China Media Capital Chairman Li Ruigang, a man Jeffrey Katzenberg has called a “visionary,” today warned his compatriots who are eyeing investments in Hollywood to “be smart money, not dumb money.” Li, whose company includes stakes in Imagine Entertainment, NextVR, Broadway Global Ventures, Oriental Dreamworks and IMAX China, was talking about the so-called Chinese invasion of Hollywood. But he said today at the INTV conference in Jerusalem that he does not believe it really is a “big wave.”
Giants like Dalian Wanda, which now owns AMC and Legendary, have shown great appetite for U.S. entertainment assets. A smaller, largely unfamiliar firm, Recon Holdings, recently said it would buy a majority stake in Millennium Films for $100M. Tencent, Huayi, Alibaba and others have interests in Hollywood.
Still, Li continued, “I think that China is not ready to take a big stake in Hollywood.” The reason? “Money is not everything. If you want to have a successful investment and operation or successful acquisition it requires a deep understanding of local culture and more sophisticated execution capability of running and leading. So in this regard, buying a media asset financially or owning a brand legally is not representing that you can run a business operationally and strategically.”
He added, “We should not be that naive.” History is littered, Li contended, with “so many rich guys trying to buy Hollywood. From China, we should be more reasonable, more cautions and smart.”
CMC also has a joint venture with Warner Bros in China called Flagship Entertainment, Li noted, and recently made investments in some NY and Silicon Valley start-ups. “Based on those partnerships, we can gradually get more involved in operations and train our people and have more solid operations outside China.”
Erik Hodge of CMC partner Raine Group chimed in later to agree with Li: “It’s a little bit of hubris to think you can just enter a market without knowing it properly.”