Dow Jones Business News November 27, 1996

NEW YORK (AP)--Walt Disney Co. (DIS) has decided to stick with a deal to distribute a new film about Tibet's exiled religious leader the Dalai Lama, despite the risk it could jeopardize the company's expansion in China.

Disney made its position clear for the first time today since reports surfaced late last week that Chinese officials had privately expressed their displeasure to the company about the project.

The film, ''Kundun,'' is one of two movies currently under production about the Dalai Lama. China's anger over the film comes as Disney officials look for ways to expand the Magic Kingdom into the world's most populous nation.

''We have an agreement to distribute the film and we will honor it,'' said John Dreyer, a Disney spokesman. He would comment no further on the decision.

The Dalai Lama, the 1989 Nobel Peace Prize winner, has called for Tibetan independence and is viewed by the Beijing government as a threat to China's rule over the former Himalayan kingdom.

China's position on the film raised concerns that it would use Disney's desire to expand in China as a wedge to force the company to distance itself from the project. The Chinese haven't said whether or how Disney, the world's second-largest media and entertainment company, will be penalized.

Disney will distribute ''Kundun,'' the film about the Dalai Lama, in the U.S. under a four-year production deal that brought Martin Scorsese, the movie's director, to the company's lot.

Given Disney's desire to attract major talents like Scorsese, some entertainment industry executives said it was important for Disney to back the film. They also saw the decision as a test of Disney's commitment to artistic freedom.

''What this shows is how desperate China is to try to marginalize and, if possible, silence the Dalai Lama, which is something that dictatorial regimes like to do,'' said Danny Schechter, co-executive producer of ''Rights & Wrongs: Human Rights Television.'' ''Unfortunately, Mao's legacy and Mickey Mouse's legacy are colliding here.''

Schechter, who has directed an upcoming film about the Dalai Lama's visit this past summer to South Africa, worried that if Disney were to back down it might be harder to distribute his film. He also expressed concern about the general chilling affect such a decision could have.

It's unclear exactly how the Chinese government conveyed its initial anger to Disney. Officials at China's Film Bureau, the government's movie authority, said that while they have not seen the movie, they did not appreciate its focus on the Dalai Lama.

''Of course we oppose this,'' said Kong Min, an official at the bureau's foreign affairs department.