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For Hollywood, The Road To China Is Littered With Broken Deals

 

Four months later, the deal collapsed. The millions of dollars promised by Bison Capital never materialized, and Berg was forced to shut the agency down.

Hollywood talent agent Jeff Berg flew to Shanghai last summer to celebrate one of his biggest deals — a partnership with Chinese investors in Resolution, his new agency in Century City.

Two hundred business executives, government officials, actors and journalists gathered at the swank Hotel Shangri-La to mark the occasion. Celebrities posed for photographs. Guests dined on roast duck, fish and other dishes as a giant digital screen displayed the companies' logos.

Four months later, the deal collapsed. The millions of dollars promised by Bison Capital never materialized, and Berg was forced to shut the agency down.

As Hollywood increasingly looks to China as the new frontier, Berg's experience serves as a cautionary tale.

While the entertainment industry eyes China as a source of capital and customers, interests there often approach the relationship with a very different agenda, according to studio executives and others who have sought partnerships in China.

Some investors are more interested in appearing to be in business with Hollywood than in putting serious money into deals, these people say — to boost their stock prices or profiles. (American studios also like to be seen to be doing deals in China.)

In other cases, entertainment industry leaders say, Chinese companies are looking to learn strategies and techniques to make their own film industry a stronger competitor.

"Making money is not necessarily the most important thing right now — it's to learn the industry. Because most people in China will tell you there isn't an industry the way there is in Hollywood," said Stanley Rosen, a political science professor at USC and an expert on China. "They want to learn everything they can about the business until they don't need you anymore."

Whatever the reasons, Hollywood executives have learned to greet news of a partnership with China with a healthy degree of skepticism.

"In many cases, there is a mutual interest in making a public announcement about a deal, whether or not it winds up happening," said Marc Ganis, co-founder and managing director of Jiaflix Enterprises, which helps studios distribute movies in China. "The batting average of deals has not been great."