Wanda & AMC

[GeneChing]

Hollywood and China: A Fad or Future of the Film Industry?
7:17 PM PDT 4/25/2016 by Rebecca Sun


From left: Tang, Emanuel, Gao, Gianopulos, Li, Ng, Simonds
BeBe Jacobs/Courtesy of Committee of 100

An all-star executive panel including Ari Emanuel, Jim Gianopulos, Bob Simonds and the head of Wanda Pictures discussed the future of the world's two largest film industires in Beverly Hills on April 16.

It's not easy to get busy Hollywood honchos like Ari Emanuel, Jim Gianopulos and Bob Simonds in a room together, but the lure of China will do the trick.

The Chinese movie market is on pace to surpass North America's as the world's largest next year, after growing an astounding 48.7 percent to hit $6.78 billion in 2015. "Nothing [else] today grows at that level," Gianopulos said on a panel hosted by the Chinese-American organization Committee of 100 on April 16 at the Beverly Wilshire. The Fox chair and CEO noted that since China's per-capita attendance and movie theater penetration rates are still dwarfed by the United States, "there's enormous potential to be had."

That belief has guided Simonds in establishing his two-year-old studio STX Entertainment, which counts Chinese private equity firm Hony Capital as its third-largest shareholder. "China had to be core to the fabric, not an add-on," said the chairman and CEO of STX, which struck an 18-picture slate deal with China's Huayi Brothers last year. "If you want a career lasting the next 20 years, you have to be relevant in China."

The panel was moderated by Simond's longtime friend Donald Tang, founder of Tang Media Partners and former head of Bear Stearns in China, who questioned the sustainability of Hollywood's love affair with China, considering the suitors (Japan, France, Canada, Germany) that had come and gone before.

Emanuel pointed out that one difference is that "it's not just Chinese companies coming here – a lot of us are moving our operations and opportunities to China," noting that he has flown to China around ten times in the last three months.

In a Hollywood Reporter cover story last month, the WME-IMG co-CEO was coy when asked to describe the agency's China strategy, calling it simply "a very important puzzle to solve." On Saturday's panel he provided a few more details, indicating that the rollout would begin with sports rights and partnerships for events. "We'll be going in full-blown with a couple of players that will take advantage of where we sit on the ground with participatory sports, and then migrating into film and TV assets and other things we're doing," he said, adding that the combined agency currently has about 100 executives in China. "IMG has been in China for 30 years, and we've established new relationships as well. And we're just now starting to move our entertainment assets into the territory."

Simonds noted that the size of China's domestic market sets it apart from previous foreign partners. "When we were taking money from the Japanese or the Germans, that was us offsetting risk and taking money because it was available," Simonds said. "America is great at exporting culture because we were the only country in the world with a big enough domestic market to have a muscular, vibrant movie and TV industry. That is about to change. For the first time, another country besides America is going to have a giant domestic market. China is about to become a major player in terms of storytelling."

That may shift the current trend of U.S.-China co-productions, which to date mostly have been characterized by Chinese financing of global Hollywood tentpoles. Li Ruigang, founding chairman of China Media Capital, which launched joint venture Flagship Entertainment with Warner Bros. last September to produce Chinese-language films, believes that such co-productions are simply "an interim product."

"The Chinese government is getting smarter at defining which movies are co-productions. If you just put very little Chinese elements inside, it probably will not work," he continued. "China stands not only for deep pockets, but also deep stomachs. And the demand in the domestic market is getting higher, but there are missing pieces in terms of the quality of the movies and how we can diversify the revenue sources instead of just relying on the box office."

"The industry there is still the wild, wild west. It's not even close to being heavily industrialized," said Wanda Cultural Industry Group vice president Jack Gao of the Chinese market, adding that a key objective of the Chinese conglomerate's multi-billion dollar acquisitions of AMC and Legendary has been self-education. "We're not pretending we're experts in the U.S. We have to learn by connecting to Hollywood, connecting to consumers and connecting to technology, and setting the right strategic investments."

Panelist Dominic Ng, chairman and CEO of East West Bank, noted that despite the record-breaking success of Chinese blockbusters like The Mermaid ($526.8 million in China) and Monster Hunt ($381.9 million), those movies have not succeeded outside the domestic market.

Simonds chalked that up to an issue of cultural differences in syntax, or the storytelling structure of the films. "Because we're an amalgamation of many different cultures, if an American film has enough universal themes, it can export to other countries," he explained. "Americans have conditioned the world to consume a story a certain way. The key is to merge or create a new syntax that's equally global."

Gianopulos agreed. "The U.S. has had a multicultural industry from the beginning, so by nature the movies were made for diverse audiences," he said, noting that Fox was able to adapt its Bride Wars for China (via its partnership with Bona Film Group) and Alibaba will remake its Night at the Museum. "If China is going to develop an export business, it needs a willingness to accept diversity or the possibility that it may not be as rooted in the cultural form that it started with. That may be something to learn from Hollywood."

