China’s Wanda Forming Major Alliance With Sony Pictures

Associated Press

EXCLUSIVE: Chinese conglomerate Dalian Wanda Group is about to broaden its Hollywood footprint in a substantial way. The company is closing a significant co-finance deal with Sony Pictures that will see Wanda take minority stakes in certain Sony tentpole-sized films, the ones that have global appeal. This is all happening quickly and the deal is expected to be closed and could be announced by next week. In addition to funding, the deal gives Sony access to Wanda’s marketing and exhibition muscle in China. SPE Motion Picture Group chairman Tom Rothman, Columbia Pictures president Sanford Panitch and biz affairs chief Andrew Gumpert are finalizing the details with Wanda’s Jack Gao.

Wanda had been in the middle of a deal proposed by since-deposed Viacom chief Philippe Dauman to acquire a 49% stake in Paramount (Viacom announced today the deal has gone by the wayside), and it remains to be seen if that will happen down the line. Wanda’s presence in Hollywood films continues to grow, quickly. The company bought Legendary Entertainment for $3.5B in January, which essentially gives it a stake in half dozen or so event pictures on the Universal slate. Wanda separately has taken stakes in the Teenage Mutant Ninja Turtles and Transformers franchises at Paramount. The company owns 75% of AMC Theaters in the U.S. and also owns Australia’s Hoyt’s, and it has been on a buying spree that included buying the Chinese movie portal Mtime for $350 million, and then 51% of Omnigon, a consulting firm that helps sports, media and entertainment providers to develop mobile apps and websites, and Wanda invested $3.3B by 2024 in EuropaCity, a mega-theme park/resort/retail/sports project outside Paris.

Add this to Wanda’s status as the largest exhibitor in China with 18% of PROC screens, and its recent deal with Imax in a landmark deal for additional theaters. In an interview with Reuters this year, Wanda chief Wang Jianlin said that when the company adds its AMC Theaters stake to its purchase of Odeon & UCI Cinemas Group and Carmike Cinemas, Wanda will control 15% of global box office revenues, on course to reach its goal of controlling 20% ahead of the 2020 target. “My goal is to buy Hollywood companies and bring their technology and capability to China,” said the chairman earlier this year, saying he expected to invest multiple billions.

Sony uses numerous partners on their films. It has been an open question of whether its longtime slate partner Lone Star will continue in that capacity. Talks about a re-up are ongoing for Lone Star, which has taken 25% stakes in Sony Pictures. But there are hard feelings on the Sony side after Lone Star accepted but then found a way to wiggle out of a $40 million stake in Ghostbusters. It enraged Sony brass, which was left shouldering too much of a loss. The whole point of these co-financing deals is for studios to mitigate the risk, paying out when the movies over-perform, and cushioning the blow when they do not.

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