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China's Huahua Media Pulls Plug On Paramount Pictures Movie Financing Deal

7 Nov, 2017 By: Erik Gruenwedel



Paramount Pictures Nov. 7 revealed that a previously announced movie-funding deal with Chinese-based Huahua Media has fallen apart. Huahua, along with Shanghai Film Group, had pledged 25% ($1 billion) fiscal support for Paramount’s film slate over the next three fiscal years.

Paramount Pictures, which includes Paramount Home Media Distribution, attributed the reversal to changes imposed by the Chinese government on foreign investments.

In an effort to make up the shortfall, Viacom-owned Paramount said it secured a series of individual agreements with Hasbro, Skydance Media and Sega, among others, that will provide financing for approximately 25% of the production costs of the studio’s film slate for fiscal 2018 and 2019.

“The actions we are announcing today establish a financing model that is better aligned to Paramount's new strategic approach to film production,” Paramount CEO Jim Gianopulos said in a statement.

Specifically, Gianopulos said the new funding will help Paramount focus on a more-balanced slate — a mix of big, broad-audience films and more-targeted and co-branded films made with greater fiscal discipline.

“This structure positions us to capture more upside beyond 2019 as the new slate takes full effect,” he said.

Regardless, Viacom expects a negative net impact of $59 million in the fourth fiscal quarter in connection with the termination of the Huahua agreement. The company reports quarterly and full-year results Nov. 16.
 


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