Viacom’s struggling Paramount Pictures is getting a $1 billion investment from Chinese firms Shanghai Film Group (SFG) and Huahua Media.
According to Reuters, the firms will co-finance 25% of all Paramount films over the next three years, and the deal includes an option for a fourth year.
"This will give Paramount the wherewithal to build the slate and produce, as a major studio should, 15-17 movies a year," Paramount CEO Brad Grey told Reuters.
As the report pointed out, under former Viacom CEO Philippe Dauman, production at Paramount had fallen to eight films during some years. The deal comes after last year Chinese company Dalian Wanda sought to buy a 49% stake in Paramount.
The big funding influx for Paramount arrives amid several changes for parent company Viacom. New CEO Bob Bakish officially took on the chief position after late last year National Amusements, which owns controlling shares in both Viacom and CBS, decided to call off remerging the two companies.
When the remerger was still on the table, many analysts said Viacom should consider selling off Paramount. MoffettNathanson pointed out that Paramount’s 2016 profits dropped by nearly $500 million and said then-CEO Tom Dooley would have been smart to consider a sale.
“…The best Tom Dooley can do is sell 100% of Paramount to the highest bidder. We are shocked that the Board or the Redstone family doesn’t see the obvious need to deliver Viacom cash ahead of its looming debt refinancing cycle,” wrote MoffettNathanson. “Furthermore, as Hollywood has become more and more of a global, tentpole business, Paramount doesn't have the franchises to compete with Disney, Universal or Warner Bros. As such, Viacom needs to sell its studio now to either a strategic buyer who can take out massive costs or find some ‘easy’ money which always seems to be available.”