Wanda wants part of ‘Big Six’ stu­dios

China’s rich­est man has his sights set on a big chunk of Glit­ter­town. Now comes the hard part.

China Daily (USA) - - FRONT PAGE - By AMY HE in New York amyhe@chi­nadai­lyusa.com

Wang Jian­lin’s an­nounce­ment that Wanda will set up a multi­bil­lion-dol­lar in­vest­ment fund to in­ject cap­i­tal into Hol­ly­wood’s “Big Six” stu­dios will be a boon to the in­dus­try, de­spite re­cent head­lines about the US gov­ern­ment’s con­cerns over the com­pany’s ag­gres­sive in­vest­ment in Hol­ly­wood, in­dus­try in­sid­ers said.

“It cer­tainly props up Hol­ly­wood. If you look at the his­tory of Hol­ly­wood, it’s propped up by eq­uity in­vest­ment from third par­ties, and with­out it we would be a dy­ing in­dus­try, so that’s great,” said Schuyler Moore, part­ner of the cor­po­rate en­ter­tain­ment depart­ment at Stroock & Stroock & La­van LLP.

“If some­body wants to come in and put in eq­uity, it gives us an­other cou­ple of years to fig­ure out [who else will] come in and in­vest in Hol­ly­wood. It’s part of the non-stop at­trac­tion of Hol­ly­wood,” he said.

Wang, China’s rich­est man and founder of Dalian Wanda Group, said that he would set up the in­vest­ment fund as he looks to ac­quire one of them, which he has long ex­pressed an in­ter­est in as part of Wanda’s global en­ter­tain­ment strat­egy.

“I wanted to ac­quire one of the Big Six, but whether we can is a dif­fer­ent story — it’s un­cer­tain,” said Wang in an in­ter­view with The Hol­ly­wood Re­porter from his com­pany’s Beijing head­quar­ters.

“I might as well start from wher­ever I can, such as through in­vest­ment with all six,” he said. “We will con­tinue to work on a po­ten­tial ac­qui­si­tion. But it won’t hurt to start by do­ing what we can. Par­tic­i­pat­ing via in­vest­ment seems like a wise choice for the time be­ing.”

Moore said that it’s un­likely any in­vest­ment will trig­ger con­gres­sional over­sight, de­spite a call to ac­tion from US Congress mem­bers late last Septem­ber in a let­ter to the Gov­ern­ment Ac­count­abil­ity Of­fice, be­cause there have al­ready been prece­dents of for­eign third par­ties tak­ing own­er­ship of US stu­dios, such as Mat­sushida Elec­tric (now known as Pana­sonic) pur­chas­ing Uni­ver­sal Stu­dios, and Sony pur­chas­ing Columbia Pic­tures.

“No­body said ‘boo’. I just don’t think it’s rel­e­vant. The fact that a cou­ple of sen­a­tors wrote a let­ter ask­ing for [fur­ther ac­tion], the rea­son they wrote the let­ter is be­cause they’ll never, ever get ac­tion on the floor. I don’t think it raises any se­cu­rity con­cerns so I don’t think any­one will give a hoot,” he said.

Christo­pher Spicer, a film fi­nance lawyer with Akin Gump Strauss Hauer & Feld LLP, said that a co-fi­nanc­ing in­vest­ment in var­i­ous stu­dios is noth­ing out of the or­di­nary, though if Wanda did end up own­ing a US stu­dio, its in­vest­ment in mul­ti­ple play­ers in the in­dus­try could be prob­lem­atic down the line.

“If some­one owns a ma­jor­ity in­ter­est in one of the Big Six stu­dios with pro­duc­tion and dis­tri­bu­tion ca­pa­bil­i­ties and then makes in­vest­ments in the others, putting aside any is­sues the gov­ern­ment may have, you would want all your re­sources and ef­forts go­ing into that stu­dio, not a com­peti­tor,” he said.

Stan­ley Rosen, direc­tor of East Asian Stud­ies at the Univer­sity of South­ern Cal­i­for­nia, said he was sur­prised to learn about the in­vest­ment fund, as­sum­ing that Wang is pos­si­bly giv­ing up the idea of buy­ing more than 50 per­cent of a stu­dio for now. He could po­ten­tially in­crease his in­vest­ments over time as the op­por­tu­nity presents it­self, Rosen said.

“Pre­sum­ably, he would want to gain enough of a per­cent­age some­where to gain a seat on the board. He could, again even­tu­ally, sell his stakes in other stu­dios if and when one stu­dio be­came more avail­able,” he said.

I wanted to ac­quire one of the Big Six, but whether we can is a dif­fer­ent story.” Wang Jian­lin, founder, Dalian Wanda Group

PA­TRICK T. FAL­LON / BLOOMBERG VIA GETTY IM­AGES

Bil­lion­aire Wang Jian­lin, chair­man and pres­i­dent of Dalian Wanda Group Co., speaks dur­ing an event in Los An­ge­les on Oct 17. Wang un­veiled sub­si­dies worth more than $150 mil­lion a year to lure film mak­ers to his new stu­dio com­plex in China’s coastal city of Qing­dao.

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