Tencent has taken a minority stake in US production company Skydance Media as China’s internet giant moves to increase its presence in Hollywood.
The investment is part of a broader strategic partnership that will enable Tencent to co-finance Skydance films as well as manage marketing, distribution and merchandise in China. Meanwhile, Skydance Media will receive access to Tencent's gaming and marketing expertise to help bolster its presence in Asia.
The deal also provides Skydance, the company behind films such as Mission: Impossible, Terminator and Star Trek, with a powerful partnership with one of the entertainment giants in the world’s second-largest movie market.
The partnership will also enable collaborations on global projects such as television, interactive and virtual reality initiatives.
According to The Los Angeles Times, Tencent purchased a stake in Skydance of between 5% and 10% for more than $100 million.
James Mitchell, chief strategy officer at Tencent, said, “Skydance is nurturing successful entertainment franchises, especially in the action and science fiction genres, which are particularly popular in China. We believe this partnership will support Skydance’s expansion internationally, across media and into television production, and provide Tencent with attractive content that we can share with China consumers.”
The deal fits within Tencent’s mission to become one of the world’s biggest entertainment companies. The company, which recently overtook Facebook to become one of the world’s most valuable companies, owns a profitable gaming arm, which includes the popular title Honor of Kings, and its social networking platform WeChat, which has close to one billion users globally.
Tencent also owns a video content arm Tencent Video and last year announced more than 40 projects, including movies, TV series and online series, as well as pan-entertainment projects based on IP collaboration. Prior to this deal, Tencent co-financed the Hollywood blockbuster Kong: Skull Island and has invested in STX Entertainment and Original Force animation.
Skydance, which was founded in 2010 and has developed brands across film, television, animation and interactive entertainment, is a good fit for the Chinese giant. Skydance is currently in production on the new Mission: Impossible, Terminator and Top Gun films and retains the rights to Star Trek, G.I. Joe and World War Z. It has also produced a host of TV shows, including Altered Carbon for Netflix and Jack Ryan for Amazon. Skydance has also produced virtual reality games Archangel VR and the upcoming Walking Dead VR game.
Tencent’s investment is the latest in a string of Chinese companies that have bought up Hollywood studios. Dalian Wanda Group Co purchased Legendary Entertainment, the production company behind Jurassic World and Batman for US$3.5 billion. The company also owns the AMC Theatres cinema chain.
However, it also follows the collapse last year of a US$1 billion financing deal between Huahua Media and Paramount Hollywood studios which was believed to have failed after a tightening of regulations by the Chinese government.