Chapter 162: Salary Discussion

“There’s nothing like that. The main reason for inviting you here this time is to discuss salary matters!”
Zou Wenhui stared intently at Xiao Ran, his expression as if Xiao Ran had stolen hundreds of millions from his pocket. Wu Siyuan truly regretted sitting in this position—not to mention Yang Qi and Pan Disheng, but Zou Wenhui and Xiao Ran were by no means easy to deal with, leaving him in a terrible dilemma.
Unfortunately, there weren’t many people in the industry who were respected, popular, and experienced, and Wu Siyuan was exactly such a person. Thus, for now, no one else could take his place. It seemed he had no choice but to continue feeling frustrated.
Xiao Ran was momentarily stunned before realizing Zou Wenhui was referring to the issue of actors’ and crew members’ salaries. Understanding this, he suppressed his urge to laugh. It wasn’t surprising that these people were so short-sighted. Still, the salaries at Shadow were somewhat exorbitant.
The highest-paid male actor in Hong Kong currently was Fa Ge. Thanks to films like *A Fairy Tale in Autumn*, *Prison Storm*, *Hidden Flowers*, and *Espionage Crisis*, he had a considerable number of fans in Europe. In Southeast Asia as well, Fa Ge was one of the most box-office appealing actors.
Therefore, Fa Ge’s salary was astronomically high—reaching up to four million, not including profits. Cheng Long’s salary was only two and a half million at the moment. Of course, since Cheng Long’s Weihe was a subsidiary of Jiahé, their incomes were roughly the same.
But how many actors in Hong Kong could start their own film companies like Cheng Long? Perhaps Fa Ge in the past could be counted as one, as he co-founded Yinjiang Film Company with Lin Lingdong. But now, Fa Ge clearly didn’t have the energy to deal with such things. After all, it was better to focus on improving one’s acting skills and leave other matters to others.
Currently, the salaries of top stars in Hong Kong ranged from one to two million, with even Zhou Xingchi’s current earnings at only eight hundred thousand. It was clear that joining the million-dollar club wasn’t easy. Among female actors, only Lin Qingxia and Zhong Chuhong had reached this figure. Probably, only a handful of all film actors in Hong Kong could match this salary level.
Compared to Hollywood, this figure was naturally low. But don’t forget—it was Hong Kong. And don’t overlook the fact that when Shadow was first established, the highest-paid person in Hong Kong was only in the millions.
In just two or three years, actors’ salaries had increased several times over—something even a blind person could see was driven by Shadow. No wonder the three major companies couldn’t withstand it and wanted to confront Xiao Ran to discuss cutting salaries.
If it had been before, a year after Shadow’s establishment, Jiahé would surely have used its dominance to suppress Shadow. But now, even fools knew that although Jiahé still appeared to be the largest company in Hong Kong, Shadow had surpassed it in terms of assets, market share, and even box office revenue. Shadow was truly Hong Kong’s number one film company.

So, Zou Wenhui neither dared nor could do anything to Xiao Ran; he could only rely on the power of the Film Association to put pressure on Xiao Ran, while also allying with Tianluo and Debao. Xiao Ran wasn’t resentful that Yang Qi also sided with Jiahe in this matter—after all, the pay increases were too drastic. Since “Spy Change,” Stephen Chow’s fees had nearly doubled instantly. At such a rate, other companies surely couldn’t keep up.

As is well known, Hong Kong films of this era have always relied on low costs to reap huge profits. But with rising actor fees—take Stephen Chow, for example—according to Xiao Ran’s rule that an actor’s fee should account for no more than one-quarter of the budget, this meant that films starring him required a production cost of at least 20 million. Adding the fees of other actors, proportionally increased, a mere 30 million in production costs was quite common.

Yet, don’t forget that this is just the production cost—add in marketing expenses, insurance, legal fees, and so on. The total figure would definitely exceed 35 million. Even if they tried to cut costs drastically by ignoring these ratios, the overall cost would still be at least 25 million.

How many films in Hong Kong have a production cost of over 20 million? In 1988, aside from one film starring Cheng Long, only “Spy Change” reached this figure. And don’t forget that last year, even large-scale productions had budgets of around 8 million.

