AFM: With Major Deals, China Doubles Down on Hollywood
Two Chinese investments (including one for $1.6 billion) reveal a renewed effort to be a much bigger player at the global box office.
Hollywood has become accustomed to deep-pocketed Chinese investors rolling into town, throwing money at co-productions and shelling out for seven-figure distribution deals focused on bringing Chinese films to the world or U.S. films to China.
But as a pair of high-profile deals announced at AFM this week indicate, the smart Chinese money is changing strategy and going global.
Call it China 2.0.
On Nov. 4, Bruno Wu, the Sino media mogul behind the Sun Seven Stars entertainment conglomerate, unveiled a $1.6 billion film and TV fund to L.A. producers at an exclusive dinner at the W Hotel in Beverly Hills.
The fund, which Wu’s company is running with Chinese online financial service platform Yucheng Group, will pool capital from private and institutional investors in China to back international film and TV productions. Sun Seven Stars will be in charge of allocating the funds, with a team to greenlight projects.
Speaking to THR, Wu said the fund would back planned tentpole projects from Sun Seven Stars’ stable of production companies — including a feature adaptation of James Patterson’s Maximum Ride YA fantasy novels and a feature based on the popular Tetris video game.
But the fund — titled the China Global Alliance Film Fund — also will back third-party projects, including indie features and studio slates. Wu said the fund would invest primarily in development and in greenlighted projects. For films from his own production companies, the equity play will not exceed 20 percent of a project’s budget.
"This is not a pure financial play; our ultimate goal is to own a piece of the IP (intellectual property)," says Wu. "We want to be in control."
At an AFM event a day earlier, Chinese movie studio Bona Film Group announced a $235 million investment in The Seelig Group (TSG Entertainment Finance), the financier behind a slate of six live-action tentpoles from 20th Century Fox, including The Martian. The deal effectively allows Bona to invest in Fox’s live-action movie slate, through TSG, and to participate in the profits.
"I think this shows the versatility and potential of Chinese capital," Bona Film Group COO Jeffrey Chan tells THR. "It’s not just China-market centric. We are optimistic about the Chinese market, but at the same time, we want to be a global player and hopefully, this transaction will allow us to learn about the global market."
This type of Chinese direct investment in Hollywood moviemaking is picking up. Chinese Internet giant Alibaba invested in Paramount's Mission: Impossible – Rogue Nation, Tencent has an equity stake in Legendary Pictures’ World of Warcraft adaptation, and Wanda was the sole financier of the Jake Gyllenhaal-starrer Southpaw — all English-language titles targeting a global audience.
"The difference between most Chinese investment up to now is that other Chinese companies see China as their home market. I see the U.S. and the world as my home market," says Wu.
"[Chinese companies] have made the same mistakes in the U.S. as U.S. companies have in China. They think, 'How do I take U.S. 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."