Lionsgate’s long-rumored deal with China’s Hunan TV was confirmed on Wednesday, giving the studio a solid foothold in the world’s second-largest film market. As part of the agreement, Hunan will co-finance a quarter of the cost of Lionsgate’s film productions in the next three years, an investment of approximately $375 million. Though Lionsgate’s major franchises, including The Hunger Games and Divergent, are not part of the deal, the venture will include: Now You See Me 2; Age of Adaline, with Blake Lively and Harrison Ford; the action-adventure Gods of Egypt; The Last Witch Hunter, starring Vin Diesel; and a Power Rangers movie.
Hunan’s film subsidiary, TIK Films, in partnership with LEOMUS Pictures, now has the option to distribute up to four Lionsgate films per year in China, whose national box-office grew another 36 percent in 2014. At the current trajectory, China is expected to surpass North America and become the world’s top film market in 2017. But tight restrictions that promote homegrown films have limited the number of foreign films that can play in China; in 2014, that quota allowed only 34 non-Chinese productions to play in theaters.
Hollywood studios have partnered with Chinese companies before on a more limited scale, but Lionsgate should benefit from pairing with an entertainment conglomerate that boasts both distribution and advertising platforms. “When a company invests $375 million, they have a vested interest in being involved and helping get you better advertising for your movies,” Lionsgate CEO Jon Feltheimer told the Wall Street Journal. “With a financial interest, Hunan likely will be more willing to take part in licensing, merchandising and supporting overall growth.”
Lionsgate and Hunan will also collaborate on TV programming, with hopes of bringing Hunan’s TV series to an international audience while simultaneously producing new shows based on video games, including one based on Candy Crush Saga.