Tang De bundled the publisher gambled 1.55 billion yuan at the box office of "The Jedi Escape", which was returned before the release

This summer, guaranteed distribution has become more popular than ever in the industry, but Donde's approach of "seeking both guaranteed and split accounts" has undoubtedly provided the film industry with a new way of playing. Donde's approach increased the probability of win-win in the guaranteed issuance board and tied himself with several issuers.

The capital operation of the original title "Escape from the Jedi" has a big bottom line: Tang De's gambling at the box office is 1.55 billion yuan, which has returned to its original value before the release.

In 2016, the entertainment industry has entered a force that cannot be ignored-Tang De Film and Television.

This company seems to have always been at the center of public opinion: first, it seized the copyright of "The Voice of China" and sued Canxing in court; then it planned to invest heavily in Fan Bingbing's studio, alarming the China Securities Regulatory Commission.

Jackie Chan's movie "Escape from the Jedi", which is currently in full swing, is the first co-production film co-controlled by Don Tak. The first film was so "high and high" that there were too many thrilling and tortuous business stories behind it.

As you know, Jackie Chan, an international superstar, has long been divided up by major companies for his film contract, but Donde just "snatched it from the tiger's mouth" and managed to get this project before companies such as Yaolai.

You may have no idea that Donde spent almost no of his own money on this China-US co-production that cost 300 million yuan! A loan of US$16 million from East West Bank and approximately 15 million in funding from three co-investors each became the main source of funding for this film.

After completing the filming of the film through borrowing and equity financing, Tang De sold the distribution rights of the film at a guaranteed box office price of 1 billion yuan. Before the release, he recovered the company's investment of 180 million yuan in the project and made a net profit of 70 million yuan.

Unexpectedly, a week after the guarantee agreement was signed, Tang De made another "surprise attack"-an additional 20 million yuan in publicity fees and an additional 51.75 million yuan to participate in the guarantee in exchange for 15% of the debt-sharing rights. The reporter's analysis found that the core behind this strategic change was actually that Tang De gave up his net profit of 70 million yuan in the hope of gaining greater profits.

Tonight, we analyze a series of commercial operations behind "Escape from the Jedi", hoping to get a glimpse of the company's determination, strategy and courage in the film field.

Donder won the "Jedi Escape" project ahead of Yolai

. As of today,"Jedi Escape" has been in theaters for four days and has maintained an average daily box office growth of 100 million yuan. The original idea for this film, which has a clear dragon-style action comedy style, came from Jackie Chan, 62.

Donde Films was one of the first companies to participate in the development of this film, and intervened as early as November 2011. At that time, even Yaolai had not yet reached a strategic cooperation with Jackie Chan, which was why Yaolai had a relatively small investment share in this film. In terms of Yaolai,"The Jedi Escape" is called a "legacy work."

Being able to get this project is related to Donde's multiple choices of partners. Ren Yiwan, president of Tangde Films, has known Jackie Chan for many years. The two had contact with Jackie Chan as early as 1949's "Red Bands"; in 2010, Tangde participated in the production of the costume movie "Soldier" produced by Jackie Chan Films; Two years later, Tangde collaborated with Jackie Chan on "The Twelve Zodiac Animals".

However, compared with the previous two films,"Escape from the Jedi" is the first work in the cooperation with Jackie Chan to be controlled by Tang De. In November 2011, Donde first intervened in the project, and a year later, he received the first draft script.

During the development process of this project, Jackie Chan, as the chief producer, played a greater controlling role. Jackie Chan hopes to present the China culture and characteristics in this film through the perspective of a Hollywood director, so Don invited the American screenwriter and director Gray. Harling was recognized by Jackie Chan.

Ren Yixiang, president of Tang De Films, revealed to reporters: "In selecting overseas investors, several foreign companies wanted to participate, but in the end Jackie Chan and Tang De discussed and chose Days Eternment (hereinafter referred to as DE). Specific details of the entire film, in addition to the script, Jackie Chan personally asked about the overall shooting team, scenery, dubbing, and special effects to do his best. If you can't meet Brother's requirements in any way, you won't move forward."

After getting the first draft of the script, it was polished for another three years. It was not until 2014 that the script, starring, post-production and other aspects of the entire project were truly finalized, and there was a precise budget. According to Donde's prospectus, it was at this time that real investment in this film began. The total cost of the film is 300 million yuan, of which Tang De invested 180 million yuan, accounting for 60%.

The upfront investment of 180 million yuan came entirely from loans and equity financing

. For China's film industry in 2014, 300 million yuan was already a very high-cost large-scale film. In order to spread risks, Tang De adopted a method of distributing investment shares on the one hand; at the same time, he also made loans from banks.

According to the reporter's understanding, Changrong Advertising had obtained a certain investment share from Tangde Distribution at that time and intended to transfer it to a fund in the industry. However, this fund believed that "Jedi Escape" had too much investment and was relatively risky, so it ultimately did not take over.

