How did Huayi Brothers, the former entertainment giant, go from glory to the edge? From its establishment in 1995 to its debt of 4.7 billion, it all seems to have happened in the movie script.
In 1995, the two brothers, Wang Zhonglei and Wang Zhongjun, decided not to take the conventional road and chose the road of entrepreneurship. They set up Huayi Brothers Planning Company, and the initial business was just a small advertising contract. But fate seems to have prepared a different script for them a long time ago.
With this success, the name of Huayi Brothers began to circulate in the industry. In just three years, their company has rapidly grown into one of the top 10 advertising planning companies in China. But the two brothers' ambitions did not stop there, and their eyes had already set their sights on the broader film and television industry.
In 2000, Huayi Brothers Taihe Film and Television Company was established. When they first entered the film and television industry, they experienced the failure of their first investment, which made them realize that success is not only about investment, but also about the quality of content and the demand of the market.
They invited Feng Xiaogang, a director who was famous at the time, to join. The addition of Feng Xiaogang has brought Huayi Brothers a series of films such as "Assembly Number", "Mobile Phone" and "No Thieves in the World" and a series of films with a bumper harvest at the box office and word of mouth.
With the expansion of the film and television business, Huayi Brothers began to attract more stars to join. In 2010, Wang Jinghua joined Huayi with his brokerage team and many of its stars such as Fan Bingbing and Li Bingbing, making Huayi's star more dazzling.
In 2009, Huayi Brothers went public, and its stock price soared, and its market value once reached more than 90 billion yuan, becoming the leader of the mainland entertainment industry.
At the pinnacle of business, scandals in private life also began to entangle Huayi Brothers. Wang Zhongjun's interest lies in collecting famous paintings, and he spent hundreds of millions of dollars to buy paintings by Van Gogh and Picasso, and established a private art gallery.
Wang Zhonglei's reputation has become less positive because of scandals with many of his actresses. These scandals not only affected his personal image, but also brought a lot of public relations pressure to Huayi Brothers.
As time passed, Huayi Brothers' business began to cool, and the company's financial situation began to have problems due to the continuous negative news from the top.
By 2023, Huayi Brothers' debt is as high as 4.7 billion, and they once relied on selling assets to pay off their debts. This situation is undoubtedly a wake-up call for all entrepreneurs to pay attention to the importance of risk management and brand image.
The glory of the past has now become a heavy burden. Since 2018, with the adjustment of China's film market and the rise of Internet entertainment, traditional film and television companies such as Huayi Brothers have faced unprecedented challenges.
The changes in the market are a huge test for them. They are trying to find new growth points by diversifying, including entering the field of games and online dramas. Due to the lack of core competencies and forward-looking strategies, these attempts have not been as successful as expected.
Huayi Brothers' chaotic top management is also an important factor in the company's troubles. With Wang Zhongjun and Wang Zhonglei's increasingly frequent social activities and private life scandals, the company's management focus began to blur, which directly affected the company's business execution and innovation capabilities.
The case of Huayi Brothers reminds all companies that the personal conduct and professionalism of the leadership are the key to influencing the direction of the entire company.
In 2022, Huayi Brothers has to face more financial and credibility crises. A series of failed investments and projects, coupled with constant negative headlines, have caused their market trust and share price to plummet.
Despite their efforts to save themselves by selling assets and restructuring debt, the effect has not been significant. This year, they even lost some long-term stars and directors, which dealt a further blow to their brand image and business development.