Ng posed a different vision of the future: "Right now everyone in China is coming to the U.S. to learn how to make a movie that caters to the global audience. That's a good strategy for now, but China will still grow because the population is so much bigger. Fifteen years from now a movie like Mermaid will do a billion in China. So is Hollywood going to switch gears to make Chinese movies?" The question provoked the session's loudest applause from the audience, composed of some of the wealthiest and most powerful Chinese-Americans in the country.

"The rich cultural history of China is something that hasn't fully been mined yet," Gianopulos acknowledged. "Friends in China are always telling me, 'There's this fable in China, you should get Jim Cameron to make this movie.' Here's the thing: If you give this fable to Hollywood and you ask it to make the fable for the world, by the time it comes back to China, you may not recognize it."

The executives all admitted that a true cross-cultural co-production has not yet succeeded. "There have been American films where you stuff some Chinese actors in it, or some Chinese films where you stuff some Americans in it, but a true co-production hasn't been cracked yet," Simonds said, adding that STX is making its own attempt with the upcoming Martin-Campbell directed The Foreigner, starring Jackie Chan and Pierce Brosnan. "But it will happen, and it will change everything."

Legendary is gambling $150 million on its fantasy epic The Great Wall, a co-production with China Film Group and LeVision, which Universal will release on Feb. 17, 2017. Gao predicted that it will be a "milestone," while Gianopulos raved about his set visit: "It was a staggering vision to see the level of effort and attention to detail that went into that project. The quality of the physical production is extraordinary."

"It will take many failures before the success will come about," said Ng (whose bank financed part of The Great Wall). He offered one resource as a pathway to a solution: "There are a lot of Chinese Americans aspiring to be in this industry. They know Chinese interests really well, and American styles really well. Many of them have not yet taken a big role in the industry, but hopefully smart execs on both ends will look into Chinese Americans, who are totally bicultural and understand what needs to be done to make co-productions effective and profitable and start tapping into these folks who are very good at making movies as well."

With all this buzz on the Great Wall, that film better be awesome

[GeneChing]

Just in case you read past this in the post above: "Alibaba will remake its Night at the Museum." I think this would be cool if it's a Chinese museum. Then the statues that would come alive would be like Buddha, Guanyin, Guan Gong and the Terracotta Warriors. Not to mention Tomb Guardians.

China's Alibaba Pictures to Remake 'Night at the Museum'
10:17 PM PDT 4/25/2016 by Rebecca Sun and Patrick Brzeski



'Night at the Museum'
Joe Lederer

The project is the latest collaboration between Hollywood and the upstart studio established by Chinese billionaire Jack Ma.

Alibaba Pictures, the Chinese film studio established by Jack Ma's e-commerce giant Alibaba Group, has acquired the rights to remake 20th Century Fox's Night at the Museum franchise.

The plans for a Chinese remake were mentioned in passing by Jim Gianopulos, CEO of Fox Filmed Entertainment, during a panel discussion at the Beverly Wilshire in Los Angeles on April 16.

A source in China with knowledge of the plans confirmed the agreement to THR. The project is understood to be in the early stages, with casting and a director yet to be secured.

Alibaba Pictures Group declined to comment.

The original Night at the Museum films, directed by Shawn Levy and starring Ben Stiller and the late Robin Williams, saw U.S. and international box office returns slide across the span of the franchise. Released in 2006, first film grossed $250 million in North America and $575 million worldwide, while the third picture earned $113.7 million in North America and $363.2 million worldwide in 2014. But in China, the trend has been reversed. The first film earned $8.3 million in the Middle Kingdom, while the third feature grossed $47 million. China's overall box office more than quadrupled during the same period.

Alibaba Pictures has invested in three Hollywood films from Paramount, but this will be its first remake of a major U.S. studio film. Last year, the upstart studio boarded Mission: Impossible — Rogue Nation, and last week it announced an investment in the forthcoming Paramount films Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond.

Other signs of the studio's deepening Hollywood ties include a recent partnership with Skydance Media to co-finance and produce The Flying Tigers, a China-set WWII pic to be scripted by Braveheart writer Randall Wallace.

Later this year, the studio will release its much anticipated Chinese-language feature debut, The Ferryman, directed by Zhang Jiajia and produced by Wong Kar-wai.

[GeneChing]

Soon, they may own it all.

AMC Entertainment May Offer $1.3B For Odeon & UCI Cinemas Group – Report
by David Lieberman
May 11, 2016 3:06pm



AMC Entertainment’s growth ambitions aren’t limited to its deal to buy Carmike, it seems: The exhibition chain, owned by China’s Wanda Group, is preparing to offer the equivalent of $1.3 billion for Europe’s Odeon & UCI Cinemas Group, Bloomberg reports.

