(Reuters) - Viacom Inc’s Paramount Pictures movie studio still has not received payments from the Chinese studios it entered into a financing deal with in January, Paramount Chief Executive Jim Gianopulos told investors on Friday.
The snag in the funding deal comes at a delicate time for Viacom and Paramount, which are in the midst of a turnaround strategy under Viacom’s new CEO, Bob Bakish. Paramount is one of six brands that Viacom is focusing on as part of the strategy.
In January, Paramount announced a deal under which two Chinese film companies, Shanghai Film Group and Huahua Media, would invest $1 billion in Paramount, giving the studio much needed cash and support as it attempts to grow.
However, Viacom executives disclosed in the company’s third-quarter earnings call in August that a payment from Huahua had been delayed as a result of increased restrictions by the Chinese government on outside investments, causing concern among investors.
“We haven’t received the money we are entitled to under the deal, but we have been given continued assurances they are processing it,” Gianopulos told attendees of the Merrill Lynch Media, Communications & Entertainment Conference.
Paramount is prepared to replace the funding in a timely manner if the situation is not resolved soon, he said.
The studio expects improvement in its box office numbers this year, with real results from its turnaround by 2018, Gianopulos told attendees.
Reporting By Jessica Toonkel; Editing by Steve Orlofsky