Don’t think that increasing actors’ fees by Shadow Company has no impact on other companies—on the contrary, the impact is enormous, driving industry-wide fees to Shadow Company’s level. It’s like when Sony acquired Columbia, suddenly offering Jim Carrey the world’s first salary exceeding 20 million.

The result was that other film company executives complained bitterly, as they were forced to raise their prices in response to Sony’s increases. Faced with internal competition, it’s no wonder Sony had to pay billions of dollars in Hollywood before starting to turn a profit.

However, Shadow Company isn’t Sony. If Xiao Ran wants to raise fees, other companies simply don’t dare confront him. Their only goal now is to exert pressure on Xiao Ran in the name of all companies in Hong Kong, determined to keep his fees down. Wu Siyuan is here today representing those other companies.

Realizing this, Xiao Ran couldn’t help but smile. He thought he had found a way to defeat other film companies in the short term: by raising actor fees. With higher fees, costs increased, and other companies’ films wouldn’t have as broad a market as Shadow Company’s. This meant higher costs and expenses, yet unchanged revenue, resulting in low profits.

The consequences of low profits, or even losses, are obvious. In fact, Xiao Ran was well aware that there were many reasons for the decline of Hong Kong films, one of which was excessively high star fees—often in the millions—while the market simply couldn’t support that level. Naturally, this led to drastically reduced production costs, making low-quality films all too common.

But Xiao Ran knew better—that Fa Ge’s worth of 4 million was absolutely worth it. In today’s Hollywood, just based on the nearly one billion in box office earnings from “Spy Change,” Fa Ge’s salary should already make him a top-tier star. The size of the market determines the value of stars; it’s inevitable.

As Xiao Ran couldn’t help but smile, Pan Disheng spoke in a cold tone, “A Ran, Shadow has raised industry prices too much, which can easily disrupt the market. We all agree that salaries must be brought down.”

Xiao Ran didn’t take it to heart at all. Even if all the film companies in Hong Kong joined forces to boycott Shadow, he wouldn’t fear it. After all, Shadow was already somewhat above Jiahe, and raising salaries was something stars and filmmakers would welcome. Who would be foolish enough to oppose such a popular and powerful company?

This was also why the three major companies tried to negotiate amicably with Xiao Ran. His gaze shifted to Yang Qi, who seemed to support this approach as well! Xiao Ran smiled broadly, delightfully, leaving the others stunned.

Originally planning to walk away due to these people’s stupidity, Xiao Ran sighed. Now, these were the only companies in Hong Kong with any distribution capabilities. If they disappeared too, he would have no base when entering Hollywood, and might even be assimilated by the powerful Hollywood industry.

After hesitating for a moment, he stood up and looked earnestly at the three bosses. “All four of our companies have distribution capabilities in Southeast Asia. The average investment per film is now 4 to 5 million. After distribution, how much profit can such a film generate? Under normal circumstances, it can earn three times that amount—over 12 million.”

“Do you really think such profits are normal?” Xiao Ran suddenly felt sad. Scanning the ignorant group, he said gravely, “When profits are high, we should invest them to expand the market, not just focus on making money. Otherwise, we’ll lose the market in the long run.”

No one spoke; only heavy breathing could be heard. Xiao Ran truly found it exhausting to talk to these people, but he still had to persuade them for the future of Hong Kong films. “Hong Kong films currently account for less than 20% of the Southeast Asian market. Do you think it’s impossible to expand further? Actors are worth far more than this, and I still think I’m paying too little!”

Still, no one spoke, as if everyone was pondering his words. Xiao Ran’s gaze lingered on Yang Qi’s thoughtful face. If even Yang Qi didn’t understand him, then there was really no hope. “Last year, Shadow spent an average of 8 million per film but made more money than before. Do you want to know how much this year? It’s 12 million! Is 4 million or 5 million enough for you?”

The 12 million Xiao Ran mentioned didn’t include marketing costs, and it was even a figure comparable to those of newer films. This year, Shadow planned to produce at least 40 films, with 10 of them costing over 20 million each.

