On the Summit of Cultural Industry Innovation of "2017 China Innovation Conference", several cases about “Culture+Finance” drew attractions of journalists from China Economic Times.
CMB Cultural Creativity Loan, a financial service product, is being promoted in Shenzhen, an active city in Guangdong Province; project investment and financing roadshow is carried out continuously in Foshan city. The building of funds is accelerating including ZJFG-Yue Xiu Cultural Development Fund.
“Promoting closer cooperation and deep connection between culture and finance is significant for speeding up the development of cultural industry and stimulating cultural creativity of the whole nation,” said Wang Yiyang, the Party Secretary of the Guangdong Provincial Department of Culture on the Summit. In recent years, with the continuous building of “Culture+Finance” system, the cooperation and connection activities between culture and finance has contributed to more than 110 billion Yuan of crediting from financial institutions to cultural enterprises totally in Guangdong, and also a variety of financial exploration has been engaged in around.
Zhang Zhibing, Executive Vice President of SFC, considered that, there are four paths for connection between culture and finance, i.e. property right realization, capitalization, financialization and securitization. Property right realization is indeed to solve the issue of registration right since any patent which needs to enter the capital market must be registered in the national statutory bodies first as the basis of property right transactions. Capitalization is to solve the problem of value evaluation since assets are only valuable when they can be valued and concluded in the accounting statement. We now have a long way to go because some listed cultural enterprises have not evaluated the copyright as assets. The issue of Guidelines for Evaluation of Intangible Assets of Cultural Enterprises by the Propaganda Department of the Central Committee of the CPC and the Ministry of Finance will help to solve the problem. Financialization is to solve the problem of financing on the conditions that cultural enterprises lack funds and financial institutions would like to eat the “cake” of culture. Securitization is to solve the issue of mass participation. Any industry can only become huge after solving this issue. Any industry, if developed to a mature stage, would eventually embark on the path of asset securitization. There actually are some good cases about asset securitization of cultural enterprises and cultural projects.
The history of asset securitization of the cultural industry is short, with its first case happened in 1997. In which, a British rock singer named David raised 55 million U.S. dollars for the copyright securitization of 25 CDs. If a young man has a lot of money, he can achieve higher success. Financial nature is to use future money to do something now, with time for space, so this is an essence of financial asset securitization.
The second case is also instructive. In 2001, a ball team who lacked money had an idea, issuing asset securitized bonds of 71 million U.S. dollars using its ticket sales of the next 20 years as its underlying assets. After that, it bought big players and soon developed to be a First Division A team.
In China there are two relevant cases. Overseas Chinese Town Happy Valley raised 1.75 billion Yuan with its ticket sales in the next five years for issuing the asset securitized products. Dadi Group raised 1.13 billion Yuan with the box office of its 80 cinemas for issuing the asset securitized products and listed on the Shenzhen Stock Exchange.
“Culture enterprise is rich ore, and the key is how you dig it. If you have faith, you have to embrace it, because it is the next BAT,” said Zhang Zhibing.