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DreamWorks Animation and two state-owned Chinese media companies, Shanghai Media Group and China Media Capital, will unveil a landmark joint venture on Friday, the Financial Times reported.
The partners will construct a studio facility in Shanghai to develop film, TV and live stage productions for the Chinese market, according to the report.
STORY: DreamWorks Animation: Why It’s the Only Hollywood Firm on Fortune’s Best 100 Employers List
China’s vice president and heir apparent Xi Jinping is scheduled to visit Los Angeles as his final stop on a U.S. trip and be there to help announce the venture, the paper said, calling it “the most significant deal to involve a Hollywood studio in China.”
The deal by DWA, led by CEO Jeffrey Katzenberg, comes as studios continue to look for ways to take advantage of China’s strong economic, population and box office growth amid sluggish film industry momentum in the U.S.
Entertainment giants continue to be restricted in China, including by an annual quota capping the number of foreign-made movies shown in theaters.
China is already the third-largest cinema market in the world with a box office gross of $2.09 billion, up 29 percent, last year, putting it behind only the U.S. and Japan. It is forecast to be the world’s biggest cinema market within the next decade.
Plus, the country is adding new movie theaters at a rate of about three screens a day, the fastest growth rate in the world, the FT said.
Flowers of War with Christian Bale is an example for how bringing together a Chinese director and financiers with U.S. talent can get a film access to Chinese screens and broader global appeal.
Such film companies as Relativity Media and Legendary Entertainment have launched Chinese operations with local partners to avoid restrictions on foreign film productions.
In another move set to bring Hollywood and China closer together, an $800 million fund recently created by China’s Harvest Alternative Investment group and Sun Redrock Investment Group will target Hollywood majors and tentpole productions. The Harvest Seven Stars Media Fund wants to invest in studio projects with to bring them to the wider Asian market and mainland China.
The Financial Times said that DWA declined to comment on the planned joint venture, while its Chinese partners could not be reached for comment.
SMG is China’s second-largest broadcaster. China Media Capital is a fund backed by the company, state-owned China Development Bank and China Broadband Capital and designed to help further professionalize and globalize the Chinese media and entertainment industry.
Xi is fond of Hollywood war films and said earlier this week that he wants to build a “co-operative partnership” with the U.S. based on “mutual respect,” according to the FT.
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