2ND UPDATE, 3:34 PM: Consistent with STX’s plan to become a major Hollywood studio which would stand toe-to-toe with Universal Pictures and Sony Pictures, Deadline has learned that any deal with Huayi Brothers is expected to include a bare minimum of 18 pictures in an overall funding deal with the Chinese concern. In fact, this could be a small fraction of what the relationship might ultimately entail.
What’s interesting is that the STX/Huayi deal is consistent with ambitions previously announced by STX, and to date, everything that they said they were going to do in March of 2014 — from ramping up quickly with execs to putting pictures into the pipeline — they have followed through on. We hear that more information will be forthcoming at month’s end. If all goes as planned, that kind of output would surpass Paramount.
By joining with STX, it allows Huayi a major entre into the film business while allowing STX a faster rate to achieve its already announced goals — to become a major studio. The company has already ramped up with executives, established a multi-year output deal with Showtime Networks to air their slate of films (an agreement that takes them through 2019), and negotiated separately with the nation’s exhibitors — AMC Theaters, Regal Entertainment Group, Cinemark and Carmike to carry their films. The agreement with the exhibs ensured the company a certain amount of screens each year. They also have put a number of films into the pipeline.
The first pic in the STX pact is writer-director Gary Ross’ Free State Of Jones, the fact-based drama that has Matthew McConaughey aboard to play Newton Knight, the leader of one of the greatest rebellions in Civil War history.
They are also doing a remake of the 2010 Oscar Best Foreign Language Film The Secret in Their Eyes, which has also begun production. That one Chiwetel Ejiofor, Nicole Kidman and Julia Roberts. Also shooting is an untitled, contemporary adult thriller from producers Rebecca Yeldham and Jason Blum’s Blumhouse that explores if bygones are really ever bygones. Jason Bateman, Rebecca Hall, and Joel Edgerton star. Edgerton is making his directorial debut.
UPDATE, 12:35 PM: It’s understood that all sides are under the gag order, but Deadline can confirm that STX Entertainment is the Hollywood studio that has made a deal with China’s Huayi Brothers Media Corp. That entity, the Middle Kingdom’s largest privately held film company, revealed last night that it planned to sign an 18-pic co-financing, co-producing and co-distributing deal with a U.S. company — though for some reason it did not reveal which company it was.
The largest stakeholder in STX actually is TPG Growth, a global private investment firm backed by parent TPG, which together have invested in CAA, Sabre Holdings (Travelocity), Evolution Media Growth Partners and Univision, to name a few. The head of TPG Growth, Bill McGlashan, lived in China for five years and has done business with the Chinese for a quarter-century. China-based Hony Capital is also part of STX.
Variety first broke the news of STX’s involvement.
The addition of Huayi Bros expands STX’s relationships with the Chinese. McGlashan told Deadline previously that STX planned to develop content for both the domestic and Chinese market. “We’re a big investor in China,” he said.
There’s still no word on the partner for fellow China company Beijing Enlight Media Co., which also said it is partnering with an unnamed U.S. company on a major film franchise based on a best-selling book series.
PREVIOUS, 8:53 AM: Mystery surrounds the identity of the two U.S. companies purportedly the beneficiaries of major investments from two of China’s leading film companies: Huayi Brothers Media Corp. and Beijing Enlight Media Co.
Huayi Bros., China’s largest privately held film company, plans to sign an 18-pic co-financing, co-producing and co-distributing deal with an undisclosed American company, according to a filing with the Shenzhen Stock Exchange. “This is not only a step for Huayi Brothers’ internationalisation, but also the internationalisation of all Chinese film companies,” per the filing.
Seemingly separately, Beijing Enlight Media Co., which last month announced that e-commerce giant Alibaba had acquired an 8.8% stake valued at $380 million, said it was in talks to co-finance and co-produce a major film franchise based on a bestselling series of books, also with an unnamed foreign company.
Reports have apparently ruled out any of the six studios or the likes of Lionsgate and IM Global being part of the deals. Lionsgate said last week it had closed its deal, first reported in January, with China’s Hunan TV for $375 million in production funding — approximately 25% of the entire Lionsgate production slate — over the next three years.
Alibaba inked its own deal with Huayi Bros last November that covers e-commerce, online entertainment and movie development. The deal will see Alibaba invest 5%-10% of the budget on five Huayi films over the next three years with the two working together on distributing the projects.
The pseudo-announcements from the two top companies raised eyebrows both in Hollywood and in China. “Is it normal in the West when you’re announcing a deal not to mention both parties?” asks one senior Chinese film exec. “I don’t think so. It’s not normal in China either. I’m not saying the deals aren’t real, but maybe they haven’t closed them yet. It’s strange.”
Film announcements coming out of China have been a dime a dozen in recent months as deep-pocketed players from the Middle Kingdom seek to increase their influence in the film biz and Western execs appear all too happy to help them spend their cash. While some of these announcements/deals have fallen by the wayside — just witness Jeff Berg’s ill-fated experience with Bison Capital — Huayi and Enlight are two stellar companies with solid track records. Huayi Bros previously considered investing some $120 million in Jeff Robinov’s Studio 8 before pulling back at the last minute. The company eventually launched its own fully-owned U.S. division capitalized to the tune of $130 million.