Xiao Ran and Wei Dongling had indeed worried about the issue of acting fees, but the problem wasn’t the fees themselves—it was the imbalance. The gap between movie actors and TV actors’ earnings was widening. The U.S. television industry was highly developed, thanks to its large domestic market, while the main market for Chinese television was actually the mainland. Yet, Xiao Ran had little hope of the mainland opening up its television market.

Chinese TV stations could hardly reach Southeast Asia, whereas U.S. TV stations faced no language barriers and could easily enter Europe without issues. As a result, ratings determined the incomes of actors and hosts. But since the mainland couldn’t be opened up, the television industry couldn’t see significant growth.

Meanwhile, movie actors’ incomes were soaring, creating a situation where movie actors were more sought after than TV actors—a situation that would eventually become distorted. After discussing it, Xiao Ran and Wei Dongling still believed this might be a viable way to train actors—having new actors gain experience in TV dramas before becoming movie actors. The issue could only be temporarily resolved reluctantly, but it still existed.

Hearing Xiao Ran’s sincere and heartfelt words, Yang Qi and Pan Disheng exchanged a glance. They hadn’t originally intended to resist this idea; they had been pressured byJiahe translates to Jiahe.. After all, the success of “The Phantom” was right before their eyes, and “Espionage” had set a record as the highest-grossing Chinese-language film.

Yang Qi and Pan Disheng had already reaped some benefits by following Xiao Ran’s approach—securing distribution rights and even imitatingJiahe translates to Jiahe.’s corporate structure. Of course, they knew it was unlikely for Xiao Ran to make such a self-sabotaging decision. With Xiao Ran’s brief explanation, they roughly understood his intention.

Thus, their expressions relaxed as they sipped tea leisurely before saying with smiles, “We agree with President Xiao. It’s time to raise the acting fees! Their worth should be determined by the market, not decided by a meeting of ours.”

Xiao Ran breathed a sigh of relief—not because he had allies, but because these two had finally come around. Only Zou Wenhui remained lost in thought. He was truly an extraordinary person. Old Shao had dominated Hong Kong’s film industry for decades and was known as a film magnate, yet he was overthrown by Zou Wenhui and Ho Kwan-chang in just ten years—proof of his exceptional talent.

Zou Wenhui’s thinking was simple. He knew it was too difficult to compete with Hollywood, especially when it came to financial resources. So he had always aimed to maintainJiahe translates to Jiahe.’s dominance in Hong Kong, but that was preciselyJiahe translates to Jiahe.’s fatal flaw.

Although he did often expand into or invest in overseas markets, those were usually short-term investments. The disastrous failure of Shaw Brothers served as a lesson and also acted as a psychological barrier preventing him from fully entering overseas markets. For him, raising acting fees in a small market like Hong Kong would make it impossible to sustain operations in the long run.

He completely disagreed with Xiao Ran’s nonsense, believing that Hong Kong films had no chance of competing with Hollywood. But circumstances forced him to raise fees anyway. This meeting against Xiao Ran ultimately became the prelude toJiahe translates to Jiahe.’s decline.

Seeing Zou Wenhui nod silently, Xiao Ran knew he had won against Jia He once again. But if Jia He still refused to make an effort, Xiao Ran would surely remove this obstacle without hesitation.
The meeting wasn’t over yet. Xiao Ran sat down, rubbed his nose, and smiled, “That’s settled regarding the actors’ salaries. But I’d like to know what everyone thinks about the salaries of the other staff members.”
Yang Qi and Pan Disheng were stunned. They had heard rumors that at Meiying, the salaries of behind-the-scenes staff were much higher than those in other companies. Yet almost no one knew the exact figures, especially the directors, who were even less aware.
Seeing their stunned expressions, Xiao Ran realized this matter might not be easy to handle either. At Meiying, the highest-paid director was Xiao Ran, at eight hundred thousand plus a 5% commission—likely the highest-paid director in the entire region.
Next were Wu Yusen and Xu Ke, both earning eight hundred thousand but without a commission. One should never underestimate this commission, as its scope is quite broad. Take Xiao Ran for example—he received a 5% commission, so the key to determining how much he got lay in the base amount of that commission.