Seeking an expanded role in the global entertainment market, a consortium of Japanese corporations is poised to announce the formation of an international media company that will invest in everything from Hollywood movie production to sports programming.
Media International Corp. will provide as much as $700 million in funding for an array of entertainment ventures by its fifth year of operation, company President Takao Yoshiki said. The Tokyo-based company will start with $200 million in capital.
"We realize this is a multimedia society," Yoshiki said. "This company's purpose is to make partners with European and American media giants as well as major production houses."
Media International is primarily the creation of a Japanese Broadcasting Corp. subsidiary known as NHK Enterprises, which has pledged $30 million in capital to the deal. Other initial backers, Yoshiki said, are Dai-Ichi Kangyo Bank, the world's largest commercial bank; Sumitomo Bank, another top worldwide financial institution, and Seibu Saison, a conglomerate that operates airlines, department stores, supermarkets and hotels.
Yoshiki said 10 corporations will eventually form the core support group of the company, and Media International will have access to as much as $1 billion through its backers. NHK has told its potential partners that the company should become profitable within five years.
Wall Street analysts said Media International could become a significant force in the entertainment industry. David Londoner of Wertheim Schroder, a New York investment firm, said Hollywood--especially the independent production companies--will welcome the presence of a new investment partner.
At the same time, Londoner said, the Japanese stand to benefit from holding the copyrights to film, television and cable projects they may undertake.
Traditionally involved most prominently in the equipment end of the business, Japanese companies have been moving more aggressively into programming lately. Japanese firms recently have invested in Carolco Pictures and Largo Entertainment, and Sony Corp. last year bought Columbia Pictures Entertainment outright for $3.4 billion.
"When Wertheim Schroder did an entertainment conference in Japan last March, the message came through loud and clear that there was great interest in Japan in aligning with American film and television producers as a way of securing Japanese rights," Londoner said.
One of the first places Media International's representatives are likely to land is Hollywood. Independent producer Thomas Mount, who is familiar with the Japanese media, said the company will ultimately be "besieged" by executives seeking funding.
"It is going to have a very positive impact for the flow of motion pictures," Mount said. "They have some very ambitious plans and the cash to achieve them."
However, one well-placed entertainment executive warned that certain Japanese investors have flirted with the concept of Hollywood venture partnerships before, only to withdraw when Hollywood sought a serious commitment.
"The question is whether they will spend the money," said the executive, who asked not to be named. "There's no way to know. People will come to them with stupid deals, and the Japanese are very shrewd about knowing the value of a dollar."
Autonomy has been another key concern when the Japanese have invested in American entertainment companies or products. Analysts said that Media International will encounter strong resistance if it seeks creative control over projects with American companies.
NHK Enterprises, the Japanese corporation behind the venture, already has experience in the news and sports programming fields. One consultant who has worked with the company said that NHK and its partners want to capitalize on the new opportunities presented by the 1992 opening of the European Community, economic reform in Eastern Europe and new technologies such as satellite broadcasting.
"They're finding that they need to have more international lines out," said consultant Ralph Thomson of International Business Catalysts. "It's shared risks and shared profits."
Media International's business plans should become clearer in the months ahead. But initial plans call for the company to act as a partner in international broadcasting productions, major motion pictures, sporting events and news programming, in addition to marketing the rights to its products in Japan and abroad. Yoshiki said the firm might also raise funds above and beyond its annual budget for projects of special merit.
Media International plans to incorporate formally next Thursday and hopes to open its doors for business by November. Yoshiki said the firm will have a staff of at least 50 based in Tokyo. It may also hire staff members and consultants in the United States and elsewhere, he said.
Those consultants may be needed to help the company evaluate projects and wade through the choppy waters of entertainment co-ventures. "We're thinking of getting help from both the United States and Europe," Yoshiki said. "We believe Japan will play a larger role in the global entertainment market . . . but we would also like to learn a lot from you."