Perhaps because they sensed that Westeros Corporation was no longer staying in close contact with Reynolds Nabisco, the Hearsts dragged it out until October 3 before giving Simon an answer to his conditions.
William Randolph Hearst III had no intention of sharing the San Francisco Chronicle's news resources. Instead, he said that Hearst Group's West Coast paper, the Los Angeles Herald, could enter into comprehensive content cooperation with Ygritte.
The Los Angeles Herald sounded like a serious newspaper, but in reality it was much like News Corporation's New York Post, focusing mainly on local incidents and celebrity gossip.
Ygritte positioning in news was as a comprehensive information platform. At this stage its primary audience was the affluent, educated middle and upper middle class, so it pursued professionalism and seriousness in its content.
Though it also carried entertainment news, Simon had no intention of turning Ygritte into a gossip portal.
More importantly, Hearst III's offer of the Los Angeles Herald was meant to keep that paper alive. Hearst Group had originally planned to shut it down after years of poor performance. Now, if the paper could secure financial support through cooperation with Ygritte, it could continue to exist.
In other words, Hearst III was showing zero sincerity.
Simon then took another step back. Through Rebould, he informed Hearst III that Ygritte only needed access to the San Francisco Chronicle's domestic news section. Egret did not need international news, local news, entertainment, sports, and so on.
It was still refused.
On another front, after more than a month of negotiations, America Online finally reached that exclusive agreement with three regional telecom operators: Bell Atlantic, Bell Pacific, and NYNEX.
The talks had been grueling, at one point deadlocking over the buyout price of $1.50 per user.
The three operators banded together and insisted that America Online must pay an exclusive fee of $1.50 per user across their networks, fifty percent higher than the $1.00 figure America Online's team had anticipated.
Just when the three operators thought they had America Online, and the Westeros Corporation behind it, completely in their grip, Steve Case unexpectedly broke the stalemate with a divide-and-conquer tactic. He declared that if they insisted on $1.50, America Online could not afford it and would have to choose only two of the three companies.
All they needed to do was open their lines. Given America Online's current scale, it would cost them almost nothing. In return, they would receive tens of millions of dollars. And a few years down the road, as America Online grew, the pricing could be renegotiated. In truth, the three operators were not as indifferent to this business as they pretended.
After the 1984 breakup, the Bell system was never going to act as one again. Once they confirmed Steve Case was not bluffing, the three ultimately made concessions.
So the final price was set at $1.30.
Bell Pacific, Bell Atlantic, and NYNEX, counting both residential and commercial users, had a combined subscriber base of 23.61 million. The initial total exclusive fee amounted to $30.69 million per year.
In addition, the exclusive agreement term was ten years, only half of the originally expected contract length. The two sides would renegotiate the exclusive fee every two years, and each adjustment could not exceed a fifty percent increase.
After signing, America Online would be able to use the three operators' existing line networks to launch its own internet access service. However, beyond their existing infrastructure, the operators would not provide extra equipment or technical support. If America Online needed those, it would have to pay separately.
On paper, the terms heavily favored the three operators. But as far as Simon was concerned, being able to sign the exclusive agreement at all was already a victory.
America Online's user count had been growing rapidly over the past few months, yet the three operators clearly still had not realized the internet industry's massive potential.
To someone like Simon, who knew what came next, that was almost unimaginable. But just like how Hewlett-Packard failed to recognize the importance of a personal computer invented by one of its employees named Steve Wozniak, the printer giant Xerox made the same mistake. They developed the first graphical user interface operating system, received nothing more than a "very convenient" comment from the company president, and then watched others copy it and build two companies on top of it, one called Apple, the other Microsoft.
In the end, aside from Simon, no one in this world could see the future with such clarity.
Based on the three operators' current subscriber numbers, even if the renegotiated increases hit the fifty percent ceiling five times in a row, America Online's final annual exclusive fee would still be under $200 million. But if it fully absorbed those twenty-plus million users, America Online could earn several billion dollars a year from internet access service alone.
