Kung Fu Panda Diplomacy Wins in Hollywood for Chinese Mogul
Well-connected Li Ruigang aiming for entertainment juggernaut of movies, sports and theme parks
China Media Capital founder Li Ruigang, here at the World Economic Forum in the Chinese city of Dalian last September, is an ‘indispensable partner,’ says DreamWorks Animation’s Jeffrey Katzenberg. PHOTO: REUTERS
Jan. 29, 2016 2:10 a.m. ET
BEIJING—The big-screen tale of a cartoon panda’s path from martial-arts student to master is also set to showcase to larger audiences the ambitions of Chinese media mogul Li Ruigang.
“Kung Fu Panda 3,” a U.S.-China co-production which opens in wide release across both countries this weekend, is the latest example of Mr. Li’s mission to build a Chinese entertainment juggernaut—an entire “ecosystem” spanning movies, sports and theme parks.
The ventures the 46-year-old founder of private-equity media empire China Media Capital has set up with foreign partners have made him known as China’s Rupert Murdoch, with a rare knack to join Chinese objectives with what Western companies want.
Mei Mei, voiced by Kate Hudson, performing a ribbon dance in ‘Kung Fu Panda 3.’ PHOTO: ASSOCIATED PRESS
In the past year alone, CMC, which manages more than $5 billion across various investment platforms, agreed to bring Legoland to China and launched funds with both IMAX Corp. and Hollywood studio Warner Bros. to make Chinese films for global audiences. This year, CMC said it was taking a minority stake in visual-effects company Base FX.
Mr. Li started his career in China’s state-backed media apparatus, but has now almost entirely crossed over to the private sector. To focus on running CMC, Mr. Li last year resigned from all executive positions he held Shanghai Media Group, one of China’s most powerful state broadcasters, which he led for more than a decade.
Li Ruigang at a ‘Kung Fu Panda 3’ event last week in Shanghai. PHOTO: ORIENTAL DREAMWORKS
Even though he operates outside the system, Beijing has rolled out the red carpet for Mr. Li, in apparent recognition of his role in building overseas audiences for Chinese films and boosting consumption at home, a core goal as the economy slows.
For Western companies, there are also big rewards to reap.
As a Chinese co-production, “Kung Fu Panda 3” is guaranteed a bigger cut of China’s box office than foreign films usually get under Beijing’s heavy restrictions.
The previous two “Panda” installments were strictly Hollywood productions, which led to concern that a franchise based on perhaps the most powerful of all Chinese symbols had been co-opted. The movies were hugely popular in China, while China’s own animations trailed far behind.
The cooperation that led to “Kung Fu Panda 3” started with an email in 2011: “I’m Jeffrey Katzenberg. I want to talk to you,” Mr. Li recalled.
The third installment of the “Panda” franchise marks the first Chinese-themed animation from Oriental DreamWorks , a CMC joint venture with Mr. Katzenberg’s DreamWorks Animation SKG Inc. In limited recent previews in China, the movie has already pulled in 42 million yuan ($6.39 million), breaking records for animated movies in the country.
Mr. Katzenberg calls Mr. Li an indispensable partner. “I can’t imagine anything we would have done would have been possible without him,” he told The Wall Street Journal in a recent interview.
Mr. Li envisions his media empire to eventually dominate across several sectors with both traditional and cutting-edge media offerings, something like a combined Netflix Inc., Walt Disney Co. and Apple Inc. “I believe that China will have an entertainment giant with its own ecosystem,” he said in a recent interview.
CMC already is behind a slate of China’s most popular TV shows, including China’s version of the Dutch reality-TV franchise “The Voice.”
In China’s biggest-ever sports-media deal, CMC pledged 8 billion yuan ($1.26 billion) in September for five-year television and online broadcast rights to China’s soccer Super League. It also teamed up with Citic Capital Holdings, buying a 13% share in City Football Group, which owns the Manchester City FC franchise.
Mr. Li’s recipe of teaming up with foreign partners follows similar trajectories in industries including auto and railway manufacturing, but he dismisses any suggestion that he is only out to siphon off know-how from his foreign partners. “The creative industry is different from the industrial,” he said. “It’s a people business.”
Mr. Li isn’t without competition. He faces a formidable rival in property magnate Wang Jianlin, who is building a brigade of theme parks across the country. His Dalian Wanda Group Co. recently acquired Hollywood film company Legendary Entertainment for $3.5 billion in cash. The Beijing-based company already owns Ironman Triathlon, U.S. cinema chain AMC Entertainment Holdings Inc. and a 20% stake in Spanish soccer champions Atlético Madrid.
Mr. Wang—China’s richest man, according to Shanghai-based research firm Hurun Report—says he’s on the hunt for even bigger deals. While Mr. Li can’t compete with Mr. Wang’s deep pockets or war chest, his decades as a media professional gives him an advantage over the real estate tycoon.
Mr. Li has gotten some of his rivals to join his quest. In a rare collaboration, Internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd. last year became CMC’s major investors, and have joined with CMC to launch Whaley Technology Co., an Internet-TV startup that will monetize content from CMC’s investments.
“Uncle Li,” as he’s known in media circles, launched his career as a television reporter in Shanghai, his hometown, in 1994, right out of the city’s Fudan University. He was tapped as Shanghai Media Group’s president when he was only 33.
At SMG, he encouraged executives to read the autobiography of John Malone, the American media giant who reshaped the U.S. cable-TV industry in the 1980s and ‘90s. “I hope they can get spiritual power from challenging the stereotype,” Mr. Li said.
While some other Chinese media executives emerged from political families, Mr. Li lacks a privileged past. His father died when he was young. His mother, a factory worker, could barely cover school fees for Mr. Li and his younger brother.
However, Mr. Li doesn’t lack for ties. Chinese President Xi Jinping included Mr. Li among executives who traveled with him to the U.K. last year and he briefly served in Shanghai’s local government a few years ago.
Mr. Li said he aims to bring changes—and order—to China’s entertainment sector. “Many of these industries have been either choked by the government-led system for a long time or are in total chaos,” he said.
A fluent English-speaker, Mr. Li has become the go-to guy for many Western executives eager to get a larger footprint as China’s box-office receipts surge.
“Ruigang is one of the smartest executives in China for media,” said Hollywood filmmaker Brett Ratner, who has struck deals with CMC and Warner Bros and has worked extensively with Mr. Li.
Martin Sorrell, chief executive of advertising behemoth WPP PLC., selected Mr. Li about five years ago to sit on WPP’s board.
Mr. Li is considering opening up offices in Los Angeles and London to handle more cross-border deals.
He said that to convince authorities to let him form a joint venture with DreamWorks he reminded them that China ultimately wants its media companies to be big. “If we only produce content for the local market, I don’t think that’s the goal—from the industry, sector, government,” Mr. Li said.
Yet, Mr. Li says he’s not part of a bigger government soft-power play. “That is way too heavy for me to shoulder as a soft power carrier,” he said. “I am just a businessman.”
—Lilian Lin
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