Welcome to TCB In RMB, a weekly summary of important developments in the Chinese entertainment business.
LeSports defaults on major broadcasting contract
LeSports, the sports arm of China’s internet conglomerate LeEco, canceled the broadcast of a Wednesday European Championship match between Spanish soccer giants Real Madrid and Atlético Madrid, increasing concerns over the floundering titan’s recent financial situation.
Beijing-based financial news outlet Caixin reported that the sudden cancellation was because LeSports didn’t pay satellite transmission fees on time. LeSports might lose the broadcasting rights of UEFA Champions League.
It’s not the first time that LeSports has had sponsorship issues. Last month, LeSports failed to pay US$1.4 million in sponsorship fees to the Chinese Women’s Super League. In March, the company lost the exclusive digital rights to the Chinese Super League. Two months ago, the company lost its broadcasting rights for the Asian Confederation competition after missing payments on a $100 million contract.
Jia Yueting, LeEco CEO, acknowledged the group’s financial distress last November in a letter to his employees and attributed the cash crunch to overexpansion in cars, smartphones, and filmmaking.
Jia Zhangke’s new film falls short of cash
The drama On The Dock, produced by acclaimed sixth-generation director and screenwriter Jia Zhangke and directed by writer-turned-director Han Dong, is facing a cash shortage.
On Tuesday morning, Han said on Weibo, China’s answer to Twitter, that “the film production is nearing completion,” but due to a “funding bottleneck” he would be willing to concede a five percent stake of the film for RMB 1 million (US$145,000).
The drama is adapted from Han’s own novel On The Dock, which was originally published in 1998. It began shooting last August in Hubei province. Its investors include Beijing Mingyangxingdou Entertainment, Alibaba Pictures, and state-owned Emei Film Group.
Han put another announcement on Weibo Tuesday afternoon, under the name of his investor Beijing Mingyangxingdou, saying that the funds from all the investors have arrived on time, but director Han “personally brewed some new ideas on editing the film, so Han decided to sell his shares to cover the extra cost.”
iQIYI bets big on hip-hop talent show
iQIYI, China’s biggest video-streaming website owned by search engine giant Baidu, announced this week it will splash RMB 2 billion on a hip-pop talent show, making it China’s biggest-budgeted online talent show of all time.
The show has invited Kris Wu, Wilber Pan, Chang Chen-yue, and MC HotDog, all household names in China, to be producers. The show is slated to stream on iQIYI website in June.
Per iResearch’s mUserTracker, during March, iQiyi became China’s second largest mobile app in terms of visiting length, following WeChat, an instant messaging service from China’s tech giant Tencent.
“Eighty percent of iQIYI users are under 35 years old, so iQiyi must create content that contains ‘positive energy’ for young people. We’ll create something that neither online platforms nor television has,” said iQiyi CEO Gongyu during a press conference this week.
CMC Capital Partners sees potential in American-styled stand-up comedy
Fun Factory, a Shanghai-based comedy producer, secured a series A financing of RMB 1.2 billion ($174 million) this Wednesday, led by CAA’s Chinese partner CMC Capital Partners.
Founded in 2014, Fun Factory gained its fame in the beginning of 2017 by producing an American-styled Chinese-language stand-up comedy show. The stand-up comedy, streamed exclusively on Tencent Video, video subsidiary of Tencent, hit 1.45 billion views online, becoming the most popular online variety show during 2017 Q1, according to Ent Group, a Beijing-based entertainment industry consulting firm.
”Benchmarking American comedy industry is our goal. We’ll learn fast from American variety shows, comedy films to enrich our content.” Fun Factory CEO He Xiaoxi told Ent Group.
Bona Film makes effort for China IPO
Bona Film Group Ltd., China’a leading film distributor and producer, started to take steps towards an initial public offering (IPO) in China hoping to have a better valuation back home.
Bona Film announced on Wednesday that it had started a six-month instruction program with underwriter Citic Securities to prepare an IPO in China.
The film distributor and producer delisted from Nasdaq exchange last year after five years on the New York-based market, due to Bona executives’ dissatisfaction with international investors — Bona raised only $100 million from Nasdaq. Bona CEO Yu Dong often describes international investors as “aloof.”
Bona raised RMB 2.5 billion yuan ($363 million) from Alibaba Pictures and Tencent half a year ago, bringing the company’s valuation to RMB 15 billion ($2.2 billion).