State-Owned China Film Group Makes Groundbreaking Investment in 'Warcraft,' 'Seventh Son'
The deal marks the first time that China Film has taken a stake in Hollywood movies.
China's state-owned film company China Film Group has made an "eight-figure" equity investment in two forthcoming projects by Thomas Tull's Legendary Entertainment feature film division: Seventh Son and Warcraft.
The investment was announced by newly installed China Film chairman La Peikang and Legendary East CEO Peter Loehr, and it marks the first time the state film colossus has taken a stake in Hollywood films.
"These investments are an important step in the evolution of our partnership with China Film Co., Ltd.," said Tull, founder and CEO of Legendary Entertainment.
Legendary emphasized that the news did not relate to Legendary East, its Asian unit, but it forms part of a multiyear deal signed last year with China Film Group to co-produce movies for the Chinese and global markets.
Legendary East has been working on several projects over the past few years, including The Great Wall, a fantasy epic which at one point had Henry Cavill attached.
The deal is formally with China Film Company Ltd., part of China Film Group, the largest producer and distributor of Chinese content.
La said China Film has been paying close attention and great devotion to expanding its overseas market.
"The partnership with Legendary East is a new attempt in this progress," he said. "I believe our collaboration on Seventh Son and Warcraft will become an effective step for both parties in terms of resource integration and market expansion."
The 2013 agreement also called for the two companies to fund the development and production of multiple pictures over an initial three-year term.
If the movies are approved for release in China, China Film Co. will distribute the films in the country based on the current rules and regulations on foreign films, with distribution and marketing support coming from Legendary East and its global distribution partner, Universal Pictures.
As part of the investment structure, China Film will be credited on these movies and its equity recouped, on a worldwide basis.
Universal Pictures is releasing Seventh Son on Feb. 6, 2015, and Warcraft is set for a March 11, 2016, opening.
"Seventh Son and Warcraft offer precisely the kind of unique worlds, stunning visuals and compelling stories that we originally partnered with China Film Co., Ltd., to create," said Loehr. "We are very pleased to welcome CFG into these productions and believe this is a fantastic way to kick-start what will be a successful relationship."
In 2013, Legendary East worked with then-partner Warner Brothers to drive the release of Pacific Rim in China, where it grossed $115 million, "putting the property in position to potentially merit a sequel."