China's Huayi Brothers, US film studio close deal
Updated: 2015-04-06 11:39
By Amy He in New York(China Daily USA)
In the latest deal by a Chinese company to invest in a Hollywood studio, Huayi Brothers Media Corporation will become the first Chinese company to be involved with the entire production and distribution of movies produced by a US film and television studio.
Under the three-year financing agreement, Huayi Brothers, one of China's largest film companies, will co-produce and co-distribute 12 to 15 films with California-based STX Entertainment, a studio launched in 2014 that produces mid-budget films, defined typically by a $20 million to $60 million budget.
"This deal shows that STX recognizes that any growth plan for any new or burgeoning company should have within its portfolio an association with China and entrees to the market place when it comes to film," Paul Dergarabedian, senior media analyst at the media research firm Rentrak, told China Daily.
"Despite various restrictions and quotas, still working within that system, companies can garner a lot of success by properly deciding and properly strategizing how to best get into the Chinese marketplace, how to create content or partner with content providers who can create the best possible result for your company, and Simonds is really smart," he said, referring to Robert Simonds, chairman and CEO of STX Entertainment.
Huayi Brothers will finance new films from STX Entertainment through the end of 2017, and the Chinese media company will have global revenue share of the co-produced films. It will "considerably strengthen its imprint in the United States while immediately establishing a prominent worldwide foothold in film production and distribution," the companies said in their April 1 announcement.
The two companies did not disclose financial terms of the deal, but in an interview with The Hollywood Reporter on April 1, Simonds said, "What this has actually meant is that we are going to spend $750 million in the next 12 months. We'll spend about $900 to $950 million next year. And we'll spend $1.125 billion to $1.5 billion in 2017."
Under the deal, STX Entertainment will first be releasing The Gift, a psychological thriller scheduled for release in July, starring Jason Bateman and Rebecca Hall.
"All people involved in entertainment enjoy the prosperity of other markets and how the markets in general are changing, and how the movie industry, for example, has this huge market shift, with an emphasis on global entertainment, exporting movies from the United States perspective. This story is an example of joining of hands and minds among two really smart groups," said Jason Squire, professor of cinema at the University of Southern California, and a visiting professor at the Beijing Film Academy.
Beijing-based Huayi Brothers was founded in 1994 and is backed by Chinese Internet giants Alibaba and Tencent.
"Partnership with STX is an important step as Huayi Brothers implements its international growth strategy and enters the US film market," said Dennis Wang, co-founder of Huayi Brothers, in the statement.