Chinese Firm Resolves Paramount Dispute About 'Transformers' Movie
Movie to Open as Scheduled in China on June 27
By LAURIE BURKITT CONNECT
Updated June 23, 2014 11:33 a.m. ET
A 20 foot-tall Optimus Prime figure is displayed before the world premiere "Transformers: Age of Extinction" in Hong Kong. Agence France-Presse/Getty Images
BEIJING—The makers of the new "Transformers" movie said they resolved problems in China that include a dragon-shaped hotel, government censors and an unusual go-between—a testament that film deals in the world's No. 2 film market are often more than meet the eye.
Chinese company Beijing Pangu Investment Co. said during a press briefing Monday in Beijing that it resolved its dispute with Paramount Pictures over the film "Transformers: Age of Extinction" just days after it demanded that its logos and properties be removed from the movie ahead of its scheduled world-wide opening on Friday.
Pangu, which owns the dragon-shaped hotel, office and mall complex in Beijing, said that its plans for a product-placement deal went awry when a third party that acted as a go-between for Pangu and Paramount drew up differing contracts for both companies, promising different things. "We were cheated," said Lu Tao, Pangu's chief executive.
Pangu and Paramount are both investigating what went wrong, said Mr. Lu. The two companies are cooperating with one another and have had good communication, he said.
Paramount's Vice Chairman Rob Moore said the film would open on Friday as scheduled. "It's unfortunate that we had these misunderstandings," said Mr. Moore, adding that they have "taken steps to put this behind us."
"Transformers" director Michael Bay and Mr. Moore both made repeated references to Pangu when speaking at the news conference on Monday, stating that it has been a supportive partner. "Working with Pangu was fantastic and I want to put all the misunderstandings aside," said Mr. Bay, who also praised the hotel.
The dispute emerged late last week after Pangu said it would halt a commercial sponsorship of the film and demanded that Paramount, which is a unit of U.S.-based Viacom Inc., VIAB -1.07% delete its brand and buildings from the film.
The deal to feature Pangu's distinctive property in the film was originally made last year and valued at roughly $1 million, a person familiar with the arrangement has said.
The problem became apparent after Pangu representatives watched a Hong Kong version of the film, which lacked the 20 seconds of Pangu product placement that it believed Paramount agreed to in the contract, Mr. Lu said. He said the company didn't catch the problem earlier because China's censors, who scrutinize the contents of films before signing off their releases, hadn't made the film available for viewing sooner.
Mr. Lu alleged that Zhou Ning, founder of Chinese sports company Beijing Chengxin Shengshi Sports Culture Co., provided different contracts with varying details to Pangu and Paramount. Neither was aware of the differences, Mr. Lu said.
Paramount's contract didn't include the 20 seconds, said Mr. Lu said.
Mr. Zhou didn't respond to requests for comment.
"This is not about money," said Mr. Lu, adding, "It's about the face of Chinese people and the dignity of Chinese companies."
Paramount had made strategic moves such as casting Chinese actors to win over Chinese audiences for the movie. Featuring actor Mark Wahlberg, the fourth installment in the blockbuster action-robot franchise is expected to be one of the top-grossing pictures of the year.
China is the world's second-largest movie market in terms of box office and is forecast to overtake the U.S. by the end of the decade.
—Lilian Lin contributed to this article
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