Who will take the top position in LeEco's precarious situation on the eve of its restructuring?

On July 7, one of China's four largest asset management companies, which was considering restructuring LeTV's debt, suddenly received an email from the group headquarters asking it to check LeTV's debt risks.

AMC, which is likely to serve as a lifeline, is taking a wait-and-see attitude, which has caused anxiety among the management who have held out hope for LeTV.

At the Delta Center where LeEco's office building is located, the Economic Observer reporter saw that the employees who were still working at LeEco were worried. One salesperson was worried that advertisers who placed ads on LeEco were at risk of being inspected, or that HR would talk to him.

A LeEco executive told the Economic Observer on July 10 that he remembered the company's HR saying in past training that employees who advance money for the company at this stage all have a partnership spirit. But when he thought about the amount of money he had advanced for the company, he felt emotional.

However, when he passed by the entrance of LeTV Building, he was still treated with great courtesy by the headhunters who stayed there. A few days later, he was "optimized" by LeTV.

Everyone knows that LeTV is short of money, but they don’t know what to do, especially how to restructure LeTV.

The Eve of the “717” Power Change

On July 6, 2017, Jia Yueting resigned as the chairman of LeTV. To some extent, YT Jia was "optimized". "Old Jia (Jia Yueting) is the tragedy of this era. His blind running and ecological counterattack are particularly like the language of pyramid schemes. He was coerced by capital and had to run blindly." A LeTV management who resigned on July 12 said. "Sun Hongbin invested more than 13 billion yuan, of which more than 9 billion yuan was used to release the stocks frozen by the bank. The funds that can be invested in the business level are more than 3 billion yuan. How to turn over the business?" said the aforementioned LeTV management.

This situation may change after Jia Yueting resigns as chairman of LeTV.

On July 17, LeTV will hold an interim shareholders meeting to elect a new chairman. In the eyes of many LeTV employees, Sun Hongbin is the most likely candidate to become the new chairman of LeTV, judging from his ability and qualifications. "Jia has a large shareholding, but he has pledged LeTV shares more than 1,200 times, and some of his shares have been frozen. Sun Hongbin is the most suitable candidate for chairman of LeTV," said a LeTV executive who is dealing with debt issues.

However, whether Sun Hongbin serves as the chairman of LeTV or not, he faces the primary challenge: how to lead LeTV's 60 billion yuan asset restructuring before LeTV resumes trading on October 18, 2017, and avoid the risks of stock liquidation and explosion.

LeTV Pictures IP Strategy

A reporter from the Economic Observer learned that in the face of a strong run on LeEco's assets, layoffs, multiple funds lowering their expectations for LeEco's stock, and Jia Yueting's 519 million shares being frozen, the total amount of funds raised by LeEco's assets will have to be adjusted, the price of the target assets in LeEco's asset restructuring will be lowered, and the number of shareholders of the target company will increase.

Currently, LeTV's restructuring target is LeTV Pictures. At the market level, major institutions and media value LeTV Pictures at around 6 billion yuan. Combined with the market value of LeTV.com, this is an asset restructuring involving more than 60 billion yuan.

After Sun Hongbin entered the LeEco system, the LeEco system was divided into two parts: the Sun Hongbin system and the Jia Yueting system. The previous layoffs in LeEco came from the LeEco holding system controlled by Jia Yueting, such as LeEco Sports (70% layoffs), LeEco Mobile (70% layoffs), LeEco Finance, LeEco Auto, etc. Sun Hongbin invested in LeEco.com, LeEco Pictures and LeEco Zhixin. The latter three companies are the most important sources of cash flow in the LeEco system and have not experienced large-scale turmoil before. Among them, LeEco Pictures is a company with good cash flow in the LeEco system, and has never defaulted on employee wages or stopped paying employee social security.

However, according to a reporter from the Economic Observer, personnel optimization work around LeTV's listing system has also begun. Currently, the proportion of personnel optimization at LeTV and LeTV Pictures is both above 10%.

Behind this is a deep-level adjustment at the strategic level.

The aforementioned LeTV management told the Economic Observer reporter that LeTV's current sales system is almost stagnant, with basically no revenue and no one placing advertisements.

An employee of LeTV Pictures also stated that LeTV Pictures currently has no plans to make any films this year.

The Economic Observer reporter confirmed through several LeTV Pictures people that Sun Hongbin expects LeTV Pictures to change its strategic layout, and LeTV Pictures will transform from an Internet film and television ecosystem to an IP-based crowd operation platform. Specifically, it is to attach importance to the derivative development capabilities of IP. For example, "Tiny Times" is a movie from a traditional operation perspective, and the interest point is the box office of the cinema. If "Tiny Times" is used as an IP, other needs of adolescent boys and girls in third- and fourth-tier cities can be developed, such as tourism. "It is hard to say which of the two models is better or worse. Telling stories to the capital market through movie box office, Huayi Brothers' stock price has shown that the capital market no longer recognizes the movie box office theory. If Sun Hongbin tells the capital market a story from the perspective of movie + IP + derivative development + movie town, it is a good subject." A banking industry insider analyzed.

Of course, it is not easy to tell a good story to the capital market amid turmoil.

The Economic Observer reporter verified through multiple channels: Currently, major banks, AMCs and other financial institutions are investigating LeTV's financial exposure and potential risks, and LeTV's capital chain will face unprecedented challenges.

On July 17, LeTV will have a new leader. There are two key points in this meeting: one is whether Jia Yueting, who is now far away in the United States, will attend; the other is whether Sun Hongbin will be elected as the chairman of LeTV.

Of course, Sun Hongbin’s latest moves and LeTV Pictures’ IP planning seem to make people think that Wanda may have something to do with it.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.