MCLC: Dalian Wanda

[Denton, Kirk]

MCLC LIST
From: kirk (denton.2 at osu.edu)
Subject: Dalian Wanda
***********************************************************

Source: NYT (1/20/13):
http://www.nytimes.com/2013/01/21/business/media/an-overture-from-china-fai
ls-to-win-hollywood.html

An Overture From China Is Yet to Win Hollywood
By MICHAEL CIEPLY

LOS ANGELES — In September, Wang Jianlin, the chairman and president of
China’s Dalian Wanda Group, told a news conference here of his plans to
invest at least $10 billion in both entertainment and commercial
properties in the United States.

To judge from the pace of the deal-making so far, it may take a while.

Wanda has been talking with some studios, as Mr. Wang promised when Wanda
completed its $2.6 billion acquisition of AMC Entertainment with a flashy
presentation in early September. But any progress has come in halting
steps, according to people briefed on the talks, who spoke on condition of
anonymity to avoid conflict with the principals.

And that probably carries an overall message about the film industry’s
current rush to do business in China: The promise is great, but much is
still being lost in translation.

“Hollywood would prefer to accept what they commonly call ‘dumb money’ and
not give very much back in return,” said Stanley Rosen, a University of
Southern California political science professor who has written
extensively about China. “China is now pushing back.”

Both sides are likely to continue pressing their efforts; Hollywood is
eager to have a partner that can help it tap into China’s fast-growing
film market, and Wanda wants to strengthen its foothold in the lucrative
North American market. But the slow going underscores the disconnect
inherent in negotiations between parties whose goals reflect their own,
more narrow interests.

Wanda is looking to be involved in potentially lucrative Hollywood
projects. But big studios are extremely wary of sharing the pie with
partners who do not want to settle for less than the very best the studios
have to offer.

At 20th Century Fox, where Mr. Wang paid a call in late summer, the studio
was quickly reported in The Los Angeles Times to be completing a deal
<http://articles.latimes.com/2012/sep/07/entertainment/la-et-ct-fox-wanda-c
hina-20120907> under which it would co-produce films with Wanda in China.

Five months later, according to one person briefed on the dealings, the
discussions continue over the possible coproduction of some Chinese
language projects, and the relationship is cordial. But there is, so far,
no Fox-Wanda pact, partly because Wanda would prefer to get involved with
some mainstream Hollywood productions, and Fox has not been ready to
discuss that.

A spokesman for Fox declined to comment on any dealings with Wanda. And
Wanda representatives did not respond to queries that were relayed through
Fleishman-Hillard, an American-based public relations firm that has
represented the Chinese company in the past.

At Sony Pictures Entertainment, another stop on Mr. Wang’s summer
itinerary, talks have centered on the possibility that Wanda would provide
financing of $300 million to $600 million for a slate of Hollywood films,
according to people who were briefed on the talks.

One of those people said a deal appeared close. But another said it has
been hung up over financial terms — Sony is said to be demanding a higher
fee as the distributor of the films than Wanda, which would be paying for
them, would like. There are also questions about what movies would be
included. Sony would prefer to exclude its valuable sequels and prequels
to movies like the Spider-Man series, for instance; Wanda would prefer to
see everything on the table.

A spokesman for Sony declined to comment, adding that the studio generally
does not discuss its financing.

One clear step taken since Mr. Wang’s trip has been in a reverse direction.

A few months after Wanda’s acquisition of AMC Entertainment was completed,
according to a December report in the Santa Monica Daily Press, the
theater company informed the city of Santa Monica that it was terminating
<http://www.smdp.com/amc-backs-off-theater-development/115340> talks —
which had been going on for more than three years — about plans to build a
new entertainment complex near a central promenade, where AMC operates
three smaller, and aging, theaters.

Santa Monica officials had viewed the new complex, which was to cost about
$33 million, as a centerpiece in the renewal of its downtown. That area
will soon be served by a new rail line connecting it with Culver City and
downtown Los Angeles.

But the city, which is known for its elaborate development agreements and
close attention to things like public art and spaces, was notified,
shortly after completing an environmental impact report, that AMC and its
team had decided the project was not cost-effective.

Sun Dee Larson, a spokeswoman for AMC Entertainment, now a Wanda unit,
said in an e-mail last week that she was traveling in China and could not
immediately discuss the Santa Monica project. Ms. Larson also said she
could not provide a Wanda contact who might discuss the film financing
talks.

But Jason Harris, Santa Monica’s economic development manager, said city
officials had thought the project, which had been slowed while AMC
negotiated its own sale to Wanda, would benefit from new capital that came
with the new owner. Instead, he said, it bogged down, partly over the
theater company’s reluctance to commit to amenities like reserved seating.

Now, however, other potential theater developers are taking a look. “You
wouldn’t believe the level of interest,” said Mr. Harris.