Paramount films to get mainland funding
Viacom Inc’s Paramount Pictures reached a co-financing agreement with Shanghai Film Group and Huahua Media that will help the money-losing studio pay for movie production over the next three years.
The deal could be worth as much as $1 billion, according to two people with knowledge of the matter who asked not to be named because the terms are private. Shanghai Film and Huahua Media will co-finance Paramount’s full movie slate over the period, the companies said in a statement on Thursday.
They will open and jointly maintain an office on the Paramount lot starting this year, according to a statement.
The financing solves a longterm money problem for Paramount, whose parent Viacom had at one time considered selling a stake in the studio to Chinese bidders. The studio has struggled at the box office in recent years and posted a loss of $445 million in fiscal 2016.
“Shanghai Film Group’s long and successful history as a prolific studio, coupled with Huahua’s strong track-record in the Chinese market and its growing reach globally, make this a natural and powerful move for Paramount,” Brad Grey, Paramount’s chief executive officer, said in the statement.
The agreement underscores the continued interest in US filmmaking among Chinese companies. Dalian Wanda Group Co, led by China’s second richest man, owns Legendary Entertainment and controls AMC Entertainment Holdings Inc, the largest US theater chain. Other studios have teamed up with Chinese partners to improve their access to China, soon to be the world’s biggest box office market. Sony Corp recently struck a similar strategic partnership with Wanda.
Paramount also said in the statement it will pursue Chinese co-productions, which allow US studios to keep a greater share of ticket sales in China. The company previously sold stakes in individual big budget films to Chinese companies, such as Alibaba Group Holding Ltd.
Paramount has also partnered with Huahua Media on several films, including “Transformers: the Age of Extinction.” Shanghai Film Group is an investor on Paramount’s “Jack Reacher: Never Go Back,” which came out in October.