 "China's richest man, Dalian Wanda's Wang Jianlin, makes his move on Hollywood")
Wang Jianlin is buying Hollywood, one piece at a time. China's richest man has gone on a shopping spree aimed at positioning his Dalian Wanda Group in every stage of the entertainment life cycle: cinemas, movie production, TV, marketing and more. His latest target, Dick Clark Productions, would stretch Mr. Wang's empire into Hollywood's red-carpet glamour zone, giving him the company that puts on the Golden Globes, the American Music Awards and other shows brimming with celebrities and promotional opportunities.
This is all a prequel to his dream prize, one of Hollywood's six major film studios. He was in talks to buy 49% of Paramount Pictures until the deal was scotched amid a shake-up at the studio's parent company, Viacom Inc.
Other Chinese tycoons have invested in Hollywood, but Mr. Wang's interests go far beyond buying access to glitzy premieres and lavish after-parties. After making a fortune in property development, Mr. Wang has publicly stated that he is on a mission to make China a dominant global force in entertainment. The mogul's current bid to buy Dick Clark Productions for about $1 billion would follow his 2012 purchase of theater chain AMC Entertainment Holdings Inc. for $2.6 billion and production company Legendary Entertainment this year for $3.5 billion. AMC, meanwhile, has announced plans to buy rival Carmike Cinemas Inc. for $1.2 billion, a deal that would make Mr. Wang's holdings the biggest film exhibitor in the U.S., and the world. The aggressive deal making is starting to draw attention from U.S. government officials and industry executives, who see both Mr. Wang and China as threats to Hollywood's dominance in entertainment as a business and a cultural force. On Sept. 15, 16 members of the House of Representatives wrote a joint letter asking the Government Accountability Office to consider expanding the scope of the Committee on Foreign Investment in the U.S. so it could review Chinese acquisitions of U.S. media companies under the same national-security rules it uses for sectors such as aerospace. Dalian Wanda's recent acquisitions, the representatives wrote, have heightened "concerns about China's efforts to censor topics and exert propaganda controls on American media." China has proven adept at influencing the movie business even without splashy takeovers. China's box-office market is expected to surpass the U.S. in the next few years, and the country's ticket sales already weigh heavily on Hollywood decision-making. Sequels to movies like "Pacific Rim" are sometimes greenlit largely due to success of the earlier version in China, even if they disappointed in North America.
A former People's Liberation Army commander whose father trudged across China with Mao Zedong during the Long March, Mr. Wang made his fortune as a developer, building the shopping plazas, office buildings and apartment complexes that helped fuel China's economic expansion.
His business career began after he retired from the army and took a job with the provincial government in Dalian, a seaport city on China's northeast coast. He turned around a failing property development unit and never looked back, completing increasingly ambitious projects including a series of "Wanda Plazas" that feature retail shops, cinemas and offices.
In a question-and-answer session with students at Harvard Business School last year, Mr. Wang was asked whether Dalian Wanda's rapid growth had been aided by friends in high places. Corporate filings in China show that Deng Jiagui, who is married to President Xi's sister Qi Qiaoqiao, owned shares in Dalian Wanda Commercial Properties before it went public in 2014.
"Wanda has no political affiliation," Mr. Wang replied, according to a transcript of the Oct. 15, 2015, event. He said Mr. Deng "sacrificed the opportunity to realize a huge return in investment" by selling his stake two months before the public offering. Dalian Wanda Group has three major arms in development, entertainment and finance, with Mr. Wang the majority owner of the master holding company. Dalian Wanda is based in Beijing, surrounded by other Wanda projects, including a five-star Sofitel hotel and a high-end IMAX Corp. theater. It reported revenue of 290 billion yuan in 2015, or $43.5 billion. Of that amount, 190 billion yuan came from its commercial property holdings. The cultural group, which includes entertainment, pulled in 51 billion yuan. The closely held company didn't disclose its profit. Some former employees say aspects of Wanda's corporate culture are more akin to that of a military unit than the more casual, freewheeling style associated with Hollywood.
Workers must swipe an electronic card when they arrive, these people say, adding that the dress code dictates collared shirts and suits for men, while women are warned against wearing short skirts and flashy nail polish.
Employees are also expected to take off their hats, overcoats and gloves before entering their offices, the people said. So far, Mr. Wang has largely been content to let American executives run the Western entertainment businesses he has acquired, although some at headquarters chafe under Wanda's rigid operating structure. "Wanda is a great platform with good resources, but its management style drives people who want to make good films crazy," said one former executive with Wanda's Chinese film-production unit who left to start up his own production house. At AMC theaters, Mr. Wang kept senior managers in place but turned up the speed, fast-tracking the company's initial public offering, said Gerry Lopez, the chain's former chief executive. During his time there, Mr. Lopez said Mr. Wang took a more direct interest in AMC than might be expected of a chairman overseeing such a vast company. "He's total control. Every decision, period, gets made by one guy," Mr. Lopez said. A company spokesman said: "AMC Theatres is an American company run entirely by its American management team from its headquarters in Kansas City," adding, "Wanda does not participate in any of the day-to-day running of AMC, nor does Wanda make any decisions related to which films play in AMC Theatres." Mr. Lopez recalled that Mr. Wang said at their first meeting in 2010 he wanted to dominate four businesses in China: commercial real estate, department stores, cinemas and hotels.
