A combination of government support and investment in the nascent Chinese film industry, as well as that country’s growing middle class, has led to a flurry of deals between Hollywood and Chinese companies over the past few years.
Kicking things off was Dalian Wanda Group’s 2012 acquisition of AMC Entertainment Holdings, which was the second-largest theater chain in the United States and Canada at the time. The deal paved the way for the Chinese real estate and entertainment conglomerate to become the largest film exhibitor in this country.
For U.S. companies, the deals offer access to a market that will soon offer the world’s largest box office and whose government limits the number of movies produced by non-Chinese companies to 34 a year. The investments also diversify the portfolios of the Chinese investors, many of whom specialize in industries other than entertainment, as well as help them establish dominance in the Chinese film production market.
Box-office revenue in China grew to $7 billion in 2015 from $900 million in 2009, according to Dominic Ng, chairman and chief executive of East West Bank. By comparison, the U.S. box office generated more than $11 billion that year.
“In terms of following film industry news, this is one of the biggest stories since the coming of sound,” said Jason Squire, an associate professor at USC’s School of Cinematic Arts and editor of “The Movie Business Book.”
Here are some of the biggest deals in the last two years:
Dalian Wanda announced in January of last year that it would acquire Legendary Entertainment, a Burbank production company, for $3.5 billion, reportedly the largest deal by a Chinese company in the history of the American film industry. Dalian Wanda had planned to integrate the film studio, which was one of the financiers of 2015’s “Jurassic World,” into its publicly traded film division, but those plans were put on hold in August due to China’s weakening stock market.
Dick Clark Productions-
Dalian Wanda made its first foray into TV in November when it paid $1 billion for Dick Clark Productions Inc., a Santa Monica production company founded by television host Dick Clark in 1957, which produces the Golden Globes. Reports of the deal, which Wanda said would leave Dick Clark Productions’ management team in place, prompted members of Congress to call for oversight of Chinese acquisitions of U.S. media companies.
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