L.A.'s Mystery Banker Behind Hollywood's China Money
Dominic Ng is already fielding calls from Chinese investors interested in Paramount, as the low-profile chairman/CEO of East West Bank is one of the few financial connectors between U.S. studios (Universal, Fox, Lionsgate) and the emerging power.
This story first appeared in the March 18 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
Dominic Ng might be one of Hollywood's most influential power players you've never heard of. He avoids splashy premieres, isn't one to read scripts of the movies he backs, and he watched the Oscars at home so he could skip the commercials. Yet Ng has emerged as one of only a handful of top U.S.-based bankers connecting American studios with wealthy Chinese investors.
The longtime chief executive of East West Bank is the conduit for high-profile deals such as Perfect World's recent $250 million investment in a slate of Universal movies and Robert Simonds' STX Entertainment's 2015 pact to produce at least 18 films with Huayi Brothers. He has helped raise cash that has powered such blockbusters as The Martian and The Hunger Games franchise, along with small-screen hits like Netflix's Orange Is the New Black and Marco Polo.
These kind of cross-border deals would have been unheard of just five years ago — along with Ng's unlikely rise in the clubby world of movie financing. (Other banks in this fraternity include Bank of China.) Ng, a 57-year-old married father of two, acknowledges this with a smile as he points out a massive Chinese calligraphy artwork by artist Xu Bing that hangs in East West's Pasadena lobby. It is made up of English letters masquerading as Chinese characters that spell out a prophetic line from a Bob Dylan classic: "The Times They Are a Changin'." "Studios feel insecure today if they don't have a Chinese partner," says Ng. "And for the Chinese, Hollywood is the holy land. It is a win-win."
Ng estimates that East West has cobbled together about $1.6 billion of financing during the past few years and expects that amount will grow significantly in 2016 as the China frenzy continues. To that point, he says his phone already is ringing from Chinese investors wanting to take Viacom CEO Philippe Dauman up on his Feb. 23 offer to sell a stake in Paramount Pictures.
East West's small movie financing team, which includes corporate banking chief Bennett Pozil, isn't in the business of advising clients on what to invest in. Instead, they help arrange fundraising once deals are in place. For instance, the bank will raise $250 million in debt sold to big institutional investors for Perfect World's Universal deal. It also was instrumental in putting together the $235 million China's Bona Film Group sank into a slate of 20th Century Fox tentpoles. Ng also provides lead and co-financing for individual movies, like Silver Linings Playbook, the Divergent movie series and the upcoming Legendary production The Great Wall.
"They have a really deep knowledge of the entertainment and media sector in the U.S. and at the same time have great access and presence in China," says Lionsgate co-COO Brian Goldsmith. "So, with the explosion of the box office in China, we're well positioned to capitalize on growth opportunities because Dominic has unique relationships in both countries."
Ng, a soft-spoken financier with a penchant for nice suits (he was named to one of American Banker's best-dressed lists), has used Hollywood as a means to get ahead since moving from Hong Kong to the States in 1977. He assimilated into the culture by purchasing an old television for $100 and consuming hours of shows (his favorites, The Tonight Show Starring Johnny Carson, The Mary Tyler Moore Show and All in the Family). "They helped me learn how to tell a joke," he says.
But his professional move into entertainment came right after the 2008 financial crisis, when pretty much every big New York and European bank retrenched or abandoned movie financing. It was right about that time when Chinese President Hu Jintao declared that culture would be of strategic importance for the country and encouraged the burgeoning film industry to go global. Ng pounced: "Right then, I knew something would happen. It made perfect sense for them to come to the U.S. and learn the Hollywood magic."
Indeed, an estimated $3 billion of Chinese investments flowed into the U.S. entertainment industry in 2015, according to research firm Rhodium Group. Ng points out that the demographics of China's growing middle class are fueling the country's appetite for film. That has led to an explosion of growth in movie theaters on the mainland, where 15 new screens open daily. There are 5,600 cinemas with 28,000 screens, and that number is projected to nearly double this year. That's where the money comes in, he says, because Chinese investors realize that their native box-office receipts are expected to surpass those of the U.S. next year, creating the largest movie market in the world with a projected $12 billion in ticket sales.
"When we have a project ready and look for a financing partner, then Dominic becomes not just the perfect choice but almost the only choice," says Bruno Wu, who heads China's Sun Seven Stars conglomerate. "They are the only ones with the expertise in understanding East and West and Hollywood."
Ng says he's under no illusion that the money spigot will be turned on forever. Eventually, the Chinese-U.S. deal craze will wane and both countries' entertainment sectors will move on to other things (he thinks concerts and video games will be the next wave). But China's interest in the U.S., and vice versa, will still continue to yield business opportunities.
"You have to find a different angle," he says, "find a path that nobody wants to walk in."