Imax CEO Downplays Risk of Russian Backlash Against Hollywood

7:55 AM PST 04/24/2014 by Etan Vlessing
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Richard Gelfond was also cautious about major film distribution changes in China during an analyst call.

TORONTO -- With Hollywood becoming a possible pawn as Washington escalates its standoff with Moscow over Ukraine, Imax topper Richard Gelfond on Thursday told analysts he doesn't see a quota limiting foreign film imports into Russia emerging anytime soon.

Nor does the giant-screen exhibitor's CEO see the current quota system in China being raised to Hollywood's advantage.

Gelfond instead ventured during a morning call to discuss Imax's first quarter results that, barring a new Cold War, major film distribution changes in Russia are unlikely.

For starters, most movies released in Russia are studio titles, and talk of capping foreign releases or introducing tariffs as part of tit-for-tat sanctions would leave too big a hole to fill with available local movies.

"I've spoken to several exhibitors in Russia. There aren't even enough Russian films made to really fill the schedule in Russia," Gelfond insisted.

"So basically they'd have to close the theaters or show Chinese films, which I don't think would work that well. As a practical matter, the risks are very small," he added.

Russia is a key emerging market for Imax, as is China, where Gelfond does not see major film distribution changes any time soon.

He told analysts he was in Beijing last week and met with officials from China's state-owned film company, China Film Group, and the China Film Bureau, the government regulator.

"A lot of information that comes out of there -- some of it is true, and some of it is not true. But I just didn't have the sense that there were going to be significant changes," Gelfond reported.

China raised the number of foreign films that can be imported on a revenue-sharing basis to 34 from 20 in 2012.

MPAA president Christopher Dodd earlier this month expressed optimism that China will expand the number of foreign films that can be imported into that market when its current quota system comes up for re-negotiation.

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