A leading player in China's film industry has taken over two of
the last three Warner's cinemas on the Chinese mainland, a move
which indicates the world film giant is finishing its planned
retreat announced last year, a publicist told China.org.cn
yesterday.
Guangzhou Warner Jinyi
Cinema, the last?one expected to be taken over [file
photo].
Warner Bros. International Cinemas (WBIC), the cinema division
of Warner Bros., and Shanghai Film Group (SFG), released a
statement yesterday stating that SFG will take over two WBIC
Cinemas in China. Located in Shanghai and Nanjing, both cinemas are
joint ventures between the two companies.
"We are extremely proud of what our international cinema
business has accomplished in just four years in China and proud to
have been a catalyst in turning around a market that has since seen
an explosion of new multiplex cinemas across the country," Millard
Ochs, the president of WBIC, said in the statement.?
"We believe that as a leading player in China's film industry,
Shanghai Film Group's experience in cinema operation will help to
achieve a smooth hand-over, and ensure that the cinemas keep their
service standards and continue to provide an improved consumer
movie experience." he added.
The equity transfer agreement was signed by the two companies on
February 12, 2007. According to the agreement, SFG will buy WB's 49
percent share in Shanghai Paradise-Warner Cinema City and 51
percent in Nanjing SFG-Warner Cinema City.
The agreement is still pending the approval of the Chinese
government, and the process is expected to take approximately 60
working days.
Ren Zhonglun, the president of Shanghai Film Group also
commented that "WBIC has achieved great success in the past years.
By taking over both joint-venture cinemas, Shanghai Film Group has
shown our commitment and confidence to continue developing the
Chinese cinema market. We will do our best to contribute to the
prosperity of China's film market."
Insiders estimate that SFG will have to pay 20 million yuan
(US$2.58 million) for each Warner cinema in the deal. But Long Xi,
the publicist for WBIC, wouldn't verify that figure, calling it
nothing more than media speculation.
After the hand-over, all Warner Bros. logos and other
intellectual property will be removed from the cinemas, which will
also no longer bear the Warner Bros. trademark. All Chinese
employees of Warner cinemas will remain on staff after SFG
completes the takeover.
The last cinema expected to be taken over is the joint venture
located in Guangzhou between WBIC and Jinyi International Cinemas
Co. Ltd., Long said. She also stated that WBIC wants to transfer
the last cinema as soon as possible and the negotiation is
underway, but declined to reveal the specific details and time in
case of any unexpected variation.
Previously, WBIC and its partner SZITIC Commercial Property Co.,
Ltd sold 3 cinemas to China Film Group in March. Those were
respectively located in Chongqing, Changsha, and Nanchang.
"WBIC will no longer exist in China after all the transfers are
completed," Long said, "But of course we'll keep our eyes on
China's film industry. If the regulations and environment change
again and is best for our return, we will return."
Warner Bros. was the first foreign media company to invest its
expertise and capital into the Chinese cinema industry via its unit
WBIC in 2002. Its cinemas raked in over 120 million yuan (US$15.51
million) in 2005, which seemed to hint at a promising future.
However, WBIC suddenly announced last November that it would
completely pull out its investments in the Chinese cinema business
due to a major regulatory change, which set new rules for foreign
investment in the Chinese cultural industry. The measure stipulated
that Chinese mainland investors must own at least 51 percent or
play a leading role in their joint ventures with foreign
investors.
The publicist said despite WBIC's retreat, Warner Brothers'
other businesses in China will not be affected, including native
film production, a home video joint venture, consumer products, and
studio stores, all of which have different legal structures,
business models, and regulatory requirements.
(China.org.cn by staff reporter Zhang Rui April 11, 2007)
