Chinese firm Hunan TV in US$1.5 billion deal with Lionsgate films
'Biggest overseas partnership' for nation's film industry will co-finance at least 50 movies
US movie studio Lionsgate has agreed to a Chinese company co-financing its films, it said, in a deal the franchise maker hopes will give it greater access to the Asian market.
A subsidiary of Hunan TV and Broadcast Intermediary Company, TIK Films, would help fund "qualifying" films for the next three years, Lionsgate said.
State news agency Xinhua said that the agreement was worth US$1.5 billion, and described it as "the biggest overseas deal in China's film-making history".
It reported on Wednesday that the deal covered "at least 50 Lionsgate films", with the Chinese firm paying 25 per cent of production costs and receiving 25 per cent "of all returns".
China's box office revenue reached US$4.8 billion last year, making it the first market outside North America to exceed US$4 billion in revenue, according to the Motion Picture Association of America.
"We're delighted to expand our relationship with one of the pre-eminent entertainment brands in China to build our film and television presence in that territory," Lionsgate chief executive officer Jon Feltheimer said.
TIK Films would have an option to distribute four of the co-financed films annually in China, said Lionsgate, which added that the partners were planning to co-produce films in China. The partnership would also extend into theme parks, said Lionsgate, though it did not give further details.
Investors welcomed the news, with Hunan TV and Broadcast shares ending the trading day in Shenzhen yesterday up 5.1 per cent.
Lionsgate had reportedly been shopping for a Chinese partner since last year, holding talks with tycoon Wang Jianlin's Wanda Group and Jack Ma Yun , founder of Chinese e-commerce giant Alibaba, said in December.
Another Chinese company, Huayi Brothers Media, said on Monday that it was planning to jointly produce at least 18 films with an unnamed US company. US reports said the partner was STX Entertainment, a film and television studio led by industry veteran Robert Simonds.
In June last year, Chinese conglomerate Fosun International announced it was taking a stake in US media company Studio 8, and in 2012, Wanda Group bought US cinema chain AMC Entertainment for US$2.6 billion.