What else does "Wolf Warriors 2" bring to Beijing culture besides guaranteed box office receipts?
if we look at it from the perspective of value investment, Beijing culture has deeply participated in the development of phenomenal films such as Wolf Warriors 2, and there will be a qualitative improvement in our grasp of commercial films and understanding of the domestic market in the future.
original title: what else do you get from participating in "Wolf Warriors 2" Beijing Culture besides benefiting from the box office?
" Wolf Warriors 2 "Ambassador Fan (middle) is played by Song GE, chairman of Beijing Culture, as
" Wolf Warriors 2 "to create a miracle. Since its release at 8pm on July 27th, it has held a record of more than 200 million yuan in a single day for 12 consecutive days, falling to 170 million yuan until Aug. 9, and the total box office has now exceeded 4 billion yuan.such box office results, "Wolf Warriors 2" is no longer limited to the film industry, after the Mermaid, once again infiltrated into the capital market. The focus of capital attention is on the 800 million guarantee previously carried out by Beijing Culture United Film Union Media.
the release of the film is a common way after Beijing's cultural transformation of the film and television industry. since the beginning of "Love in Love", there has been almost no guarantee failure in Beijing culture. But in terms of the general environment, there were too many failures in the second half of 2016 after the prime period of 2015, so Song GE, chairman of Beijing Culture, called out an 800m guarantee only after reading the script, which was a "radical" strategy at that time.
but Song GE doesn't think so. He said it was impossible to do it without "more than 80 per cent confidence". "We are confident that Wolf Warriors 2 will be raised to a commercial film of at least 800m in the order of magnitude". His confidence comes from three sources: one is that the patriotic military theme of "Wolf Warriors 2" is needed and scarce in the market, and the second is that the shooting team behind Wu Jing has worked very hard to ensure the quality of the film. the third is that Beijing Culture will send a team to carry out in-depth cooperation.
this is not the only time Beijing Culture has guaranteed the bottom of the film before the film is completed. In the early preparation of the "second-generation goblins" supervised by Chen Guofu, Beijing Culture also guaranteed a floor of 500 million. This is a strategy for Beijing culture to be deeply involved in the film. By ensuring the bottom, it can participate in the preparation, planning and shooting of the film, and even put forward opinions on editing. All of these require a very high ability to control the content, while also training the relatively new team in the company.
in fact, after reading the script, Song GE's estimate for Wolf Warriors was only 1.2 billion. At that time, he gave Wu Jing two different guarantee plans of 800 million and 1 billion yuan, and Wu Jing finally chose the 800 million plan. With a guarantee, Wu Jing has enough strength to continuously improve the quality of his work, even though the estimated cost of "Wolf Warriors 2" is as high as 150 million, and it still seriously overruns even though Song GE "pressed him to turn off the phone." it took 200 million to complete.
Song GE and Wu Jing knew each other a long time ago, but when "Wolf Warriors" was auctioned, Song GE had the idea of investing, but he missed out on some opportunities. The investment of "Wolf Warriors 2" has long been favored by many companies, and Wu Jing has no way to give more share to Beijing Culture. Song Song, "I don't want to take advantage, that's not what business partners should do." he only invested 5 million yuan. Choose to be a guaranteed release to "escort" Wolf Warriors 2.
as a matter of fact, Beijing Culture does not have the ability of cinema distribution at present. in the guarantee Alliance, it is responsible for the overall overall publicity work and suppliers, and the specific implementation is in the hands of Film Union Media and Qitai Culture respectively: Yinglian Media is responsible for distribution and new media promotion, while Qitai Culture is responsible for the landing and marketing of large-scale projects.
Qitai Culture entered the bottom protection team entirely because of Film Union Media. The chairman of Film Union Media said Wusheng revealed that he also missed the "Wolf Warriors". This time it only took him three weeks to determine the guarantee of "Wolf Warriors 2", and after that, he quickly transferred half of his guaranteed share to Qitai culture, which has cooperated with projects such as "Blood War Hacksaw Ridge", "Spring knife 2: Shura Battlefield" and so on. "the introduction of Qitai culture values the marketing strength, and they can make the film project bigger. We want absolute value, not share.
through the tripartite guarantee agreement, Wolf Warriors 2 received a guarantee of nearly 217 million before shooting. The funds will be paid in five installments in accordance with the guarantee agreement. Within 15 days after the first 40 million agreement takes effect, within 7 days before the second 30 million is shut down, and within 15 days after the third 3000 is seen for the first time, the fourth 40 million gets the "public screening license" and "technical certificate" within 7 days, and the last 77.59 million love film is released within three months. Of these, 140 million of the first four payments will be paid by Beijing Culture, and the last 77.59 million will be paid by Film Union Media, with an advance of 60 million of the publicity fees. After the addition of Qitai Culture, the last sum of money and publicity expenses will be shared by Film Union Media and Qitai Culture.
