Hollywood studios are worried that they are being shortchanged by Chinese movie theaters and have decided to conduct an audit of the box office receipts coming out of the country, sources told the Wall Street Journal.
The audit has been going on for about six months and is reviewing box office receipts for select Hollywood films released in China in 2016. The review is being conducted by accounting firm PricewaterhouseCoopers LLP for the Motion Picture Association of America.
Studios in Hollywood have been under the suspicion for some time that their box office receipts in China are being underreported, the Journal noted. The studios say that Chinese theaters may sell tickets to a Hollywood film and only credit sales to a Chinese film, or not report the sales at all.
The audit will likely be completed by the end of the third quarter of this year, just before a year-end deadline for the U.S. to renegotiate its film trade deal with China, the Journal said.
The most recent deal was struck in 2012 and allowed for 34 films to be released in China each year, with the U.S. studios getting 25% of the box office receipts.
What's Hot On TheStreet
Another bank is bullish on Alibaba: JP Morgan initiated Chinese e-commerce giant Alibaba (BABA) - Get Alibaba Group Holding Ltd. Sponsored ADR Reportwith anoverweight rating and $190 price target in a new note Tuesday, representing more than 30% growth over Monday's closing price of $142.73. In JP Morgan's eyes, Alibaba is entering a transformation from a pure play e-commerce company to a data-driven beast that stands to power its bottom line more than most expect.
"We believe Alibaba's core commerce is expanding from traffic monetization to data monetization and such trend will quickly expand to its media/cloud businesses," writes JP Morgan analyst Alex Yao. "Such expansion not only allows Alibaba to tap into non-transaction-based corporate budget (e.g. market research, brand awareness, and customer service), but also supports our investment thesis based on sustainable revenue/earnings growth."
A key Walmart business springs back to life: Walmart (WMT) - Get Walmart Inc. Report is starting to see long-awaited sales growth at its U.K. Asda division as Britons shift their shopping habits towards food purchases with a slump in consumer confidence and surging inflation, TheStreet's Lisa Botter reports. Sales at Asda rose by 2.2% for the 12-weeks ended June 18, well ahead of the 0.9% pace notched in the 12 weeks to May 21, according to new data from research firm Kantar.
Different strategies emerge in driver-less cars: Alphabet Inc.'s (GOOGL) - Get Alphabet Inc. Class A Report deal with rental car giant Avis Budget Group Inc. (CAR) - Get Avis Budget Group, Inc. Reportto have Avis manage some self-driving test cars developed by Alphabet's Waymo unit and Fiat Chrysler (FCAU) - Get Fiat Chrysler Automobiles N.V. Report feels a little overblown, writes TheStreet's Eric Jhonsa. The deal only covers test cars deployed in one metro area (Phoenix, Ariz.), and isn't exclusive, Jhonsa points out.
Meanwhile, Apple Inc.'s (AAPL) - Get Apple Inc. (AAPL) Report deal with Avis rival Hertz Global Holdings Inc. (HTZ) - Get Hertz Global Holdings, Inc. Report feels even smaller. Apple, which has reportedly been testing a half-dozen self-driving cars around the San Francisco Bay Area, is just leasing a small number of Lexus RX450h SUVs from Hertz, with the idea of retrofitting them with self-driving test systems.
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