Research On Financial Strategy Of Film Companies Based On Diversified Strategic

Under the guidance of the "cultural power" strategy,the "pan-entertainment" ecosystem has become increasingly prosperous.Competition in the media industry is becoming increasingly fierce,and traditional film companies are facing transformation.Since 2014,Huayi Brothers began to accelerate the diversified layout and proposed that film companies should use intellectual property to expand the industrial chain then build a new business model.Huayi Brothers entered the game,e-sports,cinema,cultural tourism and other industries,creating a entertainment group,which integrat online entertainment and theme park.In the capital-intensive industry,film company adopts diversification strategy cannot be separated from the financial strategy.However,the previous studies on diversification strategies have mostly used empirical research,and it is impossible to discuss the specific implementation process of corporate diversification transformation from the perspective of financial decision-making.Research on investment and financing in the media industry is limited to single angles such as M&A and equity pledges,which degree of integration is insufficient.This paper takes Huayi Brothers as an example to conduct an integrated study on its investment,financing,and distribution strategies during the transition period,in order to analyzes the problems in its financial strategy.After reviewing relevant literature,this paper analyzes the development trend of the film industry and the specific implementation process of the financial strategy in the process of Huayi Brothers' diversified transformation.Then it analyzes the financial strategy of Huayi Brothers from multiple dimensions such as investment structure,investment direction,investment effect,capital cost,financing effect,financing risk,etc.Finally,it evaluates the effect of the strategic transformation of Huayi Brothers by constructing a financial strategy matrix,then propose an optimization plan.This article draws the following conclusions.First,Huayi Brothers has adopted an investment strategy of vertically extending the industrial chain and horizontal business expansion,while raising funds in various ways,reducing the cash dividend ratio,and finally completing a diversified transformation.Second,during the investment process,Huayi Brothers ignored the investment in the main business,which weakened the market competitiveness and profitability.Huayi Brothers paid a higher M&A premium and use high financial leverage,which resulted in higher operating risks and financial risks.The controlling shareholder's equity pledge accelerates the decline in stock prices,detracts from corporate value,and increases the risk of control transfer.The short-term financing structure adopted by Huayi Brothers does not match the capital needs of the company's long-term investment,showing liquidity risks.Third,after 2018,the result of Huayi Brothers' financial strategy is to reduce the value of the company.There is an urgent need to increase the sustainable growth rate and optimize capital structure.Fourth,this article puts forward the following financial strategy optimization suggestions: investing in "reconciliation",innovating theme park investment methods,exploring the copyright securitization of film works,borrowing from Hollywood's "platform" financing methods,and reducing cash dividend distribution.Finally,this article draws the following experiences,which can enlighten traditional film companies to adopt a diversified strategy:(1)Focus on the content itself.(2)Be alert to risks during the transition period.(3)Keep exploring and innovating.