Tue, Feb 07, 2012 - Page 5 News List

Fund set to focus on film projects in China, world

NY Times News Service, LOS ANGELES

If Chinese versions of News Corp chief executive Rupert Murdoch and US TV personality Oprah Winfrey teamed up with, say, China’s JP Morgan to start a film fund, this would be it.

Sun Media Group, founded by Bruno Wu (吳征), who is often compared to Murdoch, and his wife, Yang Lan (楊瀾), sometimes likened to Winfrey, is joining Harvest Fund Management to create an US$800 million fund that will back entertainment ventures in China and around the world, company executives said on Saturday.

“The goal is pretty straightforward; it’s to make a maximum return, of course, for the investors,” Wu said of the enterprise, which is aimed at a booming Chinese market for global film.

He and Lindsay Wright, the vice chairman of a Harvest global investment unit, spoke jointly by telephone.

The fund, called Harvest Seven Stars Media Private Equity, is expected to invest in existing entertainment companies. However, it also will provide backing for individual filmmakers and build an entertainment distribution system in China and elsewhere, Wu and Wright said. Its initial pool of capital, they added, will probably be expanded in the near future.

Last year, the Motion Picture Association of America said it expected the number of cinema screens in China to increase to more than 16,000 in 2015 from about 6,200 last year, as Chinese box-office receipts grow to a projected US$5 billion from US$1.5 billion. At the same time, China has been under pressure from the entertainment industry in the US to ease censorship, open its markets and crack down on chronic film piracy.

“The awareness, and urge, and strong desire to protect” intellectual property has never been higher in China, Wu said.

He and others, he said, have been lobbying the Chinese government for tougher anti-piracy measures.

Regarding markets, Wu said he and fellow investors are eager to ease the way in China for -blockbuster-style films from abroad — one of the biggest hits there lately has been Mission: Impossible – Ghost Protocol — by joining in substantial co-productions.

Asked whether the venture might back a company as large as the current incarnation of DreamWorks Studios, which was built around a US$325 million stake from Reliance Entertainment of India, but is now in search of new financing, Wu said: “Yes.”

Harvest Seven Stars is being advised by the Creative Artists Agency, through its Beijing office. Several deals with film producers are being completed, Wright and Wu said. Given the agency’s involvement and the producer negotiations under way, the new venture appears to be pointed toward a Hollywood alliance sooner rather than later.

Wu, one of China’s wealthier entrepreneurs, and Yang, long a TV talk show hostess, already control a media empire with TV, print and online components.

The new film-oriented fund is backed by their Sun Redrock Investment Group. Harvest is participating in the new venture through its Harvest Alternative Investment Group, which Wright leads. She described Harvest as the second-largest asset manager in mainland China.

The new venture will operate from Hong Kong and Beijing, Wright and Wu said.

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