"Half a percent is statistically insignificant."
Upon hearing James's proposed profit share, Mike shook his head and shifted his gaze to Sheldon, who was seated nearby.
The folder Sheldon was clutching to his chest contained a synthesized analysis of the newspaper's data, compiled from the combined input of Mike, Paige, and Sheldon himself.
It included the newspaper's financial statements from recent years, as well as the estimated operational costs for printing and distribution.
Seeing Mike's signal, Sheldon knew it was his time to shine.
He straightened his little bow tie, stood up, and marched to the manager's desk. With the gravitas of a tenured professor in a child's body, he began: "First, allow me to introduce myself. I am Sheldon Lee Cooper. I represent my client, Mike, in presenting the following statement..."
Pausing for effect, Sheldon glanced at James behind the desk before opening his folder. "According to the data we have collected, the total expenditures for raw materials and labor involved in your newspaper production constitute less than twenty percent of your gross revenue."
"The following is a detailed breakdown of the newspaper's profit margins over the last fiscal years..."
Manager James, who initially thought the child was just playing pretend, felt his expression grow heavier with every statistic Sheldon recited.
As the department manager, James realized with horror that he might actually know less about the company's overall liquidity than this child did.
Furthermore, with his professional eye, he had to admit that the intelligence gathered by Mike's team was comprehensive and accurate.
Essentially, the newspaper's hand had been completely revealed.
Standing in front of the desk, Sheldon relished the sensation of intellectual dominance.
After dissecting the profitability data, he concluded with a touch of smug satisfaction, as if he had just solved a complex equation. "Therefore, extrapolating from the newspaper's profit margins, it is logical to deduce that poster distribution could yield a net profit margin of eighty percent. Based on this calculation, I propose that a fair division of equity would be a forty-forty split between Mike and the newspaper."
The production cost of a poster was negligible. The primary value lay in the distribution channels.
And the newspaper held the advantage in that sector.
"No, no, no... You are underestimating the labor costs..." Having his bottom line exposed flustered Manager James. He looked at Mike, who remained calm and composed. "One percent of net profit. That is the maximum concession I can make. You do absolutely nothing, and you stand to gain nearly ten thousand dollars..."
The process had clearly shifted to the bargaining phase. Sheldon knew this social interaction was outside his area of expertise, so he closed his folder and silently returned to the sofa.
Ten thousand dollars was not a trivial sum for any high school student.
Clearly, Manager James was panicking. He was trying to dazzle Mike with a large, concrete number to distract him from the percentages.
However, his strategy was flawed.
Mike, who had already made significant gains in the stock market, was not your average high school student. While ten thousand dollars wasn't pocket change, it wasn't enough to shock him.
"One percent is still insufficient. I could distribute the posters independently and generate revenue exceeding that figure."
Times had changed. Having gained fame through the newspaper's distribution, Mike could now leverage that fame to make money on his own.
The only difference would be a slightly more cumbersome logistical process.
With a viable alternative, Mike had all the leverage in this negotiation.
Don't forget, the newspaper had essentially snatched this business opportunity from Jack. Worst case scenario, Mike could simply go back and partner with Jack directly.
It was entirely a seller's market.
Manager James, who thought his control over the distribution channels was an unbeatable ace, saw Mike's calm demeanor and realized he had shot himself in the foot.
"Project Star Maker" had inadvertently empowered Mike to dictate terms.
"Two percent. I cannot go higher."
Poster distribution was essentially "found money" for the newspaper. To avoid losing the opportunity entirely, James had to grit his teeth and bleed a little more profit.
Two percent was equivalent to twenty thousand dollars.
The Coopers, who had just recently ascended to the middle class, looked delighted at this potential payout. They were genuinely happy for Mike.
"Two percent? Still inadequate." Mike shook his head again, his expression unmoved by the manager's pained look.
Two percent was clearly below his target projection.
Business is war.
Seeing that Mike was still unsatisfied, a predatory glint appeared in Manager James's small eyes. He looked ready to bite someone.
However, considering his rotund physique likely couldn't physically intimidate Mike's group, the manager forced himself to regain rationality.
After a long, contemplative silence, he spoke through gritted teeth. "Two point five percent. That is the absolute bottom line for the newspaper. However, there is a condition. To secure this rate, Medford's next opponent must be the number one ranked team in Texas: Houston High."
As a businessman, James processed variables quickly. He realized he needed to expand the pie.
With the Super Bowl just having concluded, the state TV station would broadcast every invitational game featuring the league's number one team to maintain ratings.
In this scenario, if Medford could secure a televised match against Houston High, regardless of the outcome, Mike's visibility would expand exponentially.
Consequently, the market for the posters would expand as well.
"Houston High?" As the head coach of Medford, George naturally wanted a crack at the state's top team.
Hearing the manager's requirement, he couldn't help but exclaim in surprise.
"Correct. If we reach an agreement, the newspaper will leverage its influence behind the scenes to facilitate a match between you and Houston High..." James tempted him.
He had identified George's passion for the sport and was attempting to use it as a lever to regain control of the negotiation.
"This..." Coach George was visibly tempted. He looked at Mike with eager eyes.
Ultimately, the deal depended on Mike's decision.
However, scheduling a match against Houston High wasn't that simple.
As far as Mike knew, Houston High typically scheduled invitationals against top-ranked teams from other states.
State champions usually preferred playing strong out-of-state teams to expand their influence beyond Texas borders.
Facing Coach George's hopeful gaze, Mike shook his head slightly. He turned to Manager James and stated, "Regarding the invitational slot against Houston High, I can only promise that we will apply with maximum effort. Furthermore, I am willing to waive the image rights fee for the newspaper photo. However, for the poster distribution profit share, I require three percent."
"This is my final offer. If the newspaper does not agree, we can terminate this negotiation immediately."
As Manager James had implied, for a bureaucratic entity like the newspaper to operate, "greasing the wheels" was necessary.
The layers of administrative friction would consume a significant amount of capital.
Under these circumstances, expecting a 50/50 split of the net profit was unrealistic.
However, the bloated labor costs were the newspaper's internal inefficiency, not Mike's problem. While he was willing to compromise, three percent was his hard limit.
The ball was back in the newspaper's court.
If Mike took a larger slice, the people within the newspaper organization would get less.
But the percentage Mike proposed was calculated perfectly: the newspaper would still make a profit, just not a massive one.
Seeing Mike's "take it or leave it" stance, Manager James sighed and took a step back. "Your terms are incredibly strict. However, if you are willing to grant the newspaper exclusive distribution rights for your posters in the second half of the year, I might be inclined to agree..."
Negotiation is a process of mutual compromise.
Like Jack, Manager James decided to bet on Mike's future value.
It was foreseeable that once Frank, the star player from Houston High, graduated in the second half of the year, the next "Star of Texas" would likely be Mike.
At that point, with the spotlight firmly on him, the profit he could generate would be significantly higher.
Realizing he couldn't bully Mike, James decided to build a bridge for the future instead.
Indeed, anyone sitting in the manager's chair wasn't incompetent.
For Mike, partnering with an entity that possessed massive distribution channels like the newspaper was a net positive.
He looked at Manager James and smiled. "Then, I wish us a pleasant cooperation."
With that, the framework for the partnership was essentially established.