The banker who helped finance two of the biggest China-Hollywood collaborations this year, the Lionsgate co-investment with Hunan TV and STX’s deal with Huayi Brothers, says similar deals are in the pipeline, and U.S. companies are talking to potential partners in China right now.
The Pasadena-based East West Bank took the lead on debt financing for the $375 million co-investment deal between Lionsgate Entertainment and Hunan TV and was also sole financier of the deal between Robert Simonds’ STX Entertainment and Huayi Brothers for the co-financing, co-production and distribution for 12-15 theatrical releases each year.
Running their China business is Bennett Pozil, executive vice president and head of corporate banking at East West.
“The opportunities that we are involved in at the moment are being dominated by picture-by-picture versus overall larger investment like we saw earlier this year with Hunan/Lionsgate and Huayi/STX,” Pozil told The Hollywood Reporter in an interview at the Shanghai International Film Festival.
“That being said, I know that there are companies here that are talking to companies in the U.S. So I’m expecting that there will be more deals that are similar to the ones that we have recently seen.”
The bank is co-financing Hollywood Adventures, produced by Enlight Media, Justin Lin and Sun Seven Stars Entertainment, which is the biggest ever Chinese language film shot in Los Angeles, and is expected to be one of the big Chinese movies of the summer.
It has also financed Chen Kaige’s forthcoming Sony co-production Monk Comes Down The Mountain. The bank is also working on an action adventure U.S-China co-production directed by Renny Harlin and starring Jackie Chan, Johnny Knoxville and Fan Bingbing.
“The blackout is coming up in a couple of weeks and there are some big Chinese movies coming up: Hollywood Adventures on June 26 and Monk Comes Down The Mountain on July 3 and there is good word of mouth coming out on both movies. It should be a healthy slate,” said Pozil.
Over his career, Pozil has been involved in structuring the finance for Crouching Tiger, Hidden Dragon; Hero and Lost in Translation.
East West Bank has relationships with some of the big Chinese players, including Bona, Enlight, LeVision and Huayi Brothers. Pozil was also a roundtable mentor at the Producers Guild of America’s Produced By Conference at the Paramount Pictures lot in Hollywood in May.
Both Lionsgate and STX deals worked because the two firms took time to get to know the market.
“For Lionsgate if you talk to Jon Feltheimer and Brian Goldsmith, they did an amazing job of understanding the landscape. The companies I talk to here in China love Lionsgate, they find them to be very innovative, very transparent and as you can see they have all these great Chinese partners. Regarding Hunan and LGE, both sides spent a lot of time together to get to know one another, they share common values, and they each have a unique distribution apparatus that helps the other.
“With Huayi and STX, the timing was right. And Huayi picked a partner that really understands China. The people who are successful here are passionate about wanting to be successful here,” said Pozil.
“I think this is just the beginning. Chinese investors and Chinese companies. They’ve had a few years to study the West, and can figure out in terms of expanding their business internationally, what kind of partner they want to have and what type of projects to invest. They are pretty savvy in terms of what films they want to choose. I think we will continue to see that trend expand,” he said.
East West Bank is also looking to embrace more than just film and TV content, such as more technological aspects, digital content and new media.
“I love this creation of non-theatrical revenue base. The online rights are becoming valuable and that’s creating sustainability for this business. The stronger non-theatrical revenue becomes in China, the healthier the business,” said Pozil.
He believes the next phase will be Chinese talent going international and getting global access.
“Chinese talent will be in more studio movies. Chinese talent continues to broaden their appeal. That will start huge outreach globally, demand for certain actors and actresses and directors,” said Pozil.
“In the next 12 months, my prediction is that there will be a Chinese picture that for some reason transcends. I’m not saying it’s something that can be duplicated necessarily but something that touches people, regardless of language. These two factors will start the next wave of export,” said Pozil.