China’s Chengdu, Canada’s Stratagem Launch $200 Million Film Fund (EXCLUSIVE)

Chinese and English-language versions of “Turandot” are set to be the first two movies produced through a new partnership between Canada’s Stratagem Entertainment and Chengdu Tianyin Culture Communication Co. (CTCCC). The relationship also involves the establishment of a $200 million production fund, expected to back a slate of six to eight films over a five-year period.

The deal is in addition and separate to Stratagem’s recently hatched $800 million deal with China Film Group, New Zealand’s Huhu Studios and China Film Co-Production Corp.

CTCCC is a state-owned enterprise backed by the Chengdu city authorities, Sichuan Province and the Old Silk Road Investment Fund.

The Turandot films are based on the legend of Turan-Dokht, written by Haft-Peykar, in which a determined prince has to solve three deadly riddles in order to marry a disdainful princess. It was previously adapted as an opera by Giacomo Puccini.

CTCCC chairman Chen Yong Ning is in advanced talks with a high-profile commercial director to helm a broad comedic version for Chinese consumption. He expects to confirm the director and announce key cast by next month’s Shanghai film festival.

Chen is also in advanced talks with Wanda Cinema, Alibaba and Bona Film Group to join the film as investors and Chinese domestic distributors. Alibaba may also commit as technology partner marketing the movie and selling theatrical tickets through its e-commerce platforms. Chen and Stratagem chair/CEO Michael Cerenzie will produce, with Matt Vegh and Fang Yi Ning executive producing alongside Trevor Yaxley of Huhu.

An English-language version with more global appeal would follow next year. The Chinese investors would likely also join the English-language movie as well. Stratagem, handling global rights outside China, will seek to bring on board a mini-major or Hollywood studio as both investor and multi-territory distributor.

“‘Turandot’ is designated (by the Chinese government) as an ‘Important National Film Project’ and we envisage a genuine cultural exchange with Western actors in the Chinese version and Chinese in the English-language movie,” said Cerenzie. Both will be structured as full co-productions, making them automatically eligible for Chinese domestic distribution as well as potential soft money contributions from Canada.

CTCCC and Stratagem have committed $100 million each to the fund, with a portion of the slate produced as China-Canada treaty co-productions. “The fund would support the negative cost of the movies, but we’d want to lay off some of the cost and bring on a distributor who has skin in the game,” Cerenzie told Variety. “Budgets for the Chinese movies would typically be in the $10 million-$20 million range, while the English-language title would be $25 million-$30 million.”

Stratagem has recently been instrumental in working closely with China Film Animation CEO Huang Jun and Huhu Studios’ CEO Yaxley to launch the 3D animated feature “Beast of Burden,” the one of the first China-New Zealand collaborations. The film was greenlighted last month by La Peikang, chairman of China Film Group, Yaxley and Qi Tai Cultural Developnement Group. Cerenzie is the film’s executive producer with Stratagem representing international rights and William Morris Endeavor’s Graham Taylor representing North American rights

“Burden” is destined to be the first title of a 17-picture, $800 million slate backed by CFG, CFA, CFCC, Stratagem and Huhu. It would be followed by eight animation films and eight live action films over the next six to eight years.

Under the deal terms CFG and its affiliates will finance up to 55% of the proposed budgets of the films on the slate, regardless of whether or not the films are Chinese initiated. Automatically triggered-co-production finance will bring in up to a quarter of the production finance.

Under their deal Cerenzie will serve as the executive producer on all China-New Zealand animated features under treaty co-productions with New Zealand and as a producer for Stratagem Entertainment on all other animated films. Cerenzie and Stratagem will serve as the lead producer and production company on the live action slate, leading the creative process with CFG and Huhu in developing, selecting and choosing the appropriate projects with CFG’s for the live action films. Yaxley and Huhu Studios will serve as a producer on all of the live action films in the slate.

Stratagem Entertainment has all rights of distribution outside of Greater China for all films both live action and animation for the 17 picture slate. Again Taylor will handle domestic rights on the slate, and Stratagem handle other international rights with its affiliates.

Cerenzie says that it is not his intention to tie one Hollywood entity to distrubute the entire slate. Instead he is more likely to break up the package into two or three more manageable, smaller deals.

“These two deals constitute the largest co-production arrangement ever between China and Canada,” said Cerenzie.

China Film Animation’s Jun has already selected a second film, SXD (aka “San Xing Dui Chuanqi”.) It will be produced in English and Mandarin and use top Hollywood and Chinese actors and directors, with a global target audience in mind.

“China Film Group has been very successful in expanding both its domestic and international presence in the animation field and feel that the slate of films will be a great success and allow the world to see the growth of China’s immense creative talents to entertain audiences both in China and globally,” said Jun.

“Our mission at Stratagem is simple. We are striving to create borderless creative content that appeals to the masses on an  international basis and we feel the time is now,” said Cerenzie. He is partnered at Stratagem by Eric J. Henderson and Shamim Ahmed.

(Pictured: Stratagem chair/CEO Michael Cerenzie)

Michael Cerenzie

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