Talk About Chinese Money Investing In Paramount Studios
$VIA, $NFLX, $FOX
There is some chatter that SoCal banker Dominic Ng, 57 anni, is taking with Chinese investors interested in Paramount Studios, a unit of Viacom, (NASDAQ:VIA)
Mr. Ng is the Chairman-CEO of East West Bank and said to be a financial conduit between US film studios and Chinese investors.
Over the past several years Mr. Ng emerged as one of the few US-based bankers connecting American studios with Key Chinese entertainment investors.
He has been the connector for Perfect World’s recent $250-M investment in a slate of Universal movies and Robert Simonds’ STX Entertainment’s Y 2015 pact to produce at least 18 films with Huayi Brothers.
He has helped raise cash for The Martian and The Hunger Games franchise, along with small-screen hits like Netflix’s (NASDAQ:NFLX) Orange Is the New Black and Marco Polo.
“Studios feel insecure today if they do not have a Chinese partner,” says Mr. Ng. “And for the Chinese, Hollywood is the holy land. It is a Win-Win.”
Mr. Ng estimates that East West has arranged about $1.6-B of financing during the past 5 years and expects that amount will grow significantly in Y 2016.
To that point, he told reporters recently that his phone already is ringing from Chinese investors wanting to take Viacom CEO Philippe Dauman up on his 23 February offer to sell a stake in Paramount Pictures.
East West’s movie financing Team is not in the business of advising clients on what to invest in.
They assist in arranging fundraising once deals have been made.
As an example, the bank was instrumental in putting together the $235-M China’s Bona Film Group investment in a slate of 20th Century Fox (NASDAQ:FOX) films. As well as providing lead and co-financing for individual movies, like Silver Linings Playbook, the Divergent movie series and the upcoming Legendary production The Great Wall.
The bank’s move into entertainment came just after the Y 2008 financial crisis, when pretty much every big New York and European bank retrenched or abandoned movie financing.
It was the time when Chinese President Hu Jintao declared that culture would be of strategic importance for the country and encouraged the growing film industry to go global.
An estimated $3-B of Chinese investments flowed into the US entertainment industry in Y 2015, according to the data.
The demographics of China’s growing middle class are driving the country’s appetite for quality motion picture entertainment.
That has led to a the growth in movie theaters on the Mainland, where 15 new screens open daily. There are 5,600 cinemas with 28,000 screens, and that number is projected to nearly 2X this year.
Chinese investors realize that their native box office receipts are expected to pass those of the US in Y 2017, creating the largest film market in the world with a projected $12-B in ticket sales.
Stay tuned…
Paul Ebeling
HeffX-LTN
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