Hollywood producers Simonds and Pritzker plan film studio with China's Hony Capital
China's Hony Capital is the anchor investor in new venture, which targets mid-budget films
Hollywood producers Robert Simonds and Gigi Pritzker are building a movie studio with a Chinese private equity firm and United States buyout fund TPG Capital, planning to spend US$1 billion in the next five years.
Hony Capital is the anchor investor in the as-yet-unnamed studio, which the partners said on Monday would make eight to 10 "star-driven, mid-budget films" a year and target the global market, including China.
"Seismic shifts in the entertainment industry have produced exciting new opportunities in content, production and distribution," said Simonds, whose credits include Adam Sandler comedies Big Daddy and The Waterboy.
Simonds will be chairman and chief executive. Pritzker, whose Oddlot Entertainment produced Ender's Game and Drive, will be on the board.
The deal is the latest example of Chinese investors' interest in the US film industry, just as the country's movie market has surpassed Japan as the second-biggest in the world.
This month, a group led by Huayi Brothers Media agreed to invest as much as US$150 million in a studio founded by former Warner Bros Pictures president Jeff Robinov. In 2012, Dalian Wanda, operator of China's largest theatre chain, bought exhibitor AMC Entertainment for US$2.6 billion, including debt.
"We are uniquely positioned to successfully partner with traditional distributors in North America, expand in the vast Chinese market and capitalise on new, still-developing digital channels," Simonds said.
The studio plans to finance, produce and distribute 10 films per year, targeting the mid-budget film market that studios have pulled back from in favour of so-called tent-pole movies with the biggest production investments.
As part of the deal, the studio has direct distribution agreements with the largest North American theatre chains, including No1 Regal Entertainment, No2 AMC Entertainment, Cinemark and Carmike Cinemas. The arrangement should ensure wide release of the new studio's films.
AMC Holdings is controlled by Wang Jianlin, China's second-richest man with a net worth of US$13.9 billion.
A growing international demand for films has helped buoy the US film industry in recent years. The Chinese box office rose by about one-third in 2012 to US$2.7 billion, overtaking Japan as the second-largest global market, according to statistics from the Motion Picture Association of America.
From 2008 to 2012, the global box office rose by about 25 per cent to US$34.7 billion, with most of the growth coming from outside the US and Canada.