MCA Inc. is in conversations with South Korean conglomerate Daewoo Corp. for a deal that would help the studio reach its goal of raising $100 million for 10 to 12 pictures. Sources said no deal is concluded.
Knowledgeable insiders dismissed rumors that MCA was also in talks with Daewoo competitors Samsung and Hyundai (independently of each other. However, once Samsung and Hyundai are aware of Daewoo’s talks, they are likely to come to the table to negotiate as well. Samsung is one of Daewoo’s main competitors in the media business, while Hyundai has been an aggressive investor in the entertainment business over the past year.
The three cash-rich South Korean companies have been digging into their bank accounts over the past couple of years to invest in the entertainment industry. Their strategy fits in well with MCA’s announced plan to find partners for co-financing pacts to help offset some of the company’s risk. The arrangement would be similar to a strategy MCA chairman and CEO Frank Biondi and Viacom Entertainment Group chairman Jonathan Dolgen began when they worked together at Viacom.
One model being suggested for a pact between the studio and the Korean conglomerates is the Walt Disney Co.’s Silver Screen Partners from the early to mid 1980s.
It’s unclear how any MCA deal with the South Koreans would affect the studio’s joint overseas distribution company United Intl. Pictures, which was the first U.S. company to break into the difficult South Korean marketplace several years ago. UIP is a joint venture of MCA, Paramount and MGM. MCA has wanted to find a way out of UIP. The recent litigation between Viacom and MCA parent Seagram over the former’s TV Land cable net could hasten the breakup of UIP.
This is not the first time Daewoo has flirted with Hollywood. Daewoo joined with Morgan Creek Prods. in the company’s bid for MGM in what was expected to be a $200 million commitment (Daily Variety, May 4). Daewoo Intl. America Corp., Daewoo’s main subsidiary, generates sales of $913 million per year from such businesses as electronics, steel, textiles and auto parts.
Meanwhile, Samsung – which is South Korea’s largest industrial conglomerate – earlier this year bought a 7.4% minority position in Arnon Milchan’s New Regency Prods. for $60 million. Samsung execs visited the DreamWorks offices on the Universal lot last April, but decided against investing in the former company. Instead, Miky Lee, the niece of Samsung chairman Lee Kun Hee, personally took a stake in DreamWorks. Samsung had sales of $75 billion last year.
Hyundai, which is best known for its automotive sector, recently inked an 11-picture deal with Miramax Intl. through its subsidiary Diamond AD. In May Hyundai also made a distribution and co-production pact with Studio Canal Plus, the Gallic pay TV company’s film arm. Hyundai also recently invested in L.A.-based Saban Entertainment.