Senator calls for closer look at media M&A
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.’”