24 October 2016
China Film Group Corp., the government-run distributor of all foreign movies, took a 10 percent stake in Universal’s Furious 7, which grossed US$1.5 billion globally -- a quarter of that within China. Photo: internet
China Film Group Corp., the government-run distributor of all foreign movies, took a 10 percent stake in Universal’s Furious 7, which grossed US$1.5 billion globally -- a quarter of that within China. Photo: internet

China doubles down on Hollywood

Hollywood has become accustomed to deep-pocketed Chinese investors rolling into town, throwing money at co-productions and shelling out for huge distribution deals to bring Chinese films to the world or US films to China.

But as a pair of high-profile deals announced at the American Film Market this week indicate, the smart Chinese money is changing strategy and going global, the Hollywood Reporter said.

Two large Chinese investments (including one for US$1.6 billion) join more than half a dozen in the past year between US studios and Chinese firms that are putting down roots in Hollywood to find out what makes it tick.

“China is trying to learn why Hollywood is so successful,” Stanley Rosen, a University of Southern California political science professor who studies the relationship between mainland China and the US film industry, told Bloomberg.

China, he said, wants to master the business “from the bottom up”.

For Bruno Wu, the media mogul behind Sun Seven Stars Entertainment and Media Group, that means ponying up a US$1.6 billion fund to back international film and TV productions.

The fund, which Wu’s company is running with Chinese online financial services firm Yucheng International Holdings Group Ltd., will pool capital from private and institutional investors in China, the Hollywood Reporter said.

Sun Seven Stars will be in charge of allocating the funds, with a team to greenlight projects.

“This is not a pure financial play; our ultimate goal is to own a piece of the IP [intellectual property],” Wu said.

“We want to be in control.”

Chinese movie studio Bona Film Group has the same idea, investing US$235 million in The Seelig Group (TSG Entertainment Finance), the financier behind a slate of Hollywood tent-pole projects from 20th Century Fox Film Corp.

“From an investment standpoint, making Chinese movies or English-language movies is pretty easy,” Bona chief executive Yu Dong told the Hollywood Reporter.

“But because the two cultures are so different, it’s very difficult to find a story that both markets can accept.”

That elusive property — one that works in both East and West — has become the ultimate holy grail for US-China film principals, but Yu is optimistic that co-productions will eventually lead in that direction.

Bona’s investment gives the Chinese studio a stake in six major live-action films from Fox, including The Martian, which opens in China on Nov. 25.

Also doubling down on Hollywood are companies like Dalian Wanda Group Co. Ltd., Alibaba Group Holding Ltd., Tencent Holdings Ltd. and even the Chinese government, Bloomberg said.

Dalian Wanda — owner of the AMC theater chain, the second-largest in the US — is building a US$1.2 billion US headquarters in Beverly Hills, California, for its new film holding company, Wanda Films, as well as the world’s largest studio complex, set to open in April 2017 in the port city of Qingdao, Shandong province.

The company’s name has been linked to possible purchases of Hollywood studios including Lionsgate Entertainment Corp., Metro-Goldwyn-Mayer Inc. and DreamWorks Animation SKG Inc., Variety, a weekly American entertainment trade magazine, reported.

“We aim to be the biggest company in the Chinese film industry and for the Chinese industry to obtain its correct place in the world,” a Wanda representative said.

Alibaba most recently invested in Paramount’s Mission: Impossible – Rogue Nation, and Tencent has an equity stake in Legendary Pictures’ upcoming World of Warcraft adaptation, Warcraft: The Beginning, due out next summer.

Tencent, China’s biggest social network and online games firm, also announced deals with two major Hollywood studios Friday, The Wall Street Journal reported.

Viacom Inc.’s Paramount Pictures agreed to make it the exclusive online distributor in China of the film studio’s future theatrical releases, including Star Trek Beyond, which is scheduled to come out next year.

Tencent is also acquiring from MGM the online distribution rights in China for the James Bond franchise, including the new Spectre film.

State-backed China Movie Channel, the country’s No. 3 TV network, invested in Paramount’s Terminator: Genisys as well as Mission: Impossible.

China Film Group Corp., the government-run distributor of all foreign movies, took about a 10 percent stake in Universal Studios Inc.’s car-heist thriller Furious 7, which cost US$190 million to make and grossed US$1.5 billion globally — a quarter of that within China — Bloomberg said.

China Film has also invested in The Great Wall, a thriller starring Matt Damon and Willem Dafoe about an elite force making a last stand for humanity on China’s famous barrier.

It’s targeted for a November 2016 release by Universal.

Wu, the man behind the new US$1.6 billion film fund, said he plans to back and own a big chunk of major tent-pole projects with universal appeal, including a feature adaptation of James Patterson’s Maximum Ride young adult fantasy novels, a sci-fi superhero reimagining of Zorro titled Zorro Reborn and a feature based on the popular Tetris video game.

On his intent to have control, he said, “[Chinese companies] have made the same mistakes in the US as US companies have in China.

“They think, ‘How do I take US product and make it work in China?’

“I think, ‘How do I make product that works for the world?’

“Because if it works for the world, it will work for China.”

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