Author：Nancy Wang
Publisher：GPLP
On August 30, the stock price of Talent Television & Film fell, and the closing price fell 4.33%. The decline continued on August 31 and closed down 3.57% to 8.1 yuan per share.
Just the day before, Talent Film and Television released its first semiannual Report of the year, and the results of it were quite good. Then why did the stock fall?
Talent Film and Television released the 2018 mid-year report on the evening of August 29th. The report shows that Talent achieved an operating income of 495 million yuan, a year-on-year increase of 59.03%; net profit of 90.115 million yuan, an increase of 50.00%. In terms of main business, the net profit after deduction was RMB 89,315,700, a year-on-year increase of 72.75%. Regarding the main reason for the increase in operating income, Talent said that it mainly relied on the copyright grant revenue of the TV series “We are young in wartime” and “East Palace”.
According to the mid-year report, the net cash flow from operating activities was -646.82 million, down 77.23% year-on-year. The company said that mainly the cash paid for the purchase of goods and the payment of labor in the current period decreased compared with the same period of the previous year.
The drop of share prices is expected to somewhat related to the delay of
“ The Legend of Ba Qing”.
As early as October 2016, Talent Film and Television had already agreed with Zhejiang Tmall Technology Co., Ltd. to obtain the exclusive information of the drama and the right to authorize the play in accordance with the agreement in the mainland of China (excluding Hong Kong, Macao and Taiwan) in a single episode of 8 million yuan. In November 2017, Talent Film and Television and Jiangsu Broadcasting Corporation and Shanghai Media Group agreed that the latter two companies will obtain the first round of broadcasting rights of Jiangsu TV and Dongfang TV for 233 million yuan respectively. Limited to mainland China), cable and wireless TV broadcast rights in Jiangsu and Shanghai after three rounds of broadcasting.
According to public information, “The Legend of Ba Qing” has wrapped up filming around September 2017. However, the serie is not yet air on TV. Some investors inquired about the matter on the investor interaction platform on January 19, while Talent Films and TV responded that the show had obtained a domestic TV drama distribution license, and the specific broadcast date had to wait for the broadcast platform to notice.
So why did they hold back “The Legend of Ba Qing”from broadcasting?
“The Legend of Ba Qing” stars Bingbing Fan and Yunxiang Gao. Both of them have exposed negative news. In March this year, it was reported that Gao was involved in a sexual assault scandal in Australia. Soon after, Fan was involved in a “dual contract” and was pointed out that there was a tax evasion.
Talent said that the buyer never proposed to the company to change or cancel the contract. The company still cannot rule out that the risk of changing or canceling a contract, that is to say, the drama purchase party will not be able to agree with the company to change the star or the drama is restricted by the competent authorities..
Talent announce that if “The Legend of Ba Qing” eventually caused substantial adverse impacts and losses on the company, Talent will claim compensation for all the losses in accordance with actor employment agreement signed with relevant actors.,including but not limited to the costs of reproduction, alternation caused by change of actors, cost of delayed production, as well as losses of investment and estimated profit.
At present, Talent Film and Television has confirmed in 2017 that “The Legend of Ba Qing” had a revenue of 617 million yuan and a carry-over cost of 298 million yuan. From January to June 2018, it was confirmed that the drama revenue was 70.86 million yuan and the carry-over cost was 35.579 million yuan. As of June 30, 2018, the drama had a gross profit of 354 million yuan, and the inventory balance of 41.748 million yuan was not carried forward. That is to say, if the show can not be broadcast smoothly, resulting in the cancellation of the platform with the broadcast platform, then the “The Legend of Ba Qing”, which has confirmed the income of 688 million yuan will become bad debts.
How important is the image of the actor himself or herself?
After Bingbing’s “Dual Contract” incident, her work and herself has disappeared. The movie “Legend of Ravaging Dynasties” starring her was originally scheduled to premiere on July 6 but was officially rescheduled the ten days before the release, and another film “Big Bombing” with only one shot of her was also urgently rescheduled from August 17th to October 26th ten days before the release.
The “Dual Contract” broke out on May 28, and the closing price of Talent Film and TV on that day was 17.09 yuan per share, with a market value of 6.84 billion. Nowadays, the market value of Talent film and television has shrunk by 52.6%, “scrapped” as they say, and there seems to be no way out .
