In a key tie-up between Hollywood and China, Warner Bros has entered into a joint venture with China Media Capital to develop and produce a slate of Chinese-language films, including global tentpoles, for worldwide distribution. Based in Hong Kong and with offices in Beijing and LA, Flagship Entertainment Group Limited will be 51% owned by CMC, with Hong Kong broadcaster TVB holding 10% of the CMC-led consortium. Warner Bros will own the other 49%. Financial terms were not disclosed in the deal which was announced by the partners today in Beijing. The news comes in anticipation of Chinese President Xi’s visit to the U.S. next week.
Plans are to develop, invest in, acquire and produce a wide range of Chinese language films for distribution throughout China and around the world via Warner Bros’ network. The first titles under the new imprint could be released as early as 2016. This confirms — and clarifies — word that first surfaced in late August.
CMC is the state-backed investment fund that also is partnered with Oriental DreamWorks and recently set up a fund with IMAX for investment in a minimum of 10 Mandarin-language tentpoles.
Warner Bros has long been active in local-language production and distribution under the stewardship of Richard Fox, WB’s long-standing EVP of International. Recent successes include Argentina’s 2014 Oscar entry Wild Tales; the Rurouni Kenshin films in Japan; and German smash Honig Im Kopf from Til Schweiger. The executive structure of the new entity is not yet known.
The establishment of Flagship comes as a time when Middle Kingdom box office is at an historic high, having reached $4.6B by summer’s end. The season produced several homegrown hits, including Edko Films’ Monster Hunt which is now the top-grossing movie ever in the market.
While the box office soars at home, Chinese movies have traditionally had difficulty traveling. As the industry looks to increase its global reach, tie-ups like this allow for the exchange of technical expertise and the development of young Chinese talent.
Respected CMC founding chairman Ruigang Li said today, “With the proliferation of platforms available to consumers, premium content is more valuable than ever. This partnership with Hollywood’s most iconic studio will bring Warner Bros’ deep experience in creative storytelling and unparalleled expertise in producing global titles to China’s film industry. It will also further CMC’s commitment to building a premier platform for making films that resonate with both Chinese and worldwide audiences, helping to enhance the cultural exchange between China and the rest of the world.”
WB’s Chairman and CEO, Kevin Tsujihara added, “We look forward to working with CMC in this exciting new venture, as we gain additional insight into the Chinese film industry. Warner Bros has a proud legacy of making great movies, and we’re excited to share that expertise with our colleagues in China. The country’s incredibly rich history and culture provide a huge trove of great stories, and we want to help tell those stories for new generations of filmgoers, in China and around the world.”
This is the latest in a string of deals between China and Hollywood which has seen the studios dig in deeper and also includes attracting Chinese equity to invest in English-language productions. Lionsgate has a multi-year deal with Hunan TV & Broadcast worth up to $375M; Robert Simonds’ STX is in a major financing agreement with the Huayi Brothers; and Jeff Robinov’s Studio 8 received a $200M infusion from China’s Fosun Group. Alibaba Pictures recently invested in Paramount/Skydance’s Mission: Impossible – Rogue Nation and China Film Group has skin in Columbia Pictures’ Pixels, both of which are currently playing in the Middle Kingdom.