Studios only reap about 25% of ticket sales there — less if the films are not co-productions — and no ancillaries, but China can still provide a major boost to the global bottom line on a movie like Transformers: Age Of Extinction. Those high stakes, coupled with the uncertainty of mixing Hollywood capitalism in a bureaucracy controlled by a communist government, means that U.S. studios and other companies doing movie business in this fast-growing region find themselves tip-toeing around, trying not offend the wrong person.
Pangu Investments and Paramount have resolved the accusation that the studio breached its promise to feature the distinctive Pangu Plaza in the Transformers film, in the wake of Pangu ‘s attempt to delay the film’s June 27 opening in China. That hasn’t stopped Jiaflix — the company hatched by former AMPAS head Sid Ganis, Kenneth Huang and Marc Ganis to facilitate the production and distribution of films in China — from standing up for itself after taking some of the shrapnel from the Transformers dispute.
In a release issued from Beijing, Ganis and his partners excoriate Pangu for essentially creating an international situation to strengthen its financial position while dragging Jiaflix through the mud in the process. “Through a major campaign to the media in China and in the United States, Pangu has falsely stated that an entity called Jiafu China Ltd is a part of or affiliated with Jiaflix Enterprises LLC, the US based company that has participated in the production of the picture since April, 2013. This is completely false…We do not understand why Pangu, which is presented in an extraordinary manner to the world in Michael Bay’s Transformers 4, would make such inaccurate assertions. Perhaps the answer is found in a court filing yesterday in which Pangu demanded $1.8 million and, if successful, would result in Pangu receiving all of the benefits and placements in the film for free,” the statement says. (Full statement appears below).
Leveraging an issue to delay or prejudice an audience against a picture isn’t unique to China. Paramount was forced to do damage control earlier this year on Noah. For instance, when a group came out of the woodwork, trying to gain a foothold and purporting to speak for faith-based moviegoers, getting media to publish a survey that indicated audiences wouldn’t go see Noah, even though that survey never really mentioned the upcoming film. The studio fought concerns all the way through that director Darren Aronofsky hadn’t hewed closely enough to the Old Testament.
I spoke briefly with Ganis about all this. He said he and his partners waited until Paramount and Pangu settled the beef, but he too was concerned by a China-based company leveraging the possible delay of a film release to get what it wanted.
“These were very heavy accusations, and we felt important that we get the record straight,” he said. “Yes, there is the element of eggshells, but we needed to make clear that we are what we claim to be. The accusations were so skewed, and inaccurate and false, the partners decided to do this, eggshells aside. We were careful, and showed it to our Chinese partners. There is a lot at stake, particularly with a film like Transformers, where the potential is pretty big. We needed first to make sure the film would open on the 27th and it is now clear that it will and that Paramount and Pangu have come to the agreement that Pangu will not attempt to prevent that opening. That’s pretty good, but the mere fact they were attempting to hold up release of this film in China, where, just like any country in the world people are anxious to see it, and a company makes false claims to hold up that release, is not so cool.”
Here is the full statement:
BEIJING, CHINA – Pangu Investments Ltd., through a series of false press statements, false filings with a court in China and false statements made to the film authorities of China had been attempting to have the China release of Transformers: Age of Extinction delayed thereby keeping it from the millions of fans in China who desire to see the movie, harming the movie theater chains that were planning on a major China wide release, and keeping the significant China elements in the film from being viewed throughout China.
We delayed responding to these false accusations until today because we did not want to distract from the incredible World Premiere Transformers 4 enjoyed in Hong Kong, its prestigious position as the closing film at the Shanghai International Film Festival and the China Premiere held in Beijing last night.
We are pleased to hear that Paramount and Pangu, in a press conference yesterday, publicly stated they have resolved the differences and that Pangu will cease all activity to delay the release of the film and is now in fact fully supportive of the release of Transformers 4 on its June 27 date.
Through a major campaign to the media in China and in the United States, Pangu has falsely stated that a entity called Jiafu China Ltd is a part of or affiliated with Jiaflix Enterprises, LLC, the US based company that has participated in the production of the picture since April 2013. This is completely false.
Pangu also claimed that Paramount and Jiaflix breached a contract with Pangu. However this is also false and inaccurate. The contract presented by Pangu does not have either Paramount or Jiaflix as a party. Further the purported contract is unsigned, not dated and has many blanks in it.
In fact there was a single contract that has been signed by all the parties, was announced at a press conference last June attended by all the parties and has been fulfilled by the parties. That contract was signed on behalf of Pangu by a person who presented a stamped Power of Attorney to sign on behalf of Pangu, represent Pangu in all matters related to it and included a number of specific material terms that were included in the contract. In fact, a report at the time from the state-run China Daily newspaper identified him as an official representative of Beijing Pangu Investment Co. Additional Pangu representatives also attended this press conference.
We do not understand why Pangu, which is presented in an extraordinary manner to the world in Michael Bay’s Transformers 4, would make such inaccurate assertions. Perhaps the answer is found in a court filing yesterday in which Pangu demanded $1.8 million and, if successful, would result in Pangu receiving all of the benefits and placement in the film for free.
Jiaflix and its partners, China Movie Channel and M1905, have worked in a harmonious, professional and cooperative manner with SARFT, China Film Group and all the relevant governmental authorities. The result is an exceptional movie that presents China extremely well to the world that will be enjoyed by millions of fans throughout China and the world.
Jiaflix has had an extremely intimate and trusting relationship with Paramount Pictures on this film and conducts itself to the highest standards of integrity and professionalism. Jiaflix has exceptional trust among all of its co-founders and is committed to the highest levels of performance and ethics. Our focus is on long-term success for all of the parties we work with and to advance policies that achieve positive goals.
We appreciate this opportunity to set the record straight.