After that, Guangxi TV, China Cultural Industry Fund, and Beijing Tianhua Junze Capital Management Co., Ltd. each received a 5% investment share of Tangde Distribution, and each institution's investment was about 15 million yuan.

The agreements signed by these three institutions are different. For example, Guangxi TV only provides a one-year loan, repays the principal after maturity, and has 2.5% of the film's profits as investment income, while Smallpox Junze can obtain more than 187 million domestic and overseas parts, with a 3.5% share, but these three institutions can all participate in the global box office of the film.

As far as Donde himself is concerned, the company was not yet listed at that time, and the overall capital was limited. Moreover, there were other film projects being developed simultaneously during the same period, which also required funds. Therefore, Donde found East West Bank to make a loan.

In July 2014, Tunde Films signed a loan agreement with East West Bank and received a credit of up to US$16 million, mainly used for working capital and other needs needed for the production and distribution of "The Jedi Escape". The loan interest rate of this fund is 110% of the bank interest rate.

Generally speaking, for risk control reasons, banks rarely provide loans to individual film projects, but East West Bank is special. This is an American bank headquartered in Los Angeles. It has provided loan support to domestic companies including Bona Films, Kirin Films, Hunan Radio and Television Media, as well as film projects such as "Taiping Wheel","Rampage in Hollywood", and "Taoist Down the Mountain".

A senior Bona official shared his experience in cooperation with East West Bank at last year's Beijing Film Festival, mainly through two methods: "internal insurance and external loan" and "external insurance and domestic loan". That is to say, a film company can use domestic subject matter as pledge to obtain loans from East West Bank from abroad; it can also use overseas subject matter as pledge to obtain loans from China. "It usually refers to a guarantee with cash pledge, which will be divided into 100% or 80% cash guarantee, and the specific proportion depends on the situation."

This time, East West Bank provided loan support to both investors in "The Jedi Escape", Donde Films and both.

Guo Jingjing, head of film and television entertainment at the Beijing Representative Office of East West Bank, told reporters that in this cooperation, East West Bank participated in the financing of investors from both China and the United States, but used two completely different loan structures: due to the participation of the U.S. company Prosight, the loan to DE used Hollywood's completion guarantee plus international pre-sale model, while the loan cooperation with Donde used another model that was in line with the domestic film industry.

Donde steadily recouped his costs and gained higher returns by

borrowing US$16 million from East West Bank. Together with 45 million yuan in institutional loans, this is equivalent to the cost of Donde's investment in "Jedi Escape" of 180 million yuan, all of which came from external borrowings rather than the company's own funds.

Today, this 180 million yuan has become the bottom line of box office revenue that Donde Films is striving for in the entire film distribution plan.

On July 8, just three days before the film was released, Tang De announced that he had signed a guaranteed contract with Heyhe Pictures, Lianrui Pictures, and China United League. This agreement stipulates that the film publicity and distribution fee shall not be less than 50 million yuan, all of which shall be borne by Tang De. In addition, the guaranteed amount is 1 billion yuan, of which the guaranteed income due to Donde's films is 306.7 million yuan. Excluding the previous cost of 180 million yuan and 50 million yuan in publicity expenses, Tang De not only recovered the cost through this guarantee, but also made a net profit of 70 million yuan.

But a week after the first minimum guarantee plan was proposed, Donder immediately put out the second minimum guarantee plan. Not only did an additional 20 million yuan in publicity expenses, but it also invested 51.75 million yuan to obtain 15% of all revenue from the original three guaranteed issuers.

Li Lantian, secretary of the board of directors of Tangde Film and Television Group, told reporters that Tangde did this because he was optimistic about the future box office revenue of the film. After discussing with the original three guarantee parties including Heyhe Pictures, Tang De proposed a second guarantee plan.

When the box office of the film reached 1 billion yuan, according to the first plan, Tang De made 70 million yuan; according to the second plan, Tang De actually obtained only 180 million yuan in this guaranteed guarantee, which was even with various costs in the previous period.

The reporter calculated that only when the box office revenue of "Escape from the Jedi" reached 1.55 billion yuan, would Donde's revenue from the second plan be higher than the first one. But Donder seemed willing.

From the perspective of the original three guaranteed parties, selling 15% of the box office revenue rights at an amount of 51.75 million yuan means that on the one hand, the risk of guaranteed guarantees is reduced. On the other hand, based on the pricing of 51.75 million yuan, we can roughly calculate that the box office expectations of the original three guaranteed parties for the film may be about 1.15 billion yuan.

In previous guaranteed guarantees for film projects such as "Mermaid" and "Pacific Wheel", film investors were almost all striving to pursue higher guaranteed amounts, hoping to earn as much income as possible in the guaranteed release contract, which also made guaranteed distribution seem to have become a zero-sum game, with either the investor making more or the issuer making more.

Donde's approach increased the probability of win-win in the guaranteed issuance board and tied himself with several issuers. Of course, this may also be because several major distributors are not optimistic about this movie enough, but the current information from all parties seems more like Donder's intention to strive for higher profits.

Editor: Nancy