And within ten years, as long as U.S. telecom regulation loosened the way it had in the original timeline, Simon was confident he could make the vine that was America Online turn the tables and swallow the big trees it currently clung to.
Over the past few days, Simon had been discussing acquisition plans with his team for both companies.
Since there was no need to rush, he and Janet were still living at the Greenwich estate each day.
In the blink of an eye, it was Friday, October 5.
Simon had just arrived at Westeros Corporation headquarters in Manhattan that morning when James Rebould followed him into his office with a photocopied newspaper page. "Simon, take a look at this."
Simon sat behind his desk, took the photocopy, and frowned the moment he saw the headline.
It was an article titled "Beware the Emerging Internet Telecom Sector Sliding into a Monopoly Structure," and its target was precisely the exclusive agreement America Online had just signed with the three major operators.
As for the content, the title already made it obvious.
But that was not the most important part. The key was that this article had been published by the San Francisco Chronicle.
After skimming it, Simon shook his head. "The Hearsts don't want to pay any price at all."
America Online was still a company with fewer than half a million users. Forget AT and T, even any one of the Baby Bells was a giant compared to America Online at this moment.
And exclusivity agreements like this were not something America Online had invented. Plenty of companies offering telecom-adjacent services signed exclusivity deals with these giants to preserve their market advantage. Internet access, for now, was still considered an adjacent telecom service.
Yet the San Francisco Chronicle directly slapped America Online with the label of suspected monopoly.
The impact of the old AT and T breakup had not fully faded, and telecom monopoly was still a sensitive topic. Most companies wanted nothing to do with that kind of bad luck.
So the Hearst family's intent was obvious.
Perhaps they sensed Simon's retreat on the ESPN stake, and after rejecting content sharing with the San Francisco Chronicle, Hearst III had lost patience. Instead of dragging it out any longer, he made the warning explicit, demanding Simon withdraw.
James forced a bitter smile. "What do we do now?"
Simon tossed the photocopy onto the desk in front of him. "Call Reynolds Nabisco. We're out."
James looked surprised. "Call right now?"
Simon nodded, his tone flat. "Call. No need to drag it out. If the Hearst family has no interest in cooperating with us at all, then forget it."
James did not want to clash with the Hearsts either. He had been worried Simon might act on youthful pride. Seeing Simon withdraw so calmly, James instead felt a faint resentment toward the Hearsts.
Still, James understood. From today on, the Hearst family had effectively landed on the boss's blacklist.
Only, the Hearsts were not like Daenerys Entertainment's competitors in Hollywood. A century-old family with a vast print media network was simply not someone most people dared provoke.
After James left, Simon calmly began preparing for the morning meeting.
According to the latest news, this week, Matsushita president Akio Tanii had a phone call with MCA chairman Lew Wasserman. Perhaps Matsushita's acquisition of MCA would take an unexpected turn.
If that happened, Daenerys Entertainment would have to move early.
Combining what he remembered with the current situation, Simon felt that in the original timeline, Matsushita's acquisition of MCA had dragged on for months after becoming public largely because there were no competitors. With no one else bidding, Matsushita could take its time and grind it out with MCA.
Now, with Daenerys Entertainment watching like a tiger, Matsushita might not be desperately determined to buy MCA, given Japan's domestic economic situation, but it still likely wanted the deal. It would not keep delaying forever.
All the work on MCA had long been completed in advance. The morning meeting was still about the plan to acquire Bell Atlantic.
Over the past two months, influenced by the Kuwait war, oil prices had continued rising and the U.S. stock market had kept sliding.
Bell Atlantic's latest market capitalization had fallen to the edge of $5 billion. At yesterday's close it stood at only $5.03 billion, down more than ten percent compared to the early days of the war.
Moving now was clearly the best timing.
With ample assets as collateral, Westeros Corporation's team had already solved the funding problem. Several banks they had contacted discreetly were willing to provide a combined total of $10 billion.
