Paramount Pictures has revived its $1 billion slate deal with two Chinese media companies, which was presumed dead last month, according to several sources.
The studio’s new Chairman and CEO Jim Gianopulos, who took over the studio in March, traveled to Beijing last week to try and resurrect the deal with Shanghai Film Group and Huahua Media. He was accompanied on the trip by a Viacom executive as well as some Paramount colleagues, including worldwide marketing and distribution president Megan Colligan. The Paramount team was there to promote this summer’s tentpole sequel “Transformers: The Last Knight” at the Beijing International Film Festival.
First announced in January, the Chinese financing deal hit a roadblock in March as China continued to apply greater scrutiny to overseas investments.
Though listed on the Shanghai stock exchange, Shanghai Film Group remains majority state-owned. State-owned companies have been subject to especially strict regulation on overseas investment since the Chinese government began its measures in November to bolster its currency and curb speculation. Huahua Media has significant operations offshore, and was able to provide its share of the payments under the agreement. But Shanghai Film Group struggled to hold up its end of the bargain.
The deal was originally brokered by Brad Grey, who was then Paramount’s chairman and CEO. Grey departed in February, leaving a question as to whether the Chinese investors would choose to stay in the deal under Paramount’s new leadership.
As originally announced, the co-financing agreement would have the two Chinese firms investing in all of Paramount’s films over the next three years. Sources in China close to the deal said the parties discussed with Gianopulos what specific films they were going to invest in. It’s believed that the resurrected deal did not include all of the movies on Paramount’s slate. They also said the parties have an option to extend for a fourth year on the same terms. The two Chinese firms would have their own office on the Paramount lot.
Both companies have previously partnered with Paramount on individual films. Huahua Media, a marketing and distribution firm, partnered on the marketing of “Transformers: Age of Extinction” and “Star Trek Beyond,” among others, while Shanghai Film Group and Huahua Media were invovled with the China release of “Jack Reacher: Never Go Back.”
Last year, Paramount seriously explored selling a 49% stake to China’s Dalian Wanda Group, but the Viacom board ultimately rejected the plan.