"Upon achieving that No. 1 status in China, he wanted to then become No. 1 in the world in every one of those areas of business," said Mr. Lopez.
Mr. Lopez started mentally cataloging the global competitors that Mr. Wang was saying he wanted to overtake. "I remember sitting there going, 'Say what?' " Mr. Wang poured in money to upgrade theaters with luxurious recliner seats and expanded menus. By the time AMC went public in 2013, the company's recliner concept was a proven success soon adopted by chains around the world, including Wanda's theaters in China. Along with his entertainment acquisitions, Mr. Wang has also invested in European soccer, luxury yachts and an international sports marketing and media rights firm. In 2015, Wanda paid $650 million for the company that stages Ironman triathlons.
There have been stumbles. Analysts question whether the company overpaid for entertainment assets such as Legendary, which has produced summer blockbusters including "Jurassic World," and "Godzilla."
Debt-rating companies have also flagged its commercial-property division's high debt levels, at one point downgrading the unit's bonds to junk status on expectations that falling sales revenue wouldn't be able to support its spending plans. This summer, Wanda closed a movie theme park in the central Chinese city of Wuhan for upgrades and renovations. The park, open for only 19 months, had suffered poor attendance, according to people familiar with the situation. Theme parks are one of Wanda's biggest plays in entertainment, with the company opening its latest in September. Last spring, amid the frenzy over the opening of Shanghai Disneyland, Mr. Wang went on China's CCTV to promote his own parks. Pointedly making the comparison with Disney, he said his parks celebrate Chinese culture. "We want to be a model for Chinese private enterprise, and we want to establish a global brand for Chinese firms," he said on the broadcast. Mr. Wang's goal of making China a moviemaking power in its own right is taking shape in the coastal city of Qingdao, a former German colony. There, Wanda is building what it calls the Oriental Movie Metropolis that will include 30 soundstages, including one with a giant tank for filming underwater scenes. Among those attending the groundbreaking three years ago were Leonardo DiCaprio, Nicole Kidman and producer Harvey Weinstein.
"People don't normally agree with how Wanda does things, but if they want to get somewhere, they will," said a film director in China who has worked with Wanda. "If they make mistakes, they're big enough that they can spend money and do it again."
In the heart of Beverly Hills, Wanda is planning a $1.2 billion Wanda hotel and condo development. If Mr. Wang is able to overcome local opposition to the project, some entertainment executives expect the Wanda hotel to become an unofficial headquarters for Chinese-Hollywood deal making.
Signs bearing the Wanda name have already appeared around the site on Santa Monica Boulevard, 10 miles from the famous Hollywood sign.
Source: The Wall Street Journal
This is all a prequel to his dream prize, one of Hollywood's six major film studios. He was in talks to buy 49% of Paramount Pictures until the deal was scotched amid a shake-up at the studio's parent company, Viacom Inc.
Other Chinese tycoons have invested in Hollywood, but Mr. Wang's interests go far beyond buying access to glitzy premieres and lavish after-parties. After making a fortune in property development, Mr. Wang has publicly stated that he is on a mission to make China a dominant global force in entertainment. The mogul's current bid to buy Dick Clark Productions for about $1 billion would follow his 2012 purchase of theater chain AMC Entertainment Holdings Inc. for $2.6 billion and production company Legendary Entertainment this year for $3.5 billion. AMC, meanwhile, has announced plans to buy rival Carmike Cinemas Inc. for $1.2 billion, a deal that would make Mr. Wang's holdings the biggest film exhibitor in the U.S., and the world. The aggressive deal making is starting to draw attention from U.S. government officials and industry executives, who see both Mr. Wang and China as threats to Hollywood's dominance in entertainment as a business and a cultural force. On Sept. 15, 16 members of the House of Representatives wrote a joint letter asking the Government Accountability Office to consider expanding the scope of the Committee on Foreign Investment in the U.S. so it could review Chinese acquisitions of U.S. media companies under the same national-security rules it uses for sectors such as aerospace. Dalian Wanda's recent acquisitions, the representatives wrote, have heightened "concerns about China's efforts to censor topics and exert propaganda controls on American media." China has proven adept at influencing the movie business even without splashy takeovers. China's box-office market is expected to surpass the U.S. in the next few years, and the country's ticket sales already weigh heavily on Hollywood decision-making. Sequels to movies like "Pacific Rim" are sometimes greenlit largely due to success of the earlier version in China, even if they disappointed in North America.
A former People's Liberation Army commander whose father trudged across China with Mao Zedong during the Long March, Mr. Wang made his fortune as a developer, building the shopping plazas, office buildings and apartment complexes that helped fuel China's economic expansion.
His business career began after he retired from the army and took a job with the provincial government in Dalian, a seaport city on China's northeast coast. He turned around a failing property development unit and never looked back, completing increasingly ambitious projects including a series of "Wanda Plazas" that feature retail shops, cinemas and offices.
