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The bankruptcy of Donald Tang’s Global Road Entertainment has Hollywood worried about the future of U.S.-China film industry relations, particularly over the possibilities for future Chinese financing of Hollywood films.

Tang launched Global Road last October to great fanfare, promising to use the company to build bridges between Hollywood and the emerging Chinese film market and investors. Global Road’s film operations were seized by creditors in August followed by major layoffs, and on September 6th its film division filed for Chapter 11 bankruptcy.

The concern in Hollywood is that Global Road’s fall may prefigure dim prospects for future investment and collaboration between Hollywood and China. Some mini-studios founded with Chinese start-up capital, like Bob Simonds’ STX Entertainment and Jeff Robinov’s Studio 8, are at particular threat if fallout spreads given their recent attempts to secure further financial support from China since April.

STX, founded in 2014, has 14 films on the docket for 2019 alongside two co-productions in development with the Chinese internet giant Tencent and four more with Jack Ma’s Alibaba Pictures. Studio 8, also founded in 2014, has released just two films in four years, both of which facing difficulties. Ang Lee’s Billy Lynn’s Long Halftime Walk, their first release, earned $30.9 million on a budget of $40 million, while their second release Alpha opened to $10.3 million.

The successes of STX speak well to continued collaboration possibilities between China and the U.S., but Global Road’s misfortunes and Studio 8’s comparably limited takeoff nonetheless dampen the Hollywood optimism of even a year ago. The actual impact of Global Road’s collapse remains to be seen.

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