WSJ: China’s Wanda Group to Buy Dick Clark Productions for About $1 Billion
News story originally published at WSJ.com
By Erich Schwartzel
With his acquisition of Dick Clark Productions Inc., Chinese billionaire Wang Jianlin is moving a step closer to his goal of becoming a dominant force in global entertainment—but he may also be making himself a target for those who think China is playing too big a role in Hollywood.
Mr. Wang’s Dalian Wanda Group Co. said Thursday that it would acquire Dick Clark Productions Inc. for about $1 billion. The deal gives Wanda a TV production company that produces glitzy awards shows including the Golden Globes and the American Music Awards, adding to a portfolio that includes the AMC theater chain and film-production company Legendary Entertainment.
Since The Wall Street Journal first reported deal talks in September, 16 members of the House of Representatives have called for 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 national-security rules.
Wanda’s recent acquisitions, the representatives wrote, have heightened “concerns about China’s efforts to censor topics and exert propaganda controls on America media.”
The deal’s conclusion this week comes as Chinese entertainment executives gathered in Los Angeles to participate in half a dozen events that include the U.S.-China Film Summit and the U.S.-China Co-Production Film Summit and Film & TV Market.
“Most of the leaders of China’s entertainment industry are here in Los Angeles this week, and there are discussions between them about the concerns in Washington,” said Rob Cain, a Los Angeles-based film producer and entertainment-industry consultant to Hollywood studios operating in China.
“Whether those concerns are well-placed or not, they’re meaningful, and I think Wang is being reckless … and not being very politic about this at all,” Mr. Cain said.
Wanda declined to make its executives available to comment on the deal. In a recent speech to film industry leaders in Hollywood, however, the billionaire said profit, not propaganda, was his main pursuit.
Wanda said in a statement Thursday that the acquisition “marks Wanda’s first step into television content’,” and will complement “Wanda’s current focuses on the film, tourism, and sports industries.” It said Dick Clark’s management team “will remain in its entirety,” after the deal closes.
Dalian Wanda is buying Dick Clark Productions from Eldridge Industries. Founded by the late TV personality in 1957, Dick Clark Productions is based in Santa Monica and bills itself as the world’s largest producer of live entertainment programming.
In Hollywood, however, the $1 billion price tag has raised eyebrows since recent evaluations of the company by other potential acquirers valued it at hundreds of millions of dollars less, according to people familiar with the matter.
One Chinese entertainment executive said Wanda is buying Dick Clark to get its deep experience in producing TV shows.
”It is much faster to buy resources then starting up by yourself, as long as you have the money,” said Du Hua, chief executive of Beijing-based Yuehua Entertainment, an investor in Hollywood films including Paramount Pictures’ “Star Trek Beyond.”
Others have suggested that an acquisition of Dick Clark isn’t about owning the shows, which primarily make money through broadcasting their ceremonies. Instead, Mr. Wang may be planning to produce his own awards shows for China’s growing entertainment industry, Hollywood executives speculated.
Mr. Wang, who has an estimated net worth of $32.7 billion, according to Forbes, has repeatedly said publicly that he wants to invest in or own major Hollywood studios. He was in talks to buy 49% of Paramount Pictures until the deal was scrapped amid a shake-up at the studio’s parent company, Viacom Inc.
The Dick Clark acquisition continues Wanda’s moves from the distribution of content to the production of it. That transition began with the $3.5 billion acquisition of Legendary Entertainment, a producer of blockbuster films including “Jurassic World” and “Warcraft.”
Its movie-theater chain owned by AMC Entertainment Holdings Inc. is now the second-largest in the U.S. It would become the biggest under a pending deal to acquire rival Carmike Cinemas Inc.
And the empire is still expanding. Dalian Wanda is nearing completion of a “Movie Metropolis” in the northeastern Chinese coastal city of Qingdao, where Wanda hopes to lure foreign productions to its massive soundstages. Mr. Wang’s Movie Metropolis is counting on A-list talent to come to these soundstages to raise the profile of the hotels, apartment complexes and other real-estate holdings that surround the glitzy production hubs.
As talks continued with Dick Clark Productions in recent weeks, Wanda executives met with one important constituent: The Hollywood Foreign Press Association, which stages the Golden Globes. Concerned HFPA members questioned Wanda about the forthcoming ownership arrangement, and Wanda executives assured the organization they wouldn’t meddle in the awards, according to people familiar with the meeting.