On March 14th, 2017, Variety’s Gene Maddaus and Brent Lang reported on a massive mistake left by China’s richest individual, Wang Jianlin, chairman of the Dalian Wanda Group, who failed to pick up Dick Clark Productions (DCP) and faces trouble with Legendary Entertainment. Last fall, the Wanda Group agreed to pick up Dick Clark Productions, which syndicates the Golden Globes and the “Rockin’ New Years Eve” program was passed up last week for $1 billion, but after huge box office (BO) losses from Legendary, the deal was not struck (Maddaus and Lang 2017).
The stunning reversal is a major embarrassment for Wang and puts his conquest of Hollywood, once seemingly inevitable, in grave doubt. It also raises broader concerns about the future of Chinese investments in the U.S. entertainment business…(Maddaus and Lang 2017).
While some suggest that the DCP acquisition price was too high, others point to second thoughts on Wang’s part due to DCP not having full rights to the award shows, simply the rights to produce them – but close sources find the second theory to be ridiculous due to Wang hold a cocktail party with the Hollywood Foregin Press, suggesting Wang’s knowledge of HPFA’s rights to the Globes (Maddaus and Lang 2017).
The problem, according to these sources, is a change in government policy, as Maddaus and Lang state: “Foreign investment by Chinese firms soared to record heights in 2016, but in November the government began to tighten the reins…. under the new rules, the conglomerate could not move its domestic capital overseas” (Maddaus and Lang 2017).
Legendary Entertainment, which had been bought by Wang last year for a brow-raising #3.5 billion, has struggled with BO returns – recent failures “Warcraft” and “The Great Wall” have left Wang sort of funds, thus resulting in not enough money to purchase DCP (Maddaus and Lang 2017).
Despite all of this however, there is hope in “Kong: Skull Island”, which so far, has boasted a fantastic box office return, within the first week alone taking up half of the film’s budget. “The film debuted to $142.6 million worldwide last weekend, a hefty result save for its $185 million production budget. It will need to do well overseas in order to wind up in the black” (Maddaus and Lang 2017).
While once a non-risk box office return, with these recent troubles, China may have to be given up for companies looking to make an overseas profit; as media analyst Hal Vogel pointed out: “The game is going to get tougher to raise money, Hollywood may not want to find another source of financing, but the market conditions may be such that they have no choice” (Maddaus and Lang 2017).
Perhaps it is time then, to consider another market to appeal to, I hear that Japan and South Korea are promising.
Maddaus, Gene, and Brent Lang. “After Dick Clark Productions Deal Fails to Close, What’s Next for Dalian Wanda?” Variety. N.p., 14 Mar. 2017. Web. 14 Mar. 2017. <http://variety.com/2017/film/news/wanda-dick-clark-productions-deal-failure-hollywood-1202007964/>.