Chief Executive Leung Chun-ying said welcome, while TVB said it was thrilled.
The two were talking about the announcement a Sino-American movie production and distribution venture on the eve of Chinese President Xi Jinping’s visit to the United States.
Called Flagship Entertainment, the tie-up will be 51 percent owned by China Media Capital and 49 percent held by Warner Brothers.
Coming at a time when CY Leung’s popularity is at a nadir and the local economy is not exactly soaring, the announcement is indeed quite welcome.
Who wouldn’t be excited? The US$1 billion venture will be headquartered in Hong Kong.
Led by media mogul Li Ruigang (黎瑞剛), also known as China’s Rupert Murdoch, the venture has plans to set up offices in Hong Kong, Beijing and Los Angeles with a global ambition to capture the booming entertainment business in China and the world.
It was also the first deal in which Li brought in Television Broadcasts (TVB, 00511.HK) since he disclosed his holdings in the city’s No. 1 TV station in March. TVB takes 10 percent of the CMC consortium, or effectively a 5.1 percent stake in Flagship.
Flagship is expected to release its first movie as early as next year, leveraging Warner Bros’ wealth of filmmaking talents and unrivalled global film distribution network, and TVB’s own stable of local talents and market expertise.
Li, of course, is the man who put it all together, and his presence indicates that the venture has the full backing of Beijing, which is intent on expanding China’s soft power across the globe.
The deal, of course, did not happen overnight. Way back in 2013, Li, the former Shanghai Media Group chief, acquired a US$50 million stake in time Warner for his private equity fund CVC which specializes in investing TV and movie content.
Li also formed a joint venture with Dreamworks and Lan Kwai Fong to build Oriental Dreamworks in Shanghai, which will be ready by 2017.
In a statement, CY Leung was quick to point out that the Sino-US collaboration speaks volumes about the caliber of the cultural and creative industries in Hong Kong.
He also noted that he hosted a dinner for the management of CMC and Warner Bros. at Government House this January.
Apparently also apprised of the new venture, Financial Secretary John Tsang Chun-wah told a group of Polytechnic University students last Friday that the city’s creative industries could be the fifth pillar of society.
Hong Kong is the region’s media hub. Though people may feel that Hong Kong is slowly losing its freedom of expression as Beijing tightens its grip on the territory, it still enjoys the widest latitude of freedom in the creative sphere, on a par with Los Angeles and much better than in Beijing and Shanghai.
One also has to consider the city’s adherence to intellectual property rights, its taxation system and all its business-friendly elements to understand why Hong Kong is the best place for the creative forces of the two most powerful nations to come together and grow abundantly.
Unarguably, there is a lot of room for improvement for Hong Kong to become a global entertainment and movie capital.
While its strength lies in its capital-raising prowess and ability to nurture creative talent who can bridge cultural divisions between China and the US, it has virtually no infrastructure and secured little government support to form a critical mass for such a mission.
We could only wish that the West Kowloon Cultural District is ready for creative companies such as this US$1 billion venture between CMC and Warner Bros.
We could also strengthen ties with Macau, and hope to catch up with the entertainment alliance between Los Angeles’ Hollywood and the gaming city of Las Vegas.
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