Witzke notes that Chinese investment in entertainment rose in 2020-21 but that was almost entirely due to Tencent buying large stakes in Universal Music Group. “This caused a major fall in outbound FDI in sector and more broadly,” he says. The spending began to slow after Chinese regulators saw the exodus of capital and introduced new rules on “irrational” investments in 2017, which restricted spending in several sectors, including entertainment, says Mark Witzke, senior analyst at Rhodium. “There was still some quiet investment in the Trump years, but today it is pretty much non-existent.” The Chinese buying spree in Hollywood “got out of hand and came to a crashing halt,” says Bennett Pozil, head of corporate banking at East-West Bank, which was an active dealmaker during the period. Last year Wanda sold off its shares in AMC and reduced its ownership of Legendary. Ultimately he became a seller instead of a buyer, shedding a prime property development site in Beverly Hillsand abandoning a bid to buy Dick Clark Productions for $1bn. (He tried to acquire Paramount but failed.) Wang Jianlin, Wanda’s chair, boldly declared that he wanted to buy one of the big Hollywood studios. Perhaps the most high-profile was Dalian Wanda, which had already paid $2.6bn for the AMC cinema chain in 2012. Many of the Chinese companies stretched too far, however, attracting unwanted attention from Beijing. This is most likely due to being offline or JavaScript being disabled in your browser. You are seeing a snapshot of an interactive graphic. Other significant deals included a $500mn investment by Perfect World in Universal movie slates, and a partnership between Tencent rival Alibaba’s movie business and Steven Spielberg’s Amblin Partners, with Alibaba taking a minority stake and board seat. Much of that money came from Dalian Wanda, a property and entertainment group that paid $3.5bn for production company Legendary Entertainment. The peak came in 2016, when Chinese companies invested roughly $4.8bn in US media and entertainment companies, according to Rhodium. The deal flow was prodigious,” recalls Stephen Saltzman, head of the international entertainment group at law firm Fieldfisher. “There was a tsunami of both capital and interest coming to Hollywood from China. In 2012, Chinese money began to pour into the US media and entertainment sector - about $2.7bn, representing a whopping 37 per cent of China’s total foreign direct investment in the US that year, according to Rhodium Group, a research firm. And Chinese companies, flush with cheap capital, were keen to learn the art of moviemaking and help their country develop its own version of soft power. It offered studios an opportunity to tap into a vast, freshly minted middle class in China, where cinemas were being built at breakneck speed. It is one of a handful of relationships that remains intact from the 2010s China-Hollywood boom, including Huayi’s investment in AGBO, the production company run by the Russo brothers - the team behind many of Marvel’s biggest superhero hits.įor a while, China’s bold push into Hollywood seemed like good business for both sides. Though it missed out on a cut of the Top Gun earnings, Tencent retains its minority stake in Skydance. Globally, Top Gun: Maverick has taken more than $1.4bn at the box office since its release in May, and it is still playing in cinemas. That decision - while a smart domestic political move - cost Tencent a stake in the fifth-best performing film ever in the US. Tencent, the world’s largest video games group, pulled out of the investment after executives grew concerned that the Chinese Communist party would be unhappy with its support of a film glorifying the US military. But like much of the relationship between China and Hollywood itself, Tencent’s potential Top Gun profits fell victim to great power politics. Tencent had invested in Skydance a year earlier, just one of dozens of deals between Chinese companies and Hollywood studios during the 2010s. In 2019, Tencent Holdings of China made a savvy call on a future box office smash by agreeing to co-finance Top Gun: Maverick with Skydance, a Hollywood studio. Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
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