- East West Bank executive vp wants to focus on finance for Chinese films
- Transpacific entertainment banking vet sees Hollywood studios shifting toward collaboration
- Next: Skiptrace, Renny Harlin’s action film with Jackie Chan, Johnny Knoxville, Fan Bingbing
In over 20 years working in the industry, veteran banker Bennett Pozil has had a hand in structuring the finance for some of the better-known Chinese films of the past couple of decades including Crouching Tiger, Hidden Dragon, Hero and Fearless.
As executive vice president and head of corporate banking at Pasadena-based East West Bank, Pozil has helped tie many recent knots between Tinseltown and China, including some of the more headline-grabbing deals of 2015.
East West helped facilitate the March 2015 pairing of Hunan TV with Lionsgate in a $375 million financing and co-production pact. In April, it hooked up China’s Huayi Brothers and STX Studio for a three-year pact to produce 12-15 projects annually. Then last November, the bank helped Bona Film Group invest $235 million in a slate of tent-pole movies from 20th Century Fox.
“These cross-border deals are what everybody sees,” Pozil told China Film Insider on the sidelines of the Beijing International Film Festival in April. “Everybody says, ‘Hey, you’re on the top of that mountain. Wow.’ But we weren’t airlifted and dropped there. We climbed this thing for 5 years, working really hard.”
With $33.1 billion in assets under management, East West Bank has grown from a savings and loan thrift catering primarily to Chinese-Americans seeking mortgages in California the 1970s, to one doing transnational deals.
The bank now operates in seven states in the U.S. and has a growing branch and rep office network in eight cities in China.
East West has relationships with the major Chinese studios including Bona and Huayi, Enlight Media Group, Le Vision Pictures, New Classics Media, and Talent Television & Film.
Pozil said the bank’s China strategy, introduced by CEO Dominic Ng, has been to focus on specialized industries that are more mature in the U.S. from a banking standpoint, and bring that expertise to China.
The bank is rapidly making a name for itself as an intermediary between Chinese and American businesses in fields as diverse as agriculture, energy, technology, venture capital, private equity, trade and finance.
‘But entertainment’s probably been the best one, the most successful one” Pozil said.
More recently, Pozil oversaw funding for Chinese films such as the $30 million 3D fantasy action adventure Zhong Kui: Snow Girl and the Dark Crystal featuring A-list star Li Bingbing and Devil and Angel, a comedy starring husband-and-wife leads Deng Chao and Betty Sun Li.
The bank also financed Fast and Furious director Justin Lin’s Hollywood Adventures, which he produced with Chinese media tycoon Bruno Wu and Enlight Pictures, as well as Chen Kaige’s Sony co-production Monk Comes Down The Mountain, which topped the Chinese box office in its opening week last July and ended up grossing over $65 million.
On the horizon is Skiptrace, the Renny Harlin-directed action movie starring Jackie Chan, Johnny Knoxville, and Fan Bingbing. East West is also assisting Le Vision parent LeEco in its backing of The Great Wall, director Zhang Yimou’s action fantasy from Legendary Entertainment and China Film Group starring Matt Damon.
Pozil said there are more deals in the pipeline, one with a Chinese client who has a deal with Universal, as well as “another client who’s in the earlier stages on a deal with another studio, that we can’t really talk about yet.”
The bank may be known for the cross-border deals it facilitates, but Pozil said this team is passionate about focusing on Chinese productions that will enable the bank to build relationships with local companies.
“We just made a decision to do kind of what the local banks were doing here, finance local production, immerse ourselves in it, try to become extremely knowledgeable in that local business,” Pozil said.
To head toward this goal, Pozil put together a wish-list of eight companies he felt his team could reach, companies that are good at what they do and, in turn, have a proven track record of distribution in theaters or on television or satellite.
That approach has proven fortuitous as China’s economy has slowed because the film industry remains one of the rare bright spots. As such, Pozil said, the bank’s clients have been riding a wave.
The rapid transformation in the industry in China has also brought with it a deluge of capital. In 2015 alone, 166 film-focused private-equity funds were established, according to Beijing-based Zero2IPO Research.
Pozil said East West Bank is able to distinguish itself from the competition by providing more than just cash or credit.
“We’ve probably done close to $2 billion worth of loans outside of China to the entertainment industry through our branch in the U.S. within under five years,” Pozil said. “That’s a lot. And our client base here in China has access to that knowledge.”
Armed with their local Chinese knowledge, Pozil said the bank is able to help Chinese businesses making their first forays into Tinseltown.
“Our advantage is we know how they like deals structured because we know how they do deals in China, and we can help create hybrids that take the best of the China world, the best of the offshore world together,” he said.
The soft-spoken banker’s vantage point has enabled him to witness first hand the Chinese market’s rapid maturation. While challenges such as piracy or the threat of U.S. studios drowning out local films are still real, Chinese industry players are less concerned today, he said: “I think that people understand now and are pretty much on the same page that it’s hard enough to make a picture that works in one territory, let alone two.”
Pozil said he has noticed Hollywood players change their approach to the Chinese market over time.
“Two years ago it was like, ‘I’m a Western producer, take my project, I’ll stuff it down your throat and stick a Chinese star on it, we’re doing it my way” he said. “Versus now, I’m watching Western companies and Chinese companies actually develop together, collaborate together, build something together.”
The change in tack from the Hollywood companies shows that they are cottoning on to a philosophy Pozil said East West Bank adopted long ago: “We localized ourselves, we didn’t try to take our ways and force them here. If we took the Western lending style and told the companies here, ‘You have to fit this model,’ we would have done zero business. And that’s not an exaggeration — there’d be no business for us to do.”
With so many Chinese companies establishing beachheads in Hollywood, the advice goes both ways, Pozil said: “Any country you’re in, if you’re trying to do business there, you have to understand how it works and you have to put an ego aside to be able to allow for other views, other styles.”
—Additional reporting by David Elber