China's Huayi Brothers Pacts With Major U.S. Film Company to Make 18 Movies
A regulatory statement from Huayi doesn't reveal the U.S. studio involved, but said the deal will revolutionize the international role of the Chinese film business.
Leading Chinese private film and TV company Huayi Brothers is planning to sign a deal with an unnamed U.S. film company to jointly fund, shoot and release more than 18 films before the end of 2017.
The regulatory statement from the Shenzhen Stock Exchange-listed Huayi Brothers, which was mysterious in how little detail it contained, said that besides the distribution rights for Greater China, including mainland China, Hong Kong, Macau, Taiwan and Singapore, Huayi Brothers will also have global revenue share of the co-produced films. The pact will work through Huayi's U.S. unit, which it set up last year.
Huayi Brothers is run by brothers Wang Zhongjun and Wang Zhonglei.
There was speculation in China that the mystery partner was one of the big six studios, although there are also rumors it could be one of the bigger indies.
"From the scale of 18 films and Wang Zhongjun's ambitious international strategy, we can guess it can be one of the six American studios," said the Huxiu media business website.
Huayi was a major investor in Brad Pitt and Shia LaBeouf's Fury, and last year it was in the frame for a major capital investment in Jeff Robinov's Studio 8 venture, before the industrial conglomerate Fosun stepped in with a $200 million capital injection.
At Cannes two years ago, Huayi Brothers announced a strategic co-production and distribution agreement with QED International to co-produce and distribute international projects.
Sources close to the company told THR that while they were aware of the agreement, the name of the U.S. studio in question was being kept a secret.
The statement said the deal was "of great significance" and marked "a new era for the internationalization of Chinese film," citing industry figures. The statement said it was the first time that a Chinese film company was involved in the whole Hollywood procedure, from investment to shooting to distribution, as well as taking a cut of global revenue.
It also marked the first time that a Chinese film company had the copyright of the co-produced films, according to the share.
"This is not only a step for Huayi Brothers' internationalization, but also the internationalization of Chinese film companies," it said.
Huayi Brothers' revenue in 2014 reached $380 million, up 19 percent, while operating profit rose 61 percent to $188 million.
In November, Huayi Bros., which saw its income from film decline 75 percent in the first nine months of 2014, said it planned to raise $588 million in a private placement, and technology giants Alibaba and Tencent bought a stake. It also signed a strategic agreement with Alibaba on e-commerce, online entertainment and movie development.
Wang Zhongjun made headlines last year when he bought a Vincent van Gogh masterpiece at Sotheby's in New York for nearly $62 million.