Stephen Chow, China's Huayi Brothers in Dispute Over 'Journey to the West' Profits

Stephen Chow - P 2013
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The Hong Kong director and mainland Chinese film studio are locked in a war of words over the distribution of earnings for the blockbuster.

HONG KONG – As Journey to the West: Conquering the Demons continues its record-breaking march towards becoming the top-grossing domestic production ever released in China, a parallel drama is unfolding online, as the film’s producer-director and his mainland Chinese partner engage in an escalating battle over how the spoils are to be shared.

For the past week, Stephen Chow Sing-chi’s Bingo Group and the Beijing-based Huayi Brothers studio have issued separate notices contesting how Journey’s net profits are to be divided. The main sticking point is whether Huayi is an investor in the production, or merely the Chinese distributor of the film -- if the latter, the studio's take will be considerably less. 

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The saga began on Feb. 5, when an entry in Huayi CEO Wang Zhonglei’s blog stated how his company is contracted to receive the biggest share of Journey’s net profits -- a comment followed two days later by an official notice claiming the studio to be an investor as well as the mainland Chinese distributor of the film. This claim contrasted sharply with Bingo’s announcement last Nov., which did not name Huayi among the project’s four financing parties.

As Journey broke the 1-billion-yuan ($160 million) threshold on Monday, Huayi issued another notice stating the company should receive pre-tax profits of $31.5 (196 million yuan) from the film. Bingo responded in the evening with an online notice saying that Huayi would receive 12 percent of the film’s net profits as distributors plus an additional share of box-office dividends, while the investors -- excluding Huayi Brothers -- may “actually obtain approximately 70 percent of the net income calculated from distribution of the film in mainland China.”

After Bingo’s missive dismissing Huayi’s claims of being an investor, Wang fought back with yet another post the next day claiming it should be his company, under an agreement struck with Bingo and their partners, which is to receive 70 to 90 percent of the film’s net takings after the deduction of the distribution fee -- an amount which would translate to total earnings from $43 million (270 million yuan) to $57 million (356 million yuan) if the film is to surpass 1.2 billion yuan ($192 million) in ticket sales, as many analysts predict. 

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Speaking to the Apple Daily newspaper on Wednesday, Chow declined to comment on his conflict with Huayi, saying his company is already dealing with the matter. The potentially disintegrating relationship between Chow and Wang is startling, given how the pair regularly appeared together at promotional events for Journey before the film opened.

Huayi has been pursuing better financial returns in 2013 after the disappointing performance of Feng Xiaogang’s historical drama Back to 1942 in 2012. Made with a budget of $33.7 million (210 million yuan), the film only took $58 million (364 million yuan) during its Nov.-Dec. run, losing out not just to Ang Lee’s Life of Pi but also actor-turned-director Xu Zheng’s comedy Lost in Thailand, which has since gone on to gross $202 million (1.26 billion yuan), becoming China's highest-grossing domestic production ever.