Shanghai Film Group and Bailian Group form new joint venture for cinema exhibition
Two state-owned companies cinemas in shanghai Group (SFG) and Bailian Group have set up a joint venture, Shanghai United Bailian, focusing on cinema-chain investment. SFG and Bailian will hold 51% and 49% shares of the new company respectively.
Shanghai Film Group is the owner of Shanghai United Cinemas, a leading cinema chain in China, and it also active in film production and film distribution. SFG currently operates approximately 1,220 cinema screens across 223 sites in China. Founded in 2003, Shanghai-based Bailian Group is a conglomerate that is active in real estate, commercial investment, shopping malls, and supermarkets.
All new cinemas will be branded under Shanghai United Bailian and will also join the wider Shanghai United Cinemas Circuit. SFG currently has three sites under Bailian’s shopping mall portfolio. The new company’s first project is to renovate and rebrand SFG cinema in Ba Bai Ban and including installation of an IMAX screen in this location.Bailian operates in some of the same core business sectors as Wanda Group, who successfully entered the film industry and quickly made itself a key player in China and worldwide. The partnership with SFG is a good opportunity for Bailian to enter the film business by leveraging SFG’s existing experience and wider connections in the film industry. Bailian will focus on providing locations for new cinema sites. Bailian plans to gradually revoke cinemas currently renting under its shopping malls and convert them into Shanghai United Bailian cinemas.
And vice versa, with the support of Bailian, SFG could further expand its screen footprint in the Chinese market to rival that of its major competitors including Wanda Cinemas, China Film Stella Circuit and Dadi Cinemas. Furthermore, the majority of current cinemas under Shanghai United Cinemas are joined as membership only, and not under SFG’s direct ownership. It is a common situation in China that independent cinemas have to join a circuit to operate. In return, circuits will collect a management fee. For the new cinemas under the Shanghai United Bailian joint venture, however, SFG would have more control and could benefit with larger profits.