Lionsgate Finalizing Partnership With Chinese Firm for Movies, Distribution

28 Jan, 2015 By: Erik Gruenwedel

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U.S. studios may be clamoring to get their hands on Chinese moviegoers. At the same time, Chinese media companies are looking to establish beachheads in Hollywood.

Hunan TV & Broadcast Intermediary Co. Ltd, a Chinese based media distributor, is nearing a partnership with Lionsgate for the production and distribution of movies and related content, according to a source familiar the situation.

As part of the proposed agreement, Lionsgate would distribute select Chinese content in foreign markets, including the United States. Hunan, which operates a studio in Hong Kong, will also establish an office in the U.S.

Lionsgate’s association with China isn’t new. The Santa Monica, Calif.-based mini-major has been linked to interest by Chinese e-commerce giant Alibaba, in addition to Dalian Wanda Group Co., which recently acquired U.S. theatrical chain AMC Entertainment for $2.6 billion.

B. Riley & Co. analyst Eric Wold contends that with the growing foreign box office it makes sense for overseas companies to solidify their global positioning by acquiring stakes or partnerships in Hollywood studios to monetize their content and franchises within those countries in more-effective manners.

Specifically, Wold believes a mid-tier studio such as Lionsgate that is void the distractions of other divisions or businesses typically found at major players such as Warner Bros., Disney and Fox, would likely be preferred.

“We believe Lionsgate, with its solid content library, strong movie franchises, lock on the young adult segment and impressive cash flow, would be an attractive candidate in this environment,” Wold wrote in a Sept. 29 note.

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