Asia > Eastern Asia > China > China's Huayi Brothers Pacts With Major U.S. Film Company

China: China's Huayi Brothers Pacts With Major U.S. Film Company

2015/03/19

China’s major privately run film production company, Huayi Brothers Media, says that it has reached a transaction to finance, co-produce, and release 18 feature films by 2017 with an unnamed US partner.

The Beijing-based company did not identify its US counterpart but people familiar with the situation said it was Burbank-based STX Entertainment.
The venture is not the initial co-production transaction Huayi has done in Hollywood, but it is — according to the film group — the initial time a Chinese company will take part in all process of Hollywood filmmaking, from investment to production and distribution, and get a cut of total world revenues from films in addition to the Better China distribution rights.

Wei Huan, a researcher at Ent Group, a media research consultancy, said that the agreement “implies co-operation on a deeper level and, compared with acting as a distribution agent or a partner in film making, this will grant Huayi a larger say in the productions”.
The partnership between Huayi and STX would be the new in a series of filmmaking ventures between Chinese companies and Hollywood focusing on the mainland’s box-office potential as an increasingly significant source of revenue for the worldwide film industry.

Last year, for example, Transformers 4, which director Michael Bay set and filmed in China and in which he used Chinese actors, resources and products, became the top-grossing film of all time in China within two weeks of its release.
Wealthy Chinese have been keen to buy into Hollywood.

In 2012, Wang Jianlin, chief of property conglomerate Dalian Wanda, bought US theatre chain AMC, and last year expressed interest in buying a controlling stake in Lions Gate Entertainment, the Hollywood studio that made the Hunger Games series.
While world film revenues inched only 1 % higher in 2014, China’s box-office takings increased 34 per to $4.8bn, according to the Motion Picture Association of America, and in 2013 alone the mainland added additional film screens than the total for France.
Ms Huan said that China box-office revenues surpassed monthly US revenues in January and February this year.

STX, established a year ago by veteran producer Robert Simonds, whose credits include Happy Gilmore and This Means War, has announced plans to make and distribute up to 10 films a year with budgets of roughly $20m-$60m, which is considered mid-range in Hollywood.
Its financial backers include Chinese private equity group Hony Capital inclunding San Francisco-based TPG Increase, an arm of US buyout group TPG Capital.

Huayi Brothers last year set up a US subsidiary and signed a co-production and distribution agreement with QED International to work together on the world war two film Fury, starring Brad Pitt and Shia Labeouf, which it will distribute in China.
In November, it secured more
than $500m in investment from Chinese internet giants Alibaba

and Tencent.

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