Making ‘Emperor’ in China an Epic Job of Financing

At one point during the making of Bernardo Bertolucci’s critically acclaimed movie “The Last Emperor,” producer Jeremy Thomas stood with one of his investment bankers watching the filming of a scene involving thousands of elaborately costumed extras gathered inside the walls of Beijing’s Forbidden City.

When the banker commented on the beauty of the spectacle, Thomas responded: “You’d better like it; it’s costing you $10,000 a second.”

In Thomas’ view, the success of “The Last Emperor”--which recently won four Golden Globe awards and is being touted for the Oscars--represents a triumph of business as much as art. Before the film could be made, he had to persuade five European merchant banks to fund one of the most expensive independent productions ever--nearly $25 million--in a place where no Western movie makers had ever filmed. At the outset, “we couldn’t get a major Hollywood studio involved because they were very skeptical that it was feasible to make the picture in China for this cost,” Thomas said in a recent interview. “It was a monumental undertaking, and they just didn’t think it could be done. Nobody wants to be involved in something that might turn out to be a debacle.”

Faced with making the film outside the major studio system, Thomas first put up $400,000 of his own money to finance the screenplay, the initial trips to China and the employment of artists to make brochures to show potential investors what the film would look like--Imperial China, the Forbidden City.

Needed Government OK

Thomas’ London bank, Hill Samuel & Co., which had helped finance several of the producer’s previous films, put up another $400,000 initially and agreed to be the lead bank in raising the rest of the money.

A key factor in the financing was obtaining permission from the Chinese government to allow a Western movie crew to spend four months filming in the country--something that had never been done.

“The Chinese are very hard negotiators,” Thomas said. “They’ve had a tough history--thousands of years of being exploited--and they are consequently very wary of getting the wrong end of a deal.”

In the end, however, “we had a two-page contract which opens with the statement, ‘In the spirit of friendship and collaboration,’ ” he said. “It’s rather like the Preamble (to the Constitution). There’s no first-party-this and second-party-that stuff.

“They gave us collaboration on setting up communications, permits, dealing with the army to get 19,000 extras, helping us with research. This is the first (Western) film about modern China, and China is one of the stars of the movie. It was really a $25-million cultural and business joint venture.”

All the Chinese government asked for in return, Thomas said, was the Chinese distribution rights to the movie and payment of a few hundred thousand dollars to help cover their own expenses. “They were very rational and reasonable dealings, and it was extraordinary not to have a 120-page contract,” Thomas said. “There aren’t any lawyers in China,” he added, as if by way of explanation.

There are, however, 31,000 theaters and 500,000 people employed in the distribution of films in that country of 1.2 billion--one-quarter of the world’s population. In 1986, the Chinese logged 25 billion movie admissions, compared to about 1 billion in the United States, and the average price of a movie ticket in China is about five cents. “So, for a Western film, you never really see any revenue out of China anyway; you see more revenue out of Russia,” Thomas said.

When the cooperation of the Chinese government was assured, Thomas and Hill Samuel began lining up other banks to share the cost of production--Pierson, Heldring & Pierson in Amsterdam, Standard Chartered Bank of London, Gota Banken in Stockholm and Creditanstalt-Bankverein in Vienna. “They divided up the $23.8-million budget into varying portions of up to $5 million,” Thomas said.

Before filming began, much of the risk was covered by $20 million in guaranteed distribution agreements for a number of countries. According to Thomas, Hemdale Film Corp. paid a little less than half of the movie’s cost for the right to sell the U.S. distribution rights, which eventually went to Columbia Pictures.

Rodney Payne, the head of Hill Samuel’s film and television finance division, said the banks took a longer view on the deal than just the movie at hand. “China is such an extraordinarily large country, and they do make friendships,” he said. “We figured that any bank which participated in something as important as this film was to them would probably gain extra recognition from authorities. We want to share in the growth of China.”

Brought in the Pasta

During the course of the production, Thomas had to oversee everything from the “manufacturing of 19,000 original 19th-Century costumes for these vast scenes we had to re-create” to the feeding of the film crew.

“An army marches on its stomach, and the mostly Italian crew wanted its pasta,” he said. “At midday, they needed their carbohydrate badly, and so we had to bring it in.” Specifically, he brought in 22,000 kilos of Italian mineral water, 200 kilos of Italian coffee, 500 liters of olive oil, 2,000 kilos of pasta and an Italian chef to prepare it all.

According to Thomas, “The Last Emperor” so far has grossed $65 million worldwide, making it profitable even before opening widely in the United States.

Asked what happened to the 19,000 costumes, he replied, “They’re stored in a warehouse, appreciating.”