A loan request of that size could not stay hidden in financial circles.
So the banks had tested Simon more than once, probing whether he intended to rely entirely on borrowing to acquire companies while leaving that huge overseas sum where it was.
The suspicion was reasonable.
Repatriating overseas assets required paying a one-time capital gains tax of twenty-eight percent. By comparison, borrowing carried an annual interest rate of around five percent. If the overseas funds could be managed properly and produce even ten percent a year, the strategy would be very cost-effective.
Simon had considered it.
In the end, he abandoned the idea.
On one hand, in the coming years, outside North America there would not be many markets capable of absorbing tens of billions of dollars in investments that could deliver adequate returns.
On the other hand, that money, more precisely the tax he would pay when bringing it back, was a bargaining chip. A chip that could help push the federal government to approve his acquisition plans.
After all, a one-time capital gains tax payment on the scale of two billion dollars was not something a federal government drowning in deficits could casually ignore. If the federal government refused to allow Simon to launch acquisitions of both MCA and Bell Atlantic, Simon would certainly continue keeping the money offshore. That was not what the federal government wanted to see.
"We've already purchased 2.7 percent of Bell Atlantic's stock," James said when he and Simon had lunch together. "We can reach 4.9 percent before the end of the month. But with Bell Atlantic, our biggest issue is still management. If we can get cooperation from Bell Atlantic's chairman and CEO, Raymond Smith, then with sufficient funding, this acquisition should go very smoothly. Given the current economic environment and Bell Atlantic's nature as a company, I don't think there will be any other bidders jumping out to compete with us."
Simon nodded. "Wait until the end of the month. If the timing is right, I'll meet Raymond Smith personally once."
James said, "Raymond Smith is very interested in literature and theater. The two of you will definitely get along."
Simon had already read the profile the company collected on Raymond Smith. "That alone isn't enough. If he agreed to the Westeros acquisition of Bell Atlantic just because we share a few topics, I'd have to consider whether we should keep him after the acquisition."
James said firmly, "Raymond Smith's ability is beyond question. But if you don't expect shared interests to help open the door, then we'll have to work a lot harder ourselves."
Simon smiled. "A deal worth several billion dollars. If everything goes too smoothly, I'll start wondering if I've walked into a trap."
They talked as they ate. After lunch, Simon followed his schedule to Daenerys Entertainment's East Coast headquarters in Greenwich Village. He had been away from Los Angeles for a week, and a pile of matters from Hollywood had accumulated for him to handle.
He arrived around one in the afternoon and stayed busy until nearly four. After clearing most of the week's backlog, Simon leaned back in his leather chair and picked up a production proposal for an Antarctic documentary under Highgate Pictures.
This was prompted by what Janet had promised little Gemma during lunch at Sophia's home last week.
Janet had only planned to have someone going to Antarctica shoot a few tapes for the girl. But Simon remembered the documentary that would break box office records, March of the Penguins, and he began considering a proper Antarctic documentary.
He did not know Antarctica well, so he planned to test the waters with a normal documentary first, train the team, then bring out a full plan based on what he remembered of March of the Penguins.
The Northern Hemisphere was already in autumn, but the Southern Hemisphere was in spring.
If they started preparing now, they could go into Antarctica during the Southern Hemisphere summer and finish filming by the end of autumn.
As he read the proposal, Simon suddenly thought of Sophia again.
Sophia had been in Manhattan these days preparing for tomorrow's Saturday Gucci brand event. Simon's work for the day was already done.
After hesitating for a moment, Simon dialed her mobile number.
They chatted casually for a bit. She did not seem too busy either. Simon asked whether she wanted to come have coffee together, and she reminded him that he had quit coffee a long time ago.
Then it got a little awkward.
After that, Simon simply put on his boss posture and told Sophia to wait for him at his penthouse on Lexington Avenue, since there was something to discuss.
Sophia asked what it was.
She looked determined to get to the bottom of it.
That could wait until they met. A boss could always find work for an employee to do.