Imax CEO ‘Highly Confident’ That China’s Plan to Reduce US Film Releases Won’t Affect His Company

In Imax’s latest quarterly earnings call to investors, CEO Rich Gelfond fielded questions about the potential impact of China’s plan to reduce U.S. film releases in response to Donald Trump’s tariffs, which the executive says he thinks won’t affect the premium format company much, if at all.

“We’re highly confident that the ‘moderate reduction’ in Hollywood imports announced by the China Film Administration will largely target films with limited box office potential in the market and with smaller budgets, not the kind of films that drives Imax’s business,” he said.

Multiple Hollywood executives expressed similar sentiment to TheWrap when the CFA’s announcement was first made two weeks ago, as the CFA announced that it would “moderately reduce” the amount of American releases it would approve as opposed to an outright ban.

While a previous reduction of U.S. releases in 2021 resulted in a major audience pivot away from Hollywood imports and towards Chinese productions that continues to this day, executives said that they expected that blockbusters with substantial anticipation like “Avatar: Fire and Ash” and “Mission: Impossible — The Final Reckoning” — both of which will have Imax support — will still get Chinese release to support local theaters.

Imax is also somewhat insulated from the up-and-downs of Hollywood thanks to its efforts to increase the number of local language films it releases on its screens. That investment paid off in a big way with the Chinese blockbuster “Ne Zha 2,” which made $164 million on 809 Chinese Imax screens this past quarter as it became the first animated movie to gross more than $2 billion worldwide.

Imax has been doing business in China since the 1990s, a first-mover among Western countries at that time.

On Wednesday, Trump softened his tone towards China after weeks of threats and major tariffs against the country, saying he will eventually decrease the 145% tariff on Chinese imports and seeks a “fair deal” with the country’s president, Xi Jinping. Stocks rebounded on the president’s remarks, with the Dow Jones going up 400 points in morning trading.

Imax reported $87 million in Q1 revenue thanks in large part to the box office boom of “Ne Zha 2.” It is expecting a strong Q2 thanks to the success of “A Minecraft Movie” and “Sinners,” as well as upcoming releases like “Thunderbolts,” “Mission: Impossible 8” and “How to Train Your Dragon.”

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