Company - - Jan 20,2017
The US film company Paramount Pictures is set to receive a $1 billion cash investment from two Chinese film companies, providing it the much-needed financial support.
As per the agreement, China’s Shanghai Film Group (SFG) and Huahua Media will finance almost 25 percent of all of Paramount's films over the next three years, with an option to extend this support for a fourth year.
The struggling Paramount is owned by media giant Viacom Inc. and is optimistic that the fund will help its future projects to grow. This partnership will also give Paramount a foothold in China, the world’s second largest box office market.
Last year, Paramount was in talks of selling 49 percent stake in the studio to another Chinese real estate conglomerate, named Dalian Wanda Group co. But the deal failed to go through due to a collapsing support among Viacom’s board members.
Later on, Dalian Wanda Group went on to buy a major stake in US film studio Legendary Entertainment in a $3.5 billion deal.
This time around, Paramount has pursued a financing deal so that it can afford to increase the number of films it produces without hampering interests of Viacom. In 2015, Paramount also worked with Alibaba Pictures Group Ltd to promote the Tom Cruise starrer “Mission: Impossible – Rogue Nation” in China.
This deal also follows a trend of tie-ups between China and the US producers, with Chinese investors increasingly lending financial support to boost their holdings in Hollywood. Popular US studios such as Warner Bros, Walt Disney Co, Dreamworks, Lionsgate and STX Entertainment have all made associations with Chinese companies to fund their productions and help boost their presence in China's vast film market.
Shanghai Film Group has already had ties with Paramount, as it was an investor in the latter’s “Jack Reacher: Never Go Back” movie.
Meanwhile, Paramount was recently hit by a poor box-office collection from “Teenage Mutant Ninja Turtles: Out of the Shadows”. Also, its cable channels Nickelodeon and Comedy Central are struggling to maintain their audiences.