Fosun invests in studio to get Hollywood's know-how
Updated: 2014-06-24 07:38
By Elizabeth Wu in New York and Kelly Zhang in San Francisco (China Daily USA)
Chinese conglomerate Fosun International is taking a stake in new US media company Studio 8 to get Hollywood's know-how into China's film industry, now the second largest market in the world after the United States.
The deal was signed on June 6, Shanghai-based Fosun said in a statement on Sunday, without giving the size of the stake or the price paid. A person close to Studio 8, run by former Warner Bros. executive Jeff Robinov, told the Wall Street Journal that the company expects to have combined equity and debt of around $1 billion to produce films. Fosun is now expected to be Studio 8's primary partner in China.
In its statement, Fosun said it hoped the transaction will introduce "Hollywood's advanced and sophisticated film making expertise and technique, movie concept and technology and complete production and publication systems into the China market, in order to drive the development of the Chinese film industry".
Clayton Dube, executive director of the US-China Institute at the University of Southern California, told China Daily in an email on Monday that "China has attained high technical levels in film and television, but is still eager to master the story-telling and franchise-building prowess that distinguishes Hollywood today.''
"They seek these skills and expertise to succeed not only in their home market but to do what only Hollywood and Bollywood have been able to do: to sell tickets and DVDs abroad,'' he said.
Dube also said that after high-tech and green-tech, many Chinese investors are eager to enter entertainment industries.
"Partly this is because of the glamour associated with the businesses, but it is also because of the importance of content and leisure to China's future,'' he said.
"I think it would be a slight but significant investment in Hollywood, and it would be mutually beneficial to the industry in both countries," Doron Eghbali, a senior partner at Law Advocate Group LLP, based in Beverly Hills, told China Daily about the deal on Monday. Eghbali has represented directors, producers, actors, musicians and others in the entertainment industry.
Robinov said both China and the US possess the film markets with the most influence and potential. "We are excited to unite the markets, teams, technologies and respective advantages and work together on building a number of top-level films including co-production films between China and other countries," he said.
Fosun is a Shanghai-based company controlled by Chinese billionaire Guo Guangchang. It manages different types of business, including industrial operations, insurance, direct investment and asset management. Fosun has invested in other entertainment companies including Focus Media and in luxury brand Follie Follie, fashion brand St. John and resort company Club Med.
Robinov has been seeking $300 million in equity for several months, and Fosun will contribute a substantial, if not majority, amount of that figure, according to the Journal.
Robinov is still speaking with potential investors in Europe about contributing to the equity side of that equation, the newspaper said.
Fosun said it will "exercise significant influence over the distribution arrangements" for Studio 8's movies in the Chinese mainland, Hong Kong, Macao and Taiwan.
Robinov had also been in discussions with Chinese film company Huayi Brothers about investing in Studio 8, but the company chose not to participate this time around, the Journal said.
Robinov worked at Warner Bros. for 16 years, the last six atop the motion picture group, and is known to have strong relationships with filmmakers such as Ben Affleck, Todd Phillips and Alfonso Cuaron. He formed Studio 8 after his exit from the studio last summer. Robinov oversaw movies such as The Dark Knight trilogy and Oscar-winning movies Gravity and Argo.
The investment by Fosun is its latest after a series of purchases from the $725 million acquisition of One Chase Manhattan Plaza in New York City to an 80 percent stake in the insurance arm of Portugal state bank Caixa Geral de Depositos. The company has announced $3.2 billion of acquisitions in the past three years.
The deal is the latest example of Chinese investors' interest in the US film industry. Chinese private equity firm Hony Capital Ltd in March agreed to invest in a new movie studio to be set up by Hollywood producers Robert Simonds and Gigi Pritzker. The Chinese government plans to use tax breaks and subsidies to boost the motion-picture industry, and will use 100 million yuan ($16 million) to support five to 10 films a year, according to a statement posted on the Ministry of Finance's website on June 19.
Contact the writers at firstname.lastname@example.org and email@example.com