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Paramount Pictures’ $1bn three-year film financing deal with Huahua Media has been scrapped following China’s moves to curb capital flight, the Viacom-owned Hollywood studio said on Tuesday.
Paramount said it would cover the gap in financing, which was meant to fund 25 per cent of its film slate between 2017 and 2019, through individual agreements with companies including Hasbro, Skydance Media and Sega.
The studio said the decision to end the agreement with Huahua was mutual and followed “recent changes to Chinese foreign investment policies”. China has imposed regulations to limit capital flight that have scuppered some outbound deals this year.
Concerns about the Huahua deal emerged in August when Viacom executives told investors on a conference call that it had not received an expected June payment from Huahua.
Jim Gianopulos, Paramount’s president and chief executive, said:
The actions we are announcing today establish a financing model that is better aligned to Paramount’s new strategic approach to film production. Our focus on a more balanced slate – a mix of big, broad-audience films and more targeted and co-branded films made with greater fiscal discipline – demands a more flexible and tailored financing model going forward. This structure positions us to capture more upside beyond 2019 as the new slate takes full effect.