Se­na­tor calls for closer look at me­dia M&A

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

A re­quest by US Se­na­tor Charles Schumer for more scru­tiny of Chi­nese com­pa­nies ac­quir­ing US me­dia com­pa­nies, fol­low­ing a Septem­ber re­quest from 16 mem­bers of Congress, lends new Demo­cratic sup­port to an is­sue that has been raised by Pres­i­dent-elect Trump and other Repub­li­cans.

In a let­ter sent Wed­nes­day ad­dressed to US Trea­sury Sec­re­tary Jack Lew, Schumer, a New York Demo­crat who will re­place Harry Reid of Ne­vada as Se­nate Mi­nor­ity Leader, said he is con­cerned that the ac­qui­si­tions “re­flect the strate­gic goals of China’s govern­ment” and named Dalian Wanda as an ex­am­ple, ac­cord­ing to The Wall Street Jour­nal, which first re­viewed the let­ter.

He added that com­pa­nies like Wanda, which re­cently agreed to ac­quire Dick Clark Pro­duc­tions for $1 bil­lion, might need to be fur­ther re­viewed to make sure that US com­pa­nies are able to com­pete fairly.

Schumer also said that Congress next year will “work on leg­is­la­tion to fur­ther ex­pand CFIUS over­sight au­thor­ity”, re­fer­ring to the Com­mit­tee on For­eign In­vest­ment in the US.

Trump has said that his ad­min­is­tra­tion will look more closely at for­eign deals, and he was copied on the let­ter.

The let­ter comes af­ter a Septem­ber let­ter sent to the US Govern­ment Ac­count­abil­ity Of­fice, in which mem­bers of Congress ex­pressed con­cern over for­eign ac­qui­si­tions of strate­gi­cally im­por­tant sec­tors, a let­ter that also high­lighted Wanda.

In re­ac­tion to the Septem­ber let­ter from the Congress mem­bers, The Wall Street Jour­nal pub­lished an op-ed say­ing that US reg­u­la­tory of­fi­cials shouldn’t “in­trude into how movies get made” and in scru­ti­niz­ing fi­nance deals would “politi­cize in­vest­ment in a huge swath of the economy”.

Christo­pher Spicer, a film-fi­nance lawyer with Akin Gump Strauss Hauer & Feld, said added that co-fi­nanc­ing deals would prob­a­bly be less of an is­sue than out­right ac­qui­si­tions, which Wang Jian­lin, chair­man and founder of Wanda, said he wants to do. Wang has long said that he would like to ac­quire one of Hol­ly­wood’s “Big Six” stu­dios and has al­ready ac­quired Leg­endary En­ter­tain­ment.

Chi­nese in­vest­ments into Hol­ly­wood will con­tinue, but “Wang’s dream of own­ing an Amer­i­can stu­dio — never likely in any case — is now dead in the wa­ter,” said Stan­ley Rosen, a po­lit­i­cal sci­ence pro­fes­sor at USC.

“I think this Schumer let­ter does in­deed put more pres­sure on the com­mit­tee ap­prov­ing for­eign in­vest­ment in the US be­cause you not only have Trump talk­ing about re­ciproc­ity with China — that is, if we can’t take a con­trol­ling in­ter­est in any of their me­dia, why should we al­low them to take con­trol of any of our key me­dia out­lets — but you also have the Democrats in Congress pur­su­ing this same ar­gu­ment,” he said.

Wang had pre­vi­ously in­sisted that the ac­qui­si­tions were a pure “com­mer­cial in­tent” and that US law­mak­ers were “over­wor­ried,” ac­cord­ing to in­ter­views with The Hol­ly­wood Re­porter and CNN from the sum­mer.

De­spite con­cerns that there might be changes in moviemak­ing de­ci­sions, Spicer said in a pre­vi­ous interview that even with a new owner, Leg­endary En­ter­tain­ment seems to be “run­ning ex­actly the same way it was six months ago. I haven’t talked to any­one who’s said, ‘Leg­endary is so dif­fer­ent in its operations now.’”

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