Against the background of state policy support, China’s film and television industry has started to expand rapidly, with the leading cinema circuits preparing to list, and film and television production companies, famous actors, etc., throwing themselves into the development of cinema. However, the reality is the speed at which cinemas are increasing, due to overheated investment, far exceeds the speed at which the box office is expanding. The lead author is of the opinion that to satisfy the funding and platform needs for making quality films and television programmes, increased concentration will need to become the trend in the industry, and large companies with sophisticated management will become the industry integrators. The next five to 10 years will witness the golden age of film and television mergers and acquisitions (M&A) in China.
The Hollywood model
The Hollywood wave of M&A began with the acquisition in 1985 of 20th Century Fox, one of the eight large Hollywood film studios, by press mogul Rupert Murdoch. Subsequently, M&A became an important phenomena in the Hollywood film and television industry. After the establishment of Lionsgate in 1997, it executed a series of five acquisitions, gradually expanding the size of its film and television copyright library and business sectors, becoming a world famous film and television company in a mere 16 years.
Additionally, the acquisition of Columbia by Sony in 1989, the acquisition of Universal and establishment of NBC Universal by GE in 2004, the acquisition for US$4.8 billion of the venerable Hollywood studio MGM in 2005 by a consortium lead by Sony, and the acquisition for US$1.6 billion of independent studio Dreamworks by Paramount are all typical cases of acquisitions in the US film and television industry.
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