Tencent Buys Stake in Chinese Production Company New Classics Media for $524M
The deal gives Tencent a strategic relationship with the co-producer of local blockbusters 'Never Say Die' ($334 million) and 'Goodbye Mr. Loser' ($228 million).
Chinese internet company Tencent Holdings has invested in so many film companies that it's becoming difficult to keep track of them all.
On Monday, the social media, gaming and entertainment giant revealed that it had acquired a 27.64 percent stake in Chinese production house New Classics Media for $524 million (3.32 billion yuan). The stake was sold by Chinese film and television company Beijing Enlight Media, which acquired the sharehold for 829 million yuan in 2013 ($131 million at current exchange rates).
While Enlight gets a tidy profit from the transaction, the agreement gives Tencent a sizable interest in yet another ambitious production company. New Classics Media, established in 2007, has been involved in a string of major Chinese film and television hits. It co-produced the 2015 blockbusters Jian Bing Man ($186 million) and Goodbye Mr. Loser ($228 million), as well as last year's mega-hit Never Say Die ($334 million). New Classics also has a multi-picture deal with Chinese auteur Chen Kaige, whose last two films were produced by the company — Monk Comes Down the Mountain ($64 million, 2015) and Legend of the Demon Cat ($92 million, 2017).
Part of Tencent's motivation for the investment is the desire for more exclusive content to feed into its flagship streaming-video platform, Tencent Video. Becoming a major shareholder in New Classics Media "gives Tencent Video more control over its content portfolio long-term and more competitive advantage over competitors," Tencent told Nikkei on Monday. New Classics Media is "one of the few companies possessing top-tier TV drama production capabilities with a successful track record of over ten years, plus a promising film business," Tencent said.
New Classics' recent TV output has included a series of hit dramas, including The First Half of My Life, Hot Mom, Beijing Love Story and Tiger Mom, starring Zhao Wei.
Tencent said that it will enter into a business cooperation agreement with New Classics "when appropriate to ensure that Tencent Video can secure rights to the top TV dramas" produced by the studio.
Tencent already held minority positions in leading Chinese studios Huayi Brothers Media and Bona Film Group, as well as movie ticketing service Maoyan. The company also operates growing film and television outfits of its own. Overseas, Tencent holds stakes in everything from Skydance Media to Donald Tang's Global Road, STX Entertainment, Snap and Tesla. It is also one of the lead local partners of power agency Endeavor's Beijing-based joint venture, WME-IMG China.