US merchant bank Raine Group has formed a strategic partnership with Chinese state-owned China Media Capital (CMC) to make joint investments across digital media, sports and entertainment.
The partnership involves co-investing, sharing resources and exchanging investment strategies. CMC chairman Li Ruigang told the Financial Times that while he is initially focusing on Chinese deals, “by working with Raine we will also look for global [investment] opportunities”.
China is keen to develop its domestic media and entertainment industries, bringing in Western expertise in areas it thinks necessary. CMC, which manages an $800m (RMB5bn) fund, has been at the forefront of these efforts. Its acquisitions include a controlling stake in News Corp’s Chinese media assets - including TV channels and the Fortune Star film library.
CMC is also a partner in Oriental DreamWorks, a joint venture with DreamWorks Animation and Chinese state-owned Shanghai Media Group and Shanghai Alliance Investment. The Shanghai-based animation studio is producing the third installment in the Kung Fu Panda franchise.
Founded by Joe Ravitch and Jeff Sine, in partnership with talent agency WME Entertainment in 2009, Raine has backers including Google executive chairman Eric Schmidt, Facebook board member Marc Andreessen, former Yahoo CEO Terry Semel, SoftBank founder Masayoshi Son and Korean food-to-entertainment moguls Jay and Miky Lee.
Ravitch is a former partner at Goldman Sachs where he worked on transactions involving YES Network, Demand Media, China Netcom and Focus Media. Sine was formerly vice chairman and head of the TMT division at UBS.
“We believe the media sector in China is on the cusp of a significant growth trajectory, as demand for international content in China continues to increase, and Chinese media companies continue to expand globally,” said Ravitch.
CMC chairman Li Ruigang said: “We and Raine share the same vision - to build Chinese media and entertainment companies into world-class institutions, to further develop the content creation industry in China, and leverage the technology, formats, innovations, and experience of the global digital media, sports and entertainment sectors into China.”
Raine’s most recent entertainment investment was the acquisition of a stake in Important Studios, founded by South Park creators Matt Stone and Trey Parker.