Hollywood loves money, but it’s getting less of it from China than had once been in the pipeline.
Billions of dollars once flowed in from China, with even more promised, but tightened restrictions on overseas investment, as well as changes in the business climate in entertainment, have seen many deals fall apart.
CGTN’s Phil Lavelle reports.
Matt Pressberg is a freelance reporter who specializes in the relationship between Hollywood and China. He explained to CGTN, “There’s been a regulatory crackdown in China that’s really put the clamps on cross-border investments, particularly in entertainment, and there’s also been economic reasons. There’s been some changes in the Chinese box office and there’s been some impacts in terms of major studio owners here in Hollywood that have gone through financial challenges of their own.”
For a while, it looked like China was going to save Hollywood in an era of tight budgets, while blockbusters still cost a fortune to make.
According to research from the Rhodium Group, investments shot up in the years following 2013, when Chinese investment totaled about two million dollars. By 2016, that figure had hit nearly $4.8 billion. But then in 2017, Chinese funding dropped precipitously. Through September 2017, it was down to just below $490 million for the year.
Some studios saw promises of cash simply disappear. China’s Recon Holdings dropped its plans to take a $100 million controlling stake in Millennium Films. Dalian Wanda Group canceled its one billion dollar acquisition of Dick Clark Productions as well as plans to integrate Legendary Entertainment into its own film company. China’s Huahua Media pulled out of an agreement to invest one billion dollars in Paramount Pictures.
It’s a drama that Hollywood could have written as a script.
Entertainment expert Kathryn Arnold has a prediction for what comes next: “If they’re not going to get the money from China or the foreign markets, they’re going to have to look at the digital companies who are looking for more and more content. For gaming, for mobile, for over-the-top boxes, there’s always a need for content with these new media suppliers and they are going to have to make deals with the studios. Whether that’s for long form and/or short form programming.”
For a place that trades on the happy ending, it’s finding its own story a little less magical.
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