Warner Bros is reportedly in talks with China Media Capital to launch a local language joint venture that will produce films for the Chinese market. The possible development comes as China experiences its worst economic crisis in generations. China’s Shanghai Composite index continued to fall precipitously on Tuesday, losing another 7.6%. That follows on from the so-called ‘Black Monday’ when the Shanghai Composite index lost 8.5% in the biggest sell-off since the Asian economic crisis of 2007.
The joint venture with China Media Capital- a state backed investment fund- will reportedly see Warner Bros investing $50 million. A rep for Warner Bros declined to comment when contacted by Deadline. Hollywood has been hungrily eyeing the Chinese market, both in terms of getting a piece of the growing domestic local box office as well as attracting Chinese equity to invest in English language productions. Lionsgate officially entered into a multi-year deal with China’s Hunan TV & Broadcast Intermediary for co-financing, distribution, development and production its slate in a deal worth up to $375 million. Robert Simonds’ STX Entertainment signed a major financing agreement with the Huayi Brothers. Jeff Robinov’s Studio 8 received a $200 million from China’s Fosun Group, while on a more modest scale, Jack Ma’s Alibaba Pictures invested in the latest instalment of Paramount’s Tom Cruise secret agent pic Mission: Impossible – Rogue Nation.
The studios have a long history of local language productions, with the likes of Fox and Disney signing deals in Europe, China and India for local language productions across both film TV. Warner Bros has also been active under the much-respected stewardship of Richard Fox, WB’s long-standing EVP of International. It is unclear at this stage if the new venture- if that deals closes that is- will come under Fox’s auspices or a separate corporate structure within Warner Bros. WB can boast of a long list of local language hits- in France, for example with A Very Long Engagement and Coco Before Chanel.
While China’s box office has Hollywood execs salivating- Furious 7, for example, grossed close to $400 million in the Middle Kingdom- both the quota system, with only 34 foreign films allowed to be released in the country every year, as well as a revenue sharing system that means studios only get 25% of ticket sales, has pushed execs to develop official co-productions to bypass those limits.
China Media Capital already has a joint venture with Dreamworks Animation SKG. News of the potential deal was first reported by the Wall Street Journal.