Chinese cinemas accused of cheating US movie studios out of millions

Chinese cinemas have been skimming profits from American-made movies to the tune of millions of dollars, an audit has found.

Accountancy firm PricewaterhouseCoopers conducted the audit on behalf of the Motion Picture Association of America, with the Wall Street Journal publishing its findings yesterday.

It says that ticket sales had been underreported by as much as nine percent last year.

That means a figure of at least $40 million was not paid to the six major US studios supplying movies to the largest-growing market in the world.

Methods used to skim profits from the movies, according to WSJ’s sources, include underreporting audience sizes, unreported and unauthorised screenings and wrongly classifying tickets as concessions.

The Chinese market is expected to overtake that of the US in the next five years.

Films like ‘The Fate of the Furious’ and ‘Transformers: The Last Knight’ made more money at the Chinese box office than they did in the US, in the latter case considerably more.

Last year, US movies made $1.87 billion in China.

However, officials from the regulators of the Chinese cinema industry are working to crack down on such unscrupulous practices.

326 cinemas were named and shamed, and then punished earlier this year under the country’s new national film law.

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