In a question-and-answer session with students at Harvard Business School last year, Mr. Wang was asked whether Dalian Wanda's rapid growth had been aided by friends in high places. Corporate filings in China show that Deng Jiagui, who is married to President Xi's sister Qi Qiaoqiao, owned shares in Dalian Wanda Commercial Properties before it went public in 2014.
"Wanda has no political affiliation," Mr. Wang replied, according to a transcript of the Oct. 15, 2015, event. He said Mr. Deng "sacrificed the opportunity to realize a huge return in investment" by selling his stake two months before the public offering. Dalian Wanda Group has three major arms in development, entertainment and finance, with Mr. Wang the majority owner of the master holding company. Dalian Wanda is based in Beijing, surrounded by other Wanda projects, including a five-star Sofitel hotel and a high-end IMAX Corp. theater. It reported revenue of 290 billion yuan in 2015, or $43.5 billion. Of that amount, 190 billion yuan came from its commercial property holdings. The cultural group, which includes entertainment, pulled in 51 billion yuan. The closely held company didn't disclose its profit. Some former employees say aspects of Wanda's corporate culture are more akin to that of a military unit than the more casual, freewheeling style associated with Hollywood.
Workers must swipe an electronic card when they arrive, these people say, adding that the dress code dictates collared shirts and suits for men, while women are warned against wearing short skirts and flashy nail polish.
Employees are also expected to take off their hats, overcoats and gloves before entering their offices, the people said. So far, Mr. Wang has largely been content to let American executives run the Western entertainment businesses he has acquired, although some at headquarters chafe under Wanda's rigid operating structure. "Wanda is a great platform with good resources, but its management style drives people who want to make good films crazy," said one former executive with Wanda's Chinese film-production unit who left to start up his own production house. At AMC theaters, Mr. Wang kept senior managers in place but turned up the speed, fast-tracking the company's initial public offering, said Gerry Lopez, the chain's former chief executive. During his time there, Mr. Lopez said Mr. Wang took a more direct interest in AMC than might be expected of a chairman overseeing such a vast company. "He's total control. Every decision, period, gets made by one guy," Mr. Lopez said. A company spokesman said: "AMC Theatres is an American company run entirely by its American management team from its headquarters in Kansas City," adding, "Wanda does not participate in any of the day-to-day running of AMC, nor does Wanda make any decisions related to which films play in AMC Theatres." Mr. Lopez recalled that Mr. Wang said at their first meeting in 2010 he wanted to dominate four businesses in China: commercial real estate, department stores, cinemas and hotels.
"Upon achieving that No. 1 status in China, he wanted to then become No. 1 in the world in every one of those areas of business," said Mr. Lopez.
Mr. Lopez started mentally cataloging the global competitors that Mr. Wang was saying he wanted to overtake. "I remember sitting there going, 'Say what?' " Mr. Wang poured in money to upgrade theaters with luxurious recliner seats and expanded menus. By the time AMC went public in 2013, the company's recliner concept was a proven success soon adopted by chains around the world, including Wanda's theaters in China. Along with his entertainment acquisitions, Mr. Wang has also invested in European soccer, luxury yachts and an international sports marketing and media rights firm. In 2015, Wanda paid $650 million for the company that stages Ironman triathlons.
There have been stumbles. Analysts question whether the company overpaid for entertainment assets such as Legendary, which has produced summer blockbusters including "Jurassic World," and "Godzilla."
Debt-rating companies have also flagged its commercial-property division's high debt levels, at one point downgrading the unit's bonds to junk status on expectations that falling sales revenue wouldn't be able to support its spending plans. This summer, Wanda closed a movie theme park in the central Chinese city of Wuhan for upgrades and renovations. The park, open for only 19 months, had suffered poor attendance, according to people familiar with the situation. Theme parks are one of Wanda's biggest plays in entertainment, with the company opening its latest in September. Last spring, amid the frenzy over the opening of Shanghai Disneyland, Mr. Wang went on China's CCTV to promote his own parks. Pointedly making the comparison with Disney, he said his parks celebrate Chinese culture. "We want to be a model for Chinese private enterprise, and we want to establish a global brand for Chinese firms," he said on the broadcast. Mr. Wang's goal of making China a moviemaking power in its own right is taking shape in the coastal city of Qingdao, a former German colony. There, Wanda is building what it calls the Oriental Movie Metropolis that will include 30 soundstages, including one with a giant tank for filming underwater scenes. Among those attending the groundbreaking three years ago were Leonardo DiCaprio, Nicole Kidman and producer Harvey Weinstein.
"People don't normally agree with how Wanda does things, but if they want to get somewhere, they will," said a film director in China who has worked with Wanda. "If they make mistakes, they're big enough that they can spend money and do it again."
In the heart of Beverly Hills, Wanda is planning a $1.2 billion Wanda hotel and condo development. If Mr. Wang is able to overcome local opposition to the project, some entertainment executives expect the Wanda hotel to become an unofficial headquarters for Chinese-Hollywood deal making.
Signs bearing the Wanda name have already appeared around the site on Santa Monica Boulevard, 10 miles from the famous Hollywood sign.
Source: The Wall Street Journal