A Chinese conglomerate has purchased a Hollywood film studio, in what is being called “China’s largest cross-border cultural acquisition to date.” Dalian Wanda Group announced on January 12 that it has acquired Legendary Entertainment for $3.5 billion. A signing ceremony for the deal took place on Tuesday in Beijing.
Wanda Group, under Chairman Wang Jianlin, began as a real estate company, and made its name in commercial property development. Recently, however, the firm has become equally well-known for its push into the entertainment industry, especially cinema. According to the group’s website, it operates 187 theaters in China, accounting for 14.5 percent of the country’s domestic box office. It also acts as a film production firm through Wanda Media, and operates a film distribution company (Continental Film Distribution).
Wanda took its cinema aspirations global in 2012, when the group purchased the U.S.-based AMC cinema chain for $2.6 billion. That deal, at the time, was the largest-ever takeover of a U.S. firm by a Chinese company, according to Bloomberg. AMC was the second-largest cinema operator in North America at the time; Wanda Group’s acquisition of the company gave the Chinese group the title of world’s largest cinema operator.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Now, Wanda has further expanded its holdings in the film industry through its purchase of Legendary Entertainment. The studio has produced a steady stream of blockbusters over the past decade, from director Christopher Nolan’s The Dark Knight trilogy to The Hangover. More recent releases include 2014’s Interstellar and 2015’s Jurassic World, the latter of which is the fourth-highest grossing film of all time (behind Avatar, Titanic, and the latest Star Wars movie). Overall, according to Legendary, its films have grossed over $12 billion at box offices worldwide.
In the announcement of the deal, Wanda Group said that current Legendary CEO Thomas Tull would retain that position “and will continue to be responsible for [Legendary’s] day-to-day operations.” In a statement, Tull said that the two companies “will combine our respective strengths to bring an even better entertainment experience to the world’s audiences.”
Wanda Group chairman Wang Jianlin pointed out that the deal “will make Wanda Film Holdings Company the highest revenue-generating film company in the world, increasing Wanda’s presence in China and the US, the world’s two largest markets.” He also noted that, with the purchase of Legendary, “Wanda’s businesses will encompass the full scope of film production, exhibition and distribution, enhancing Wanda’s core competitiveness and amplifying our voice in the global film market.”
For Legendary, the deal is part of a larger trend of efforts to increase the company’s share of the Chinese market. In 2013, the company’s Chinese arm (Legendary East) partnered with state-owned China Film Group to co-produce films. That deal would allow Legendary to more easily produce films in China – and thus release them without having to work with the quota China’s government places on foreign films.
China Film Group has invested at least $10 million in two of Legendary’s upcoming films, Seventh Son and Great Wall. Great Wall, slated for a 2016 release, will star Matt Damon and Willem Dafoe alongside Chinese actors such as Andy Lau, Jing Tian, and Eddie Peng. The action-fantasy film will be the largest film intended for global distribution ever shot entirely in China.
That is exactly the sort of “soft power” China’s government has been drooling over for years – a big-budget, Hollywood blockbuster set in China, starring Chinese actors, and incorporating Chinese myths. And though Wanda Group is a private company, there’s no denying that its foray into the global film markets coincided with the Chinese Communist Party’s directive for Chinese film to gain global prominence.
And for Chinese film companies, the phrase “if you can’t beat ‘em, join ‘em” seems to be holding sway. After bemoaning the ability of Chinese animation studios to come up with anything as popular as the Kung Fu Panda series, for example, China found a work-around: Kung Fu Panda 3 will be co-produced by DreamWorks Animation and Chinese-based partners. That gives DreamWorks more access to the Chinese market, but also gives China’s censors direct control over the content of the film.
So should you be worried that the already-planned sequel to Jurassic World will be bankrolled by a Chinese company? Yes and no. The Chinese government has been up-front about wanting to control global perceptions of China – what it calls “telling China’s story well” – and when it is given such control, that inevitably limits the way filmmakers can talk about China, or even governments in general. For an example, see Chinese film director Jia Zhangke’s 2011 speech on how much Chinese censorship limits his ability to make good movies.
However, the truth is that many film companies are already complying with Chinese government dictates – even without Chinese-based companies like Wanda Group having a controlling stake. The Chinese market is lucrative; getting into that market requires appeasing Chinese censors; ergo the relentless logic of big-budget films require that they shape narratives in such a way that the Chinese government will give them two thumbs up. With blockbusters like Iron Man 3 and Looper already going out of their way to shoehorn in Chinese actors and settings, whatever direction Wanda Group takes Legendary probably won’t be anything we haven’t seen before.