The swift and rich marriage between Hollywood and China is over, one top dealmaker said in a lively discussion about the state of the movie business on Monday.
A group of film executives and legal experts convened at the The Grill 2017 in Beverly Hills, at a panel titled “Making Deals with China: How to Get It Done,” where the strongest answer seemed to be, well, you can’t get the deals done.
“The party is over,” said Sky Moore, a partner at power law firm Greenberg Glusker. “Any capital invested in China, the state-owned groups can’t get the money out. There are still people wandering around town saying they have money, and the first question from my clients is, ‘Where is it?'”
Indeed, a string of high-profile deals like Dalian Wanda’s 2016 acquisition of Legendary Entertainment for $3.5 billion shook out at a dramatically reduced position for the foreign real estate monolith.
The company also attempted to purchase Golden Globe Awards producer Dick Clark Productions for $1 billion, but never completed it thanks to strict currency controls from the Chinese government.
“There used to be the great hope that seems to have really dried up,” agreed David Griberg, a partner at corporate law firm Sidley Austin.
Cindy Lin, a 20-year Chinese film veteran and CEO of Infotaiment, said her industry is “used to changing regulation — we’re not surprised that the environment keeps changing.” The current political climate doesn’t help matters much, Moore added.
“There’s an anti-Trump effect,” Moore said. “What China is doing is holding their power, seeing what the hell Trump does and does not want to encourage co-production.”‘
Late this summer, inroads between the booming Eastern movie market and show business took another hit when the Chinese National Development and Reform Commission, in conjunction with its State Department, published documents outlining its plans to “restrict” dealings in “real estate, hotels, studios, entertainment, sports clubs and other overseas investment.”
Chris Fenton, a major Hollywood ambassador in China and president of DMG Entertainment, remains optimistic about the relationship — beginning with a planned China visit in November from President Donald Trump.
“Eventually, cooler heads will prevail and both countries will say, ‘How can we construct this in a way that’s beneficial for both sides?’ and also mitigate the negative,” Fenton said.