China’s newer ‘Great Wall’ shaping up to be less of a long-lasting earner

Hollywood’s top action hero, China’s most prominent film director, and the financial backing of the country’s richest man still might not be enough to pull LeEco out of trouble waters

PUBLISHED : Thursday, 29 December, 2016, 4:25pm
UPDATED : Thursday, 29 December, 2016, 11:02pm

The Great Wall, China’s most expensive film, looks like turning into another money loser for beleaguered Chinese tech giant LeEco, which was betting big that the Hollywood-Chinese co-production would revive flagging investor confidence in the company.

Directed by Oscar nominee Zhang Yimou and starring top US A-lister Matt Damon and Chinese favourites Andy Lau and Jing Tian, the English-language monster-action big-screener costing US$150 million had every reason to be dubbed “the biggest film ever shot in China”, backed by Dalian Wanda Group’s Legendary Entertainment – itself owned and under the watchful eye of China’s richest man Wang Jianlin – and Hollywood’s iconic studio Universal Pictures.

Zhang, who orchestrated the opening ceremony of the 2008 Beijing Olympics, produced the epic with China Film Group and Le Vision Pictures, the film-making unit of LeEco.

But despite its hoped-for blockbuster appeal and such a hefty list of heavyweight backers, mercenary warrior Damon’s efforts at fighting giant monsters to save the Middle Kingdom has failed dismally to impress the critics, and after netting just US$128.04 million in its first fortnight.

Le Vision invested an estimated US$15 million into the film. Experts suggest the movie needs to take in US$450 million at the turnstiles not to be considered a box-office flop.

But in reality analysts now believe it could even fall short of Legendary’s summer offer Warcraft’s total US$211.83 million since June this year.

Zhang’s monsterpiece made a muscular start in its opening weekend, notching up more than US$66 million in takings – but earnings plunged a staggering 61 per cent over the Christmas weekend, according to data from industry researcher Ent Group.

Of course, Christmas is not a national holiday in China, but in recent years the season has emerged as a popular shopping and date-night occasion among young urban Chinese, usually resulting in a healthy box-office frame, according to The Hollywood Reporter.

Despite nationwide hype, The Great Wall lies in second place in the domestic box office rankings after Jackie Chan’s latest action-comedy Railroad Tigers.

The country’s largest cinema operator Wanda even allotted The Great Wall the film more than 50 screening slots among its cinemas across China, which usually ensures better takings, which certainly should have at least pushed it towards covering its huge budget.

The much-vaunted saviour of Chinese cinema actually currently ranks the 11th biggest grosser of the year in China, lagging behind Captain America and home-grown offerings such as Stephen Chow’s The Mermaid, which has netted US$553.8 million after costing a rather-more modest US$60.72 million to produce.

Ray Zhao, an analyst with Guotai Junan Securities, reckons “it will be impossible for The Great Wall to even break even, given a film normally needs to earn three times its budget to do that”.

Filmgoers themselves gave The Great Wall a shoulder-shrugging5.4out of 10 on Douban.com, a Chinese movie-ranking platform the equivalent of Rotten Tomatoes, and 5.5 on movie database imdb.com’s ranking system.

Some were confused by the mix of Chinese and American elements in the filmmaking, and wondered who the film was meant to attract, Li Yi, a 29-year-old high school math teacher told the Los Angeles Times.

“Which audience is the film targeting? Older? Younger? Chinese? Foreigners? I can’t figure out who will prefer a film that is neither very Chinese nor very Western.”

The flashy colours, ancient weapons and aerobatic war scenes contributed little to the overall plot, she said, damming it, “a waste of time”.

Some high-profile film critics have also resorted to social media to publicly lambast producer Zhang himself.

“The storytelling is awful and the characters look so plain,”said one, using the handle Disrespecting Movies, whose account has 740,000 followers on China’s Twitter-equivalent Weibo.

“Zhang’s career is dead,” he even concluded.

Clearly irritated by the narrative, Le Vision chief executive Zhang Zhao himself launched his own a barbed social media spat with Disrespecting Movies.

“You who curse Chinese films are doomed to rot,” he wrote on his microblog, before publishing a legal letter demanding the critic apologise.

“People already had very high expectations of The Great Wall, but bad reviews spread like wildfire and discouraged many potential moviegoers from going to see it,” said Huang Guofeng, a Beijing-based analyst with consultancy Analysys International.

This is the third big-budget movie to be given generous financial backing by Le Vision Pictures, and had been seen by some as its last genuine chance of delivering healthy income to its flagging annual ledger.

LORD: Legend of Ravaging Dynasties, an animated fantasy starring China’s best-paid actress Fan Bingbing, in which Le Vision ploughed an estimated US$22.2 million, also flopped, even during China’s so-called “Golden Week” holiday this year, with earnings slumping after just the opening day.

Both have added to the gloom of Le Vision’s parent LeEco – whose Shenzhen-listed arm Leshi Internet Information and Technology Corp agreed in May to buy Le Vision for US$1.41 billion, four times the latter’s net asset value.

According to the terms of the agreement, Le Vision is obliged to generate at least US$74.9 million yuan to net profits for 2016.

“Le Vision was taken a huge bet – but now the chance of meeting that goal is extremely slim,” said Huang, adding it had also expected the film’s success to bolster overall investor confidence in LeEco.”

The company, which has invested in several high-tech products ranging from electric cars to smartphones, has been burning cash to support its global expansion.

In May, LeEco bought a 48-acre plot in San Jose, California from Yahoo to house its new global headquarters that will have capacity for 12,000 employees.

It also bought Vizio, the second largest TV brand in the US for $2 billion, according to Forbes, and financed Faraday Future, a Los Angeles-based electric car startup that is building a factory in Nevada.

But last month, chief executive Jia Yueting – whose estimated net worth of $6.2bn placed him 31st on the latest Hurun Rich List for China – watched the company’s shares plummet after he

admitted it was facing a shortage of cash and was suffering from rapid expansion in too many directions.

“LeEco’s expansion is too fast, and that has caused great challenges to our organisational capacities and fundraising,” Jia said in a lengthy letter to staff.

It then halted trading in its shares in Shenzhen earlier this month, prompting speculation a stock plunge on December 6 triggered margin calls on the credit of Jia and his brother.

It might just take a little more than muscle than Matt Damon to pull Jia and his embattled company out of this particular.

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