A combination of government support and investment in the nascent Chinese film industry, as well as that country’s growing middle class, has led to a flurry of deals between Hollywood and Chinese companies over the past few years.
Kicking things off was Dalian Wanda Group’s 2012 acquisition of AMC Entertainment Holdings, which was the second-largest theater chain in the United States and Canada at the time. The deal paved the way for the Chinese real estate and entertainment conglomerate to become the largest film exhibitor in this country.
For U.S. companies, the deals offer access to a market that will soon offer the world’s largest box office and whose government limits the number of movies produced by non-Chinese companies to 34 a year. The investments also diversify the portfolios of the Chinese investors, many of whom specialize in industries other than entertainment, as well as help them establish dominance in the Chinese film production market.
Box-office revenue in China grew to $7 billion in 2015 from $900 million in 2009, according to Dominic Ng, chairman and chief executive of East West Bank. By comparison, the U.S. box office generated more than $11 billion that year.
“In terms of following film industry news, this is one of the biggest stories since the coming of sound,” said Jason Squire, an associate professor at USC’s School of Cinematic Arts and editor of “The Movie Business Book.”
Here are some of the biggest deals in the last two years:
Dalian Wanda announced in January of last year that it would acquire Legendary Entertainment, a Burbank production company, for $3.5 billion, reportedly the largest deal by a Chinese company in the history of the American film industry. Dalian Wanda had planned to integrate the film studio, which was one of the financiers of 2015’s “Jurassic World,” into its publicly traded film division, but those plans were put on hold in August due to China’s weakening stock market.
Dick Clark Productions-
Dalian Wanda made its first foray into TV in November when it paid $1 billion for Dick Clark Productions Inc., a Santa Monica production company founded by television host Dick Clark in 1957, which produces the Golden Globes. Reports of the deal, which Wanda said would leave Dick Clark Productions’ management team in place, prompted members of Congress to call for oversight of Chinese acquisitions of U.S. media companies.
The film division of China’s biggest e-commerce company, Alibaba Group, announced in October that it would acquire an unspecified minority stake in Amblin Partners, formed by DreamWorks Studios, Participant Media, Reliance Entertainment, and Entertainment One. For Amblin, the investment is its first from China and will help it distribute its movies there. Meanwhile, Alibaba gets a seat on Amblin’s board and can boost its profile in Hollywood.
Lions Gate Entertainment-
Lions Gate Entertainment Corp., the Santa Monica television and film company behind “The Hunger Games” and “Mad Men,” signed a deal in March 2015 worth up to $375 million with Hunan TV, China’s leading provincial broadcaster, agreeing that Hunan would finance a quarter of the studio’s movie production budget for three years.
Twentieth Century Fox Film Corp.-
Bona Film Group
Bona Film Group, a Chinese film financier, producer, and distributor, and theater operator, agreed in November 2015 to invest $235 million in a slate of six movies from Century City’s Twentieth Century Fox Film Corp. The deal included “The Martian,” which grossed over $630 million worldwide, 20 percent of which went to Bona.
Tang Media Partners
Tang Media Partners, a Century City company dedicated to producing content for China and Hollywood, acquired a majority interest in IM Global, a West Hollywood film studio founded in 2007 by Stuart Ford, former executive at Miramax, reportedly putting the value of IM Global at $200 million. The companies also formed a joint TV production venture with Tencent Holdings Ltd., China’s most valuable company, and an Indian entertainment company.
Sony Pictures Entertainment-
Dalian Wanda agreed to help market and distribute films by Culver City’s Sony Pictures Entertainment in September. The agreement also allows for the possibility of Wanda taking minority equity stakes in individual Sony films.
Perfect World Pictures
Chinese film studio Perfect World Pictures agreed in February to invest $250 million in a slate of films from Universal Pictures, owned by Comcast Corp. In exchange for financing at least 50 Universal movies over a five-year period, Perfect World will get a cut of global ticket sales as well as television and merchandising revenue.
Huayi Brothers Media Corp.
Huayi Brothers Media Corp., China’s largest private film company, announced in April 2015 that it would help finance, produce, and distribute almost all of the films made by STX Entertainment through 2017. The deal would allow STX, a Burbank studio founded by film producer Robert Simonds in 2014, to spend about $1 billion a year on its films.
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