助力抢滩好莱坞
China will need to rely on intermediaries to succeed in Hollywood（664words）

By Henny Sender

------------------------------------------------------

Last week Relativity Media, a Hollywood film studio, filed for bankruptcy protection. But even before its fall from grace, Chinese companies including Alibaba Pictures, Baidu, Dalian Wanda, Tencent, and Huayi Brothers Media Corp had been eyeing the business closely.

A lot of Chinese money has already found its way into California. In the past year Chinese investors have put billions into Silicon Valley companies including Uber, Airbnb and LinkedIn.

But of late China Inc has become increasingly focused on the US film industry — in a bid to crack how to make Hollywood blockbusters with Chinese characteristics. This relationship has a natural complementarity. US studios have the know-how but are cash-strapped and risk averse, while the Chinese have abundant capital and an appetite for risk, which lends itself to financing films.

Hunan Television and Broadcast, a government-controlled company, has already put $375m into Lions Gate Entertainment, the studio behind the blockbuster action film series The Hunger Games. Fosun, a privately held conglomerate, plans to spend up to $200m backing Studio 8, an independent studio founded by Jeff Robinov, former head of Warner Brothers. And an arm of Citic, the Chinese state-owned group, has committed $125m to a venture run by Dick Cook, a former Walt Disney executive.

Certainly, the economic fundamentals make sense. China is already the second-largest movie market after the US by value of tickets sold, and it is expected to become the largest by 2020. If the country is to shift from a manufacturing-led, export-driven economy to one based on domestic demand and services, entertainment will become ever more important.

For non-Chinese companies seeking to profit from this growth market, local partnerships offer a way of keeping a greater share of revenues. Regulations restrict the number of entirely foreign films that can be shown and the percentage of box revenues that foreign studios may collect.

It is for these reasons that Chinese technology companies have been visiting Los Angeles in search of content, strategic investors and film distributors. A few months ago, Sequoia Capital China was part of a large contingent of Chinese entrepreneurs that spent days with executives at Fox, Sony Pictures Entertainment and STX Entertainment.

New companies are also looking at getting involved. Li Ruigang, former president of Shanghai Media Group, is heading up China Media Capital, a vehicle to invest in content on both sides of the Pacific. Some of the most successful technology entrepreneurs and investors in China want to take big stakes in CMC. In addition, some strategic players are considering partnering with online asset management firms in China to help crowdfund potential acquisitions.

Donald Tang, a former Bear Stearns executive who shuttles between Los Angeles and Shanghai, has formed a venture with backing from Tencent and others to capitalise on this trend. He has already orchestrated two of the biggest marriages between Hollywood and China: he was deeply involved in Dalian Wanda’s $2.6bn purchase of AMC, the US’s second-biggest cinema chain, and Huayi’s commitment to put hundreds of millions of dollars into STX (which also has money from China-based Hony Capital and the growth capital arm of TPG, the private equity firm).

Of course, the Chinese are not the first to succumb to the lure of Hollywood. But whether they succeed will depend on their willingness to accept a reliance on intermediaries and co-investors, such as Mr Tang. “They have a lot of ambition but not a lot of knowledge,” says one mainlander familiar with the Chinese initiatives.

Historically, Chinese companies have been reluctant to pay for advice — or acknowledge their need for it. Yet it is often not enough simply to pay the highest price. Sellers want certainty that a deal will be done, but all too often Chinese buyers fail, either because they cannot get approval or because they lack the financing.

Still, one day it will probably be a Chinese dragon that roars out from American movie screens before the opening titles roll.