Paramount terminated its $1 billion financing agreement with Huahua because of a change in Chinese policy.

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Due to the "external change in China's investment policy", Paramount recently announced the termination of its cooperation with Huahua Media. Now Paramount said in a statement to terminate the cooperation: "due to the change in China's foreign investment policy, with the agreement of Paramount and Hua Hua, the two sides have terminated the financing cooperation."

Hua Hua has previously promoted a series of Paramount blockbusters in China.

due to the "external change of China's investment policy", Paramount recently announced the termination of its cooperation with Huahua Media.

the earliest news of cooperation between the two sides came out in January this year. Paramount reached an agreement with Shanghai Film Group and Huahua Media, which will inject $1 billion into Paramount. Under the agreement, Shanghai Film and Hua Hua will provide 25% of the funding for each Paramount film production over the next three years and have the right to choose to extend the partnership.

at the beginning of this year, it was reported that Shanghai Film's capital injection into Paramount was stopped, and Huahua was not regulated because it was a private enterprise. However, a lot of things have happened since the announcement of the agreement. Brad, chairman and CEO of Paramount, who brokered the agreement. After Gray left office, he died of illness, and the new CEO, Jim Giancopoulos, visited China to implement the agreement. Gialopoulos said at an investor meeting in September that he was still waiting for a sum of money that should be paid.

now Paramount said in a statement to terminate the cooperation: "due to the change in China's foreign investment policy, with the agreement of Paramount and Hua Hua, the two sides have terminated the financing cooperation."

since the end of last year, the policy of encouraging enterprises to go out has undergone a 180-degree shift. The National Development and Reform Commission said it would pay attention to the irrational tendency of foreign investment in real estate, hotels, sports clubs and other areas, guard against the risks of foreign investment, and "advise relevant enterprises to make prudent decisions."

Wanda Group abandoned its planned acquisition of film and television company Dick Clark Productions at the beginning of this year because of regulation. Paramount CEO Gianlopoulos also expressed his concerns at an investor meeting in September. "the Chinese government has strengthened its regulation of investment in Chinese enterprises, especially in the entertainment sector," he said. "

Hua Hua was previously the driving force of several Paramount films in China. Films that it has helped promote or distribute as Paramount's Chinese partners include Transformers 4 (the first film to earn $300 million at the Chinese box office), Ninja Turtles, Mission impossible 5 and Star Trek 3: beyond the Stars. Hua Hua signed a contract with Paramount last year to become the exclusive partner of Transformers 5 in China.

Viacom, which owns Paramount, expects the cancellation of its cooperation with Huahua to have a negative impact of $59 million on its fourth-quarter results.

Paramount said it would work with other companies to fill the financing gap between 2017 and 2019. These companies include Skydance Media (the producer of Mission impossible 6, which Paramount will release in 2018), Hasbro and Sega. Paramount signed a five-year partnership agreement with Hasbro last week to co-invest in films and collaborate on TV shows. In addition, Paramount won the rights to Sonic the hedgehog from Sega Games and will take over Sony to bring the game character to the big screen.

Edit: mary