China's Wanda production company buys out Dick Clark Productions
Chinese media company Dalian Wanda bought Dick Clark Productions on Friday for $1 billion, continuing its string of US purchases.
Chinese company Dalian Wanda Group has been on a spending spree in the United States acquiring major Hollywood studios, and on Friday made its first venture into a TV production firm: Dick Clark Productions.
Dalian announced that it would buy Dick Clark Productions, the studio that produces the Golden Globe Awards and the Miss America Pageant, for $1 billion. This adds to the Chinese company's already glittering roster of purchases that includes AMC Theatres and Legendary Entertainment, the Hollywood production firm famous for churning out blockbuster films such as “Godzilla” and “300.”
The latest acquisition comes as Chinese box office revenue has in the past year soared compared to its global peers. The country's moviegoers' appetite for Hollywood films continues to grow, and Chinese companies are seeking out opportunities to expand local moviemaking business opportunities.
In turn, Hollywood appears to be welcoming a growing business relationship with Wanda, which has grown from a real estate company into a major entertainment player with a 400-acre complex featuring 30 soundstages scheduled to open in 2017, according to the Los Angeles Times.
“I understand the business thinking, which is, they’re moving upstream,” said Jeffrey Towson, a professor of investment at Peking University, to the Los Angeles Times.
Not everyone is thrilled with Wanda's aggressive expansion into the US market. The move has some US lawmakers concerned that the company, which has financial ties to relatives of senior Communist Party leaders, may open the way to spread a pro-Chinese agenda through its control of the American film industry.
“These acquisitions, as well as many more cofinancing arrangements, allow Chinese state-controlled companies a significant degree of control over the financing and content of American media that raises serious concerns about how this may be used for propaganda purposes,” Rep. John Culberson (R) of Texas wrote in a letter earlier last month to the Justice Department, as reported by The New York Times.
But Dalian Wanda founder and chairman Wang Jianlin has emphasized that he is driven by only by profits, not propaganda.
It is “not like we are invading,” Mr. Wang told The New York Times, contending that Wanda’s goal involves “helping” American film companies “to get more market share in the emerging movies market that is China.”
Hollywood companies are certainly not shying away from the money. According to data from Rhodium Group, between 2000 and 2015, Chinese direct investment in US entertainment firms reached $4 billion, and the pace has accelerated with Wanda’s purchase of Legendary last year, USA Today reports. Sony is partnering with Dalian to produce films with “Chinese elements,” and collaborations between huge Chinese and American stars are becoming more common.
Mr. Wang is also eager to increase incentives for Hollywood companies to shoot movies in China, incorporating Chinese cultural elements and actors in the films to “bridge the entertainment capitals of the world.”
It might be a smart move on both sides given that Chinese box office revenues are expected to be the highest in the world by 2017. In 2015, the US/Canada market raked in $11.1 billion, a 5 percent increase over 2014; China's growth far outpaced that, reaching $6.8 billion, a 49 percent increase from the past year, according to data from the Motion Picture Association of America. This occurs as growth in American box office revenue is expected to stall and international revenues gradually gain prominence for US studios, as a Deloitte prediction points out.
According to a statement by Wanda, the Dick Clark Productions’ managers will be kept and a long-term agreement has been signed between the two parties.