SEC Probing Studio Deals in China25 Apr, 2012 By: Erik Gruenwedel
The Securities and Exchange Commission reportedly has sent letters of inquiry to select Hollywood studios regarding recent agreements with China easing restrictions of theatrical movies allowed into the communist country.
The SEC sent letters to 20th Century Fox, Walt Disney Studios and DreamWorks Animation asking how the studios dealt with select Chinese officials, including allegations of bribery, according to Reuters, which cited a source familiar with the matter.
In February, U.S. officials, including Vice President Joe Biden, and the Motion Picture Association of America hailed an agreement with the state-owned China Film Group allowing the influx of 14 theatrical movies, including Imax and 3D, on top of the current 20-films-per-year quota.
China, with a burgeoning middle class hungry for Western entertainment, is considered a gold mine for studios looking to generate incremental revenue at the box office, including lower movie-production costs.
Indeed, DreamWorks Animation in February said it would build a studio in Shanghai after Kung Fu Panda 2 became the highest-grossing animation movie in China, with $100 million in box office revenue.