Warner Bros. in Deal to Make Chinese-Language Films -- Update

By Carlos Tejada 

BEIJING--Warner Bros., which makes movies ranging from "American Sniper" to nearly all of the Batman films, will soon be shooting in Chinese.

The Time Warner Inc.-owned studio said Sunday that it struck a deal with private-equity firm China Media Capital to make Chinese-language films for the fast-growing market. Warner Bros. will own 49% of the venture, called Flagship Entertainment Group Ltd., which will be based in Hong Kong.

With the deal, Warner Bros. will "gain additional insight into the Chinese film industry," said Kevin Tsujihara, Warner Bros. chairman and CEO, in a statement. The two didn't release financial details.

The Wall Street Journal last month reported that the two sides were in talks.

China's movie market is No. 2 in the world behind the U.S. and is still growing. Earlier this month, official media reported Chinese movie theaters had so far taken in 30 billion yuan ($4.71 billion) in ticket sales, surpassing the 29.6 billion yuan they had taken in for all of last year.

Increasingly, Chinese-language productions are the big moneymakers. "Monster Hunt," a whimsical live-action movie featuring a monster baby and made locally, became China's top movie, with 2.43 billion yuan in ticket sales, the first domestically made movie to hold the top spot in more than two decades.

Deals with local studios also look appealing for foreign filmmakers because China still restricts the number of foreign movies that can be shown in Chinese theaters.

Flagship Entertainment could release its first movie as soon as next year, the two companies said in their statement. It said the partnership will tap Warner Bros.'s distribution expertise and look to make what the industry calls tentpole films, or big-budget films intended to reap big-tickets sales.

The deal teams Warner Bros. with Li Ruigang, founder of China Media Capital and also chairman of major state-owned media company Shanghai Media Group. From his positions at both companies, Mr. Li also has struck business deals in recent years with DreamWorks Animation SKG and Walt Disney Co.

Write to Carlos Tejada at [e-mail]

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(END) Dow Jones Newswires

September 20, 2015 10:19 ET (14:19 GMT)

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