Chinese film studio Bona Film Group has recently inked a partnership agreement with U.S. financier TSG Entertainment Finance, aiming to invest in a series of upcoming Hollywood blockbuster franchise titles. This deal is reported to encompass future installments of the highly anticipated “Avatar” and “Deadpool” franchises, among others.
The agreement, officially signed on December 31, is regarded as an extension and expansion of a longstanding relationship between Bona and TSG, which commenced back in 2015. While specific financial details have not been disclosed, the deal involves Bona’s commitment to co-investing with TSG in various film projects, including notable titles like “The Martian,” “Independence Day: Resurgence,” “The Greatest Showman,” “War for the Planet of the Apes,” “Miss Peregrine’s Home for Peculiar Children,” “Alien: Covenant,” and “X-Men: Apocalypse.” These movies were predominantly distributed under the banner of 20th Century Fox.
Such collaborative slate financing deals often offer studios a form of risk mitigation. Typically, the financial backers act as passive investors, exerting minimal or no influence over the creative aspects of the films. However, across a diverse portfolio of titles, they anticipate yielding favorable returns.
In the past, China-U.S. collaborative slate deals were abundant, particularly during the mid-2010s when Chinese entities actively engaged in Hollywood as investors, financial partners, and potential acquisition entities. Nonetheless, significant shifts occurred post-2018 when the Chinese government intervened to curb what it perceived as excessive deal-making practices.
The landscape has since transformed due to a trade and technology dispute between the U.S. and China, leading to a reduction in cross-border business activities. Additionally, the streaming revolution catalyzed consolidation within the studios, with Disney acquiring Fox among the notable industry moves.
Amid these changes, Hollywood films have faced diminished success in Chinese cinemas compared to the pre-pandemic era. Conversely, Chinese productions have surged, dominating both theatrical and streaming markets to such an extent that traditional import quotas may have lost relevance.
Despite the industry’s volatility, Bona Film Group has navigated the challenges relatively successfully. Renowned for commercial and patriotic films, often referred to as ‘main melody’ films, Bona has persevered amid industry uncertainties.
However, the studio encountered its own share of upheavals. Founder Yu Dong extensively borrowed funds to facilitate Bona’s delisting from NASDAQ in 2016, only to face hurdles in achieving a swift IPO on the Chinese stock market until August 2022, when the company finally secured a listing in Shenzhen. Moreover, Bona faced content-related challenges, such as the delay in releasing Quentin Tarantino’s “Once Upon a Time in Hollywood” due to a complaint from Bruce Lee’s daughter regarding the depiction of her father.
Yu, Bona’s founder, chairman, and CEO, expressed enthusiasm for the extended partnership with TSG, affirming Bona’s entry into the ‘Avatar’ and ‘Deadpool’ franchises and continued involvement in ‘The Planet of The Apes’ and ‘Alien’ series, along with other forthcoming film projects.
Chip Seelig, managing member of TSG Entertainment, echoed the sentiment, highlighting the significant potential offered by the Chinese market and the intention to foster its development.
The Chinese box office exhibited an impressive 83% recovery in 2023 compared to the dismal performance in 2022 but remains approximately 15% lower than pre-pandemic levels. Notably, the December 2022 release “Avatar: The Way of Water” grossed around $240 million in Chinese theaters.
At a current market capitalization of $1.4 billion (RMB9.91 billion), Bona’s share stands at RMB7.29.
