‘The Great Wall’ loss in earnings places future China-US projects in doubt

ALTHOUGH ‘The Great Wall’ earned US$171 million when it was exhibited in China, in North America, the movie earned only US$34.8 million, not enough for producers to recover their capital. With US$75 million loss, there is now a question if Universal Pictures and its Chinese partners would make more movie collaboration in the future.

About US$150 million was spent on producing the movie, but another US$80 million was spent on marketing the movie globally. About onefourth of the production cost came from Universal Pictures, while Legendary Entertainment, China Film Group and Le Vision Pictures split the remaining 75 per cent, according to The Hollywood Reporter.

While film industry experts agree that ‘The Great Wall’ is a failure, the share of Universal Pictures in the loss would be relatively smaller.

It would still get about 10 per cent distribution fee from all cinema revenue – or about 40 to 50 per cent of the film’s box office – plus box-office rentals that it would recover a substantial part of the marketing cost.

There is future income from ancillary revenue such as international and domestic home entertainment, and TV, to further reduce Universal’s loss from the venture. But studios would still view co-productions with China with scepticism, and despite the relatively good financial return, the studios would rather focus on strategic partnerships to further boost their returns.

But despite the failure suffered by ‘The Great Wall’, Eric Handler, analyst of MKM Partners, believes Hollywood producers would be back for more co-productions because the market opportunities are very substantial to ignore. He explained, “The problem with ‘The Great Wall’ in the US was poor reviews. At some point, someone will find the right formula.”

Cinema Blend also noted that the movie started on a bad footing when Matt Damon’s choice as lead actor was heavily criticised for white washing. Although the actor, director and producers defended the decision, it “left a bad taste in the mouth” and affected domestic box-office results.