China Media Capital Raises Funds From Time Warner, WPP

China Media Capital, a state-backed investment fund, said it’s raising money from investors including WPP, Time Warner and Softbank to invest in Chinese media and entertainment companies.

China Media Capital is preparing a fund of a “few hundred million” US dollars, Chairman Li Ruigang said in an interview in Shanghai March 20, declining to be more specific. WPP, the London-based world’s largest advertising company, confirmed the investment. The company will also be announcing two acquisitions in China, Chief Executive Officer Martin Sorrell said in a phone interview from Beijing.

Entertainment companies are seeking to tap demand in the world’s second-largest economy as consumer spending grows and incomes increase. Walt Disney and DreamWorks Animation have formed partnerships in China where box-office receipts rose 36 percent to $2.7 billion in 2012, making it the biggest film market outside the US and Canada. China Media Capital already counts DreamWorks, the studio behind the “Madagascar” films, and Time Warner as among its partners in China.

“In this country, you can see the population of the middle class, it is growing so fast,” Li said. “They want to spend money not only to buy luxury goods, they also want quality entertainment, quality content.”