 20% of the principal, making it easy to see why highly leveraged companies like New World Entertainment were so vulnerable. Once operations faltered, annual profits might not even cover interest payments.
In this transaction, General Electric had already taken the initiative to forgive a substantial portion of interest.
While borrowing was expensive, it was also an inevitable path for companies seeking rapid expansion. Moreover, thanks to Daenerys Pictures' strong profitability, its financing costs were already relatively low. Many companies wanted loans at even higher interest rates but could not secure them.
Simon also understood Amy's state of mind. After flipping through the documents for a moment, he took the initiative and said, "I've already spoken with Robert Rehme. He'll be staying."
Amy's eyes flickered briefly. She nodded and waited for Simon to continue.
Without much pause, Simon went on, "You know, Amy, we already reached an understanding at that dinner at Robert Iger's house. So Iger will also be joining Daenerys Pictures. My plan is to adjust your position to CEO, mainly responsible for daily administration and film production. Robert Rehme and Robert Iger will both serve as presidents. Rehme will oversee film distribution, and Iger will take charge of television."
Hearing this, Amy finally relaxed.
Lately, she had found the past year and more almost unbelievable. A company that had been founded less than two years ago had grown under her management into a top-tier second-line studio, something she had never imagined before.
Setting everything else aside, even the compensation contract she had originally negotiated with Simon had now reached a staggering value.
Her contract began in March of last year, for a term of four years, ending in March 1991.
She was now in her second year.
Last year, Daenerys Pictures was still in its startup phase. The revenue from Run Lola Run was not included in the contract period, so only Final Destination contributed to profit sharing, and her earnings were not particularly high.
But this year, with a 5% share of the company's net profits, based on Daenerys Pictures' performance so far, even if all projects in the second half of the year underperformed, the revenues from When Harry Met Sally, Pulp Fiction, Who Wants to Be a Millionaire, and Survivor alone would bring her no less than $10 million.
Including the equally valuable deferred equity incentives stipulated in the contract, Amy's annual income this year would exceed $20 million. In all of Hollywood, aside from top executives at the Big Seven who actually owned company shares, no pure professional manager earned more than $20 million a year.
At times, even Amy herself wondered whether she was really worth that much.
Recently, that doubt had turned into anxiety.
After all, if she could earn $20 million this year, what about next year? If Daenerys Pictures maintained its current growth rate, her income would be even higher.
Simon certainly could not avoid paying this year's compensation.
However, under the original contract, if Simon no longer wanted to shoulder her enormous salary, he could let her go by paying just a $1 million penalty.
Sometimes, Amy thought that if she were in Simon's position, she might well do exactly that.
Such a staggering salary was enough for Simon to recruit managers far more accomplished than her. The acquisition of New World Entertainment only intensified her worries, because she realized that New World's current CEO, Robert Rehme, surpassed her in credentials in almost every respect.
From the moment Simon finalized the deal with Jack Welch and others, Amy had been afraid that Simon would replace her with Robert Rehme.
Across the desk, Simon noticed Amy's nod and the visible relief in her expression, then continued, "By the way, Robert raised one more condition. Although his position will be below yours, he wants to report directly to me personally. I agreed. And once Iger joins, he'll likely do the same. Your seniority makes it difficult to fully command them, and you know that. So I hope you can accept this arrangement and work collaboratively with the two of them."
Amy was a little surprised, but she quickly agreed. After a moment's thought, she added proactively, "Simon, since we're adjusting positions, I think I can sign a new compensation contract."
Simon turned a page in the documents, glanced up at her, and smiled. "Are you dissatisfied with your current compensation plan?"
Hearing the teasing tone beneath his relaxed manner, Amy wanted to roll her eyes at her young boss, but held back. "What I mean is, the current compensation is too generous. I could take less. About, um, 2% would be fine."
"There's no need," Simon shook his head. "Amy, you took a huge risk leaving your position as a vice president at Fox to work for a rookie like me. Over the past year and more, you've worked almost seven days a week without a single vacation. As your boss, I can honestly give you full marks. I've always believed that diligence is more important than talent. Without you managing this company, Daenerys Pictures could never have reached its current level on my efforts alone. You absolutely deserve this compensation. Of course, once your contract expires, Daenerys Pictures will be even bigger. If you still plan to stay, I won't offer such a high profit-sharing clause again."
After easing Amy's concerns, the two turned their attention back to the documents in front of Simon.
Over the following days, Daenerys Pictures' audit of New World Entertainment continued, and another week of the North American summer box office quietly passed.
From July 8 to July 14, the most talked-about event in Hollywood was undoubtedly Pulp Fiction surpassing $100 million at the box office.
In its sixth week, Pulp Fiction earned another $9.87 million, bringing its cumulative gross to $105.66 million, making it the second Daenerys Pictures release of 1988 to cross the $100 million mark. With this milestone, many eyes turned to Basic Instinct, set to open on July 15, curious whether it could take over the momentum and join the $100 million club as well.
During this period, media discussion around Basic Instinct never let up.
In the final week before release, a Los Angeles tabloid reported that leading man Michael Douglas had refused to attend promotional events due to a dispute over a poster design, once again drawing media attention.
As the release approached, Fox rolled out massive multi-story posters for Basic Instinct in prime downtown locations across major North American cities. One even appeared in New York's Times Square.
However, in this poster, Michael Douglas, the newly crowned Best Actor and undisputed male lead of the film, was completely absent. The entire image featured only the female lead, Linda Fiorentino, sitting cross-legged on a sofa like a queen, dressed provocatively, holding a cigarette, chin slightly raised, her expression dangerous and arrogant.
Anyone familiar with the original Basic Instinct would vividly remember the interrogation scene in which Sharon Stone sat cross-legged on a sofa, briefly exposing herself. Many "hardcore fans" even paused the footage frame by frame, though in reality nothing could actually be seen.
Yet that moment was talked about for years.
The remake of Basic Instinct would still include this scene, and under Brian De Palma's direction, the shot was no less provocative than Paul Verhoeven's original. To stir up as much controversy as possible, Simon had deliberately prepared this poster.
Thanks to the film's intense market buzz, Fox further expanded its release. When Basic Instinct opened on July 15, it ultimately debuted on 1,776 screens.
As expected, upon release, Basic Instinct triggered even fiercer media controversy.
Moreover, compared with Simon's previous works, which had all sparked discussion but were ultimately praised for strong scripts—whether Run Lola Run and Pulp Fiction directed by Simon himself, or The Butterfly Effect and Final Destination directed by others—this time, in the eyes of many, Basic Instinct was nothing more than a blatant erotic film.
A movie filled with extended sex scenes and little else, it was quickly labeled Simon Westeros's worst work to date, even drawing condemnation from many of his own fans.