CAA launches joint venture in China to grow share of entertainment market
Creative Artists Agency (CAA) has become the latest Hollywood-based company to sign a deal with Chinese investors as the battle for the entertainment market heats up.
Hollywood-based CAA has launched a joint venture in China
CAA has signed a deal with Chinese investment fund CMC Capital Partners, a fund which specialises in media, entertainment and internet investments, to form CAA China as a joint venture.
The deal will see CMC take a minority share in CAA China and its chairman, Li Ruigang, will join CAA’s board of directors.
The joint venture aims to bolster the Hollywood-based entertainment and sports agency’s business in China, where it has been operating since 2005.
CAA currently employs 24 employees in Beijing and represents a host of local talent including “The Great Wall” director Zhang Yimou and “Rogue One” star Donnie Yen. CAA also helps guide finance to both Chinese and English-language content as well as inking distribution deals.
The deal also provides CMC, which owns IMAX China, Manchester City Football Club, and Flagship, a joint venture studio with Warner Bros, with greater access to the US market.
The partnership will also enable both companies to take advantage of China’s booming entertainment market, which remains a highly attractive and lucrative market for Hollywood films.
CMC chairman Li Ruigang, said, “We believe China and the US are the two biggest entertainment markets and play pivotal roles on the global landscape. The partnership not only creates commercial and industry value, but also serves as an innovative force in the evolution of the Chinese media industry.”
The deal follows a flurry of activity from Chinese firms investing in US studios and talent agencies, as China continues to develop its entertainment industry.
Rival talent agency WME/IMG has signed a similar joint venture deal with Chinese private equity firm Sequoia Capital China, which was also backed by Tencent.
Earlier this year, Paramount Pictures signed a three-year $1 billion deal with Huahua Media and Shanghai Film Group to co-finance films, while ecommerce giant Alibaba negotiated a content sharing deal between its film studio Alibaba Pictures Group and Steven Spielberg’s Amblin Partners.
However, it has not all been smooth sailing. The collapse of a $1bn deal for China’s Dalian Wanda Group's to buy Dick Clark Productions, along with a slow-down in the explosive growth of China's box-office last year, have sparked fears among entertainment companies about the growth potential in China.
John Zeng, the president of China’s largest film distributor Wanda Cinemas, told an audience at CinemaCon last month that the Chinese market remained strong, with audiences showing an appetite for good content. He predicted the Chinese box office will continue to grow at a rate of between 15% and 20% annually.