in the box office ledger, this guarantee contract is also obviously different from other ones. It stipulates that when the total box office of "Wolf Warriors 2" is not more than 800 million, the share of the guaranteed side is 12%, and that of the producer is 88%; when the total box office is between 800 million and 1.5 billion yuan, the share beyond the guaranteed side is 25%, and the share of the producer is 75%. When the total box office of the film exceeds 1.5 billion, the proportion of the distributor who exceeds the guarantee is 15%, and the box office share of the producer is 85%.
at present, the total box office has exceeded 4 billion. If calculated on the basis of this box office revenue, Beijing Culture has already earned about 160 million through Wolf Warriors 2, while Yinglian Media and Qitai Culture have earned about 114 million. While Wu Jing's company Dengfeng International accounted for 50% of the project investment, it will earn more than 660 million yuan (the data is estimated, there may be some error). It can be seen that this is a contract that is very biased towards the production side, and the maximum score of the guaranteed party is only 25%. Speaking Wusheng revealed that when Huayi Brothers guaranteed the end of "Journey to the West", the share of the excess reached 70%.
. To a certain extent, it has jumped out of the concept of "betting" after watching the film, and has become a means to be deeply involved in film production and make relatively huge profits without getting a suitable share of the film investment.
through such a guaranteed strategy, Beijing Culture has also gained the favor of the capital market, and the stock has risen sharply in a short period of time.
the last time the company achieved a big rise in the capital market through a single box office boom, it was the Mermaid in the 2016 Spring Festival. Before that, Light Media was the most typical "good film with stock price" company, from "lost in Thailand" in 2012 to "to our lost youth" in 2013, to "lost in Hong Kong" in 2015, and finally to the "Mermaid" with an investment of 100 million yuan. Light Media shares have risen to varying degrees, with the highest rise of 90%.
but after the second half of 2016, the theory that the share prices of traditional film companies rise and fall depends on box office earnings has been completely broken. At the end of 2016 and the beginning of 2017, films such as "your name", "wreaking havoc" and "the dedication of suspect X" produced or released by Ray all created box office results of outstanding players in the same period, but they were still affected by the overall downturn of film and television stocks at that time. Share prices fell more than 13%.
through the box office boom of "Wolf Warriors 2", shares of Beijing Culture, which have been down for nearly 10 months since September 2016, rose sharply from a low of 13.19 yuan per share on July 24, 2017. it has risen by limit for many days since the release of Wolf Warriors 2 on July 27, rising to a peak of 22.50 yuan per share on August 7, while its market capitalization rose from a low of 9.57 billion on July 24 to a peak of 16.33 billion on August 7.
the trend of Beijing Culture's stock price in the past year
however, this market capitalization of up to 6.7 billion driven by 145 million investment came to an abrupt end because of an announcement on the evening of August 7th. According to the announcement, the company's director Ding Jiangyong, vice president Deng Yong, vice president du Yang, vice president and secretary of the board of directors Chen Chen, and financial director Yu Xiaoping submitted a "notification letter on the share reduction plan" to the company, reducing a total of 0.2% of the company's total share capital. It was worth about 30 million yuan at that time. Among them, it is said that the reason for the reduction is "the need for their own funding arrangements".
announcement
this announcement caused" panic "among some investors. Beijing Culture closed by the daily limit on August 8, although it rebounded slightly on the 9th and 10th, but fell more than 7% again on the 11th. The total market capitalization also fell from a peak of 16.33 billion yuan to 13.065 billion yuan at the close of the 11th.
for studios, the success or failure of a project does not really represent the value and ability of the entire company and team. Beijing Culture participates in the production and distribution of Wolf Warriors 2 by ensuring its bottom. what is adopted is a strategy to improve the team's ability, which can not only get temporary economic benefits, but also enable the team to learn the experience of how to make excellent commercial films and "teach people to fish."
perhaps it was because of this that Song GE, as chairman, approved their application knowing that the collective reduction of senior executives' holdings could have a huge impact on the rising share price. Because at this time to catch up, a large part of which is speculation, even whether the box office of "Wolf Warriors 2" can reach 5 billion or even 6 billion, Song GE has not much interest. "after breaking 2 billion, I don't have any special feeling about the daily box office." From the perspective of value investment, Beijing culture is deeply involved in the development of phenomenal films such as Wolf Warriors 2, and there will be a qualitative improvement in the grasp of commercial films and the understanding of the domestic market in the future. this is much more valuable than some simple digital changes.
Edit: xiongwei