Hollywood Is Scrambling to Replace Chinese Funding

It was supposed to be one of the biggest deals yet in the budding relationship between Hollywood and China. In January, Shanghai Film Group and Beijing’s Huahua Media agreed to pay a combined $1 billion to help finance Paramount Pictures Corp.’s full slate of movies for the next three years. The agreement would ensure that potential blockbusters such as XXX: The Return of Xander Cage and Transformers: The Last Knight would have the funds to reach thousands of screens around the world—while giving the studio an edge in distributing and marketing movies in China.

Less than six months later the new partners missed making a scheduled payment to the studio. In late 2016 the Chinese government started to crack down on overseas investments in entertainment by mainland companies, a boom that began in 2012 when Dalian Wanda Group Co. took over U.S. theater chain AMC Entertainment Holdings Inc. “Everything’s on track,” Robert Bakish, chief executive officer of Viacom Inc., told analysts in August about the delayed payments. But now the studio is looking for other investors to replace the Chinese partners, according to a person familiar with the matter who declined to be named because the discussions are private. Huahua declined to comment; Shanghai Film didn’t respond to a request for comment.