Relativity Media opens a door into China
Independent studio Relativity Media is making a jump into the fast-growing Chinese market with a deal that will give it a stake in a local production company and an avenue to release its own movies in the country.
Relativity's chief executive, Ryan Kavanaugh, was in China on Monday morning to announce the deal, which includes a host of partners.
In the first part of the agreement, Relativity is taking a stake in SkyLand, a China-based production venture backed by SAIF Partners, an Asian private equity firm with $3.5 billion under management, and IDG China Media, the Chinese arm of Boston-based technology and publishing giant International Data Group.
The three partners will together control a fund worth about $100 million that will produce content based on Chinese culture in the country with hopes of releasing it around the world.
Formed two years ago, SkyLand 's most recent release was "Snow Flower and the Secret Fan." The movie, which was directed by Wayne Wang and produced by Rupert Murdoch's wife, Wendi Murdoch, was a flop in the U.S., grossing just $1.2 million since its release last month.
Also announced in China on Monday was a partnership by state-owned Huaxia Film Distribution Co., China's second-largest film distributor, with SkyLand. That arrangement will allow Relativity to release its upcoming movies in China without being restricted by a government quota that allows only about 20 foreign movies per year in the country on a revenue-sharing basis.
That's significant for Relativity, as the young studio is transitioning from co-financing movies with Universal Pictures and Sony Pictures into the riskier business of producing its own pictures. Several high-profile Relativity movies that will get a Chinese release under this partnership include November's ancient Greece-set action movie "Immortals" and pictures coming out next year based on the "Snow White" fairy tale and the Edgar Allen Poe's poem "The Raven."
China is one of the world's fastest-growing movie markets, with box-office receipts up 64% in 2010 to $1.5 billion, making it No. 6 in the world.
Other entertainment companies have been aggressively expanding their presence in the country as well. Legendary Pictures in June announced a new joint venture to produce movies in the country intended for release around the world. Former News Corp. President Peter Chernin last year launched a company to invest in fast-growing businesses in Asia, including in China.
-- Ben Fritz
Top photo: Henry Cavill in "Immortals." Credit: Jan Thijs / Relativity Media. Bottom photo: Relativity Media Chief Executive Ryan Kavanaugh. Credit: John Shearer / Getty Images.