Hollywood
US-China resolve dispute relating to payment of two per cent rise in taxation
NEW DELHI: The dispute between the American film studios and China Film Group Corporation has been resolved with the Chinese side agreeing to pay the money due in full.
According to Motion Picture Association of America (MPAA) Christopher J Dodd, a controversial two per cent rise in taxation on luxury goods that came into nationwide effect on 1 August was the cause of the dispute.
Previously there was a 3.3 per cent tax on ticket sales, in addition to the controversial five per cent paid to the opaque government film fund. The internal dispute between CFG which is China distribution partner for American studios and the US studios has been over who will pay the newly introduced two per cent that the film industry has suddenly been burdened with.
According to the trade agreement signed between the (then) vice president’s Xi Jinping and Joe Biden in February 2012 – US studios was guaranteed 25 per cent of revenue on imported films after all taxes had been paid by China Film Group.
According to Film Business Asia, unverified reports state that the state-owned CFG receives about 14.5 per cent of revenue on imported films, compared to the 25 per cent that goes to the US studios on non-flat fee deals. Cinema owners take a fixed 57 per cent of box office revenue. But the 25 per cent deal was made at the highest level of government and was never at risk.
It has not yet been determined how the two per cent will be accounted for outside of the US studios 25 per cent. There could be a reduction in the film fund to three per cent. Any decision may need to be approved at the next meeting of the State Council. What has been made clear is that under the agreement signed by Xi and Biden – the US studios’ post-taxation 25 per cent take will still be honoured.
Hollywood
US theatre group opposes Paramount, Warner Bros. merger, calls it ‘harmful’
Exhibitors warn mega deal could shrink film output and weaken cinema ecosystem
LAS VEGAS: Cinema United has come out strongly against the proposed merger between Paramount Skydance and Warner Bros. Discovery, warning it could concentrate too much power in the hands of a single player and disrupt the global film ecosystem.
Speaking at CinemaCon in Las Vegas, the group’s chief executive Michael O’Leary did not mince words as he addressed thousands of theatre owners. The deal, reportedly valued at $110 billion, was agreed in March after Netflix exited the bidding process.
“We believe this transaction will be harmful to exhibition, consumers and the entire entertainment ecosystem,” O’Leary said, cautioning that greater consolidation would allow fewer distributors to dictate terms around release windows, scheduling and access to film libraries. Theatre owners argue that such scale could reduce competition and ultimately mean fewer films making it to cinemas.
Pushing back, a spokesperson for Paramount Skydance said the merged entity plans to release 30 films annually in theatres, while continuing to operate both studios separately. The company added that the deal would expand opportunities for creators and strengthen competition by backing more projects globally.
However, exhibitors remain unconvinced. Drawing parallels with The Walt Disney Company’s 2019 acquisition of Fox, O’Leary noted a drop in wide theatrical releases post-merger, reinforcing concerns that consolidation often leads to fewer films.
“Unfortunately, history shows us that consolidation results in fewer films being produced for movie theaters,” O’Leary said.
Beyond output, Cinema United also flagged concerns around theatrical windows, warning that a combined Paramount-Warner entity could exert greater control over how long films remain exclusively in cinemas before shifting to other platforms.
With the debate set to intensify, the clash highlights a familiar tension in Hollywood: scale versus diversity. For theatre owners, the stakes are clear, as they push to ensure that bigger does not mean fewer stories on the big screen.