Odeon & UCI is owned by Guy Hands’ private-equity company Terra Firma. He hired bankers last year to look for buyers. Wanda was known to be interested in the chain which has 2,238 screens at 242 theaters in the UK, Spain, Italy, Germany, Ireland, Austria, and Portugal.

AMC declined to comment.

RBC Capital Markets’ Leo Kulp says he’s “surprised at the timing of the deal” since AMC has agreed to pay $1.1 billion (including debt) for Carmike.

The companies are waiting for the agreement to be approved by antitrust officials as well as Carmike shareholders. Two of its largest investors, Mittleman Brothers and Driehaus Capital Management, are opposed, saying AMC’s $30 a share offer is too low.

But AMC CEO Adam Aron, who took charge in January, has made it clear that he — and his company’s owner — have big ambitions. “Wanda has global aspirations and I think it will be intriguing to see what joint opportunity there is for AMC and Wanda,” he told Deadline in December.

Stifel Research’s Benjamin Mogil says he detects “a strategic shift” under Aron, what might be “tied to increased capital outflow restrictions in China.”

[GeneChing]

a half B gone. daaaaaaaaaaaaaaaaaaaaaayum.

Wanda's Legendary Lost $500 Million in 2015, Chinese Filing Reveals
3:13 PM PDT 5/14/2016 by Patrick Brzeski


Legendary founder Thomas Tull and Wang Jianlin, chairman of Dalian Wanda Group
Jeffrey Mayer/WireImage/Tomohiro Ohsumi/Bloomberg via Getty Images

As the Chinese conglomerate moves to merge Legendary with a publicly listed subsidiary, previously private financial data has been made public for the first time.

The recent financial performance of Thomas Tull's Legendary Entertainment was made public for the first time Thursday in a Chinese regulatory filing that reveals more than half a billion dollars in losses last year.

Chinese conglomerate Dalian Wanda Group acquired Legendary for what was announced as a $3.5 billion deal in January — the first time a major U.S. production company has come under Chinese control. (Though many in Hollywood and elsewhere say the actual price will turn out to be lower.)

Headed by Wang Jianlin, China's richest man, Wanda currently is in the process of merging its film production holdings — including Legendary — with a publicly traded subsidiary, Wanda Cinema Line, which is China's largest movie theater operator. Entertainment stocks have been particularly hot on the Chinese markets, and the maneuver is expected to raise large sums of capital as Wanda's production operations become accessible to Chinese investors. But the impending transaction also has forced Wanda to disclose previously private financial data on Legendary.

The 355 pages of new documents obtained by The Hollywood Reporter show Legendary, which has backed such highly profitable films as Jurassic World and the Dark Knight films but has had less success in producing its own films, suffered a loss of $343.4 million (2.43 billion RMB) in 2014 on revenue of $403.3 million (2.63 billion RMB). In 2015, the company's losses deepened to $555.6 million (3.63 billion RMB) on revenue of $462.1 million (3.02 billion RMB).

The document cites several key factors behind the losses: "a substantial increase in non-cash, stock-based compensation expenses amid accelerated vesting of management options, higher advertisement and promotion cost and write-downs."

The accelerated vesting of stock options is understood to have taken place as Legendary allowed senior management to cash out in anticipation of the Wanda acquisition. Write-downs included such Legendary-backed flops as Seventh Son (2014) — a $95 million-plus fantasy that grossed only $114 million — and Michael Mann's $70 million Blackhat, which earned just $19.6 million worldwide. Guillermo del Toro's Crimson Peak (2015) and Danny Boyle's Steve Jobs (2015) also were financial losers as part of Legendary's distribution arrangement with Universal Pictures.

Increased P&A costs could be attributed, in part, to the forthcoming release of Duncan Jones' $100 million-plus Warcraft, which is set for release in June. Legendary also wrapped production late last year on the $160 million China-U.S. co-production The Great Wall, which stars Matt Damon and Andy Lau, features English and Chinese dialog and is due out in 2017. The high-profile project is being closely watched as a test case for the viability of Chinese-themed global tentpoles.

While the losses are substantial, the numbers don't necessarily suggest that Wanda's chairman Wang got a bum deal in the acquisition, analysts say. The more common measure for valuations of media companies engaged in production activities is an EBITDA number (earnings before interest, taxes, depreciation and amortization), as it provides a clearer picture of operating performance. Other factors commonly considered are revenue multiples, distribution agreements, upcoming film slates, intellectual property pipeline, premium for control, along with other intangibles such as brand names and position in the market.

"Not only are all of those factors things Wanda considered in their acquisition, but they are factors that Wanda would want to be present in one way or another when they not only identified Legendary as a target but decided to proceed with the transaction," says Peter Schloss, managing partner of CastleHill Partners, a Beijing-based merchant bank specializing in the media and sports industries.

The documents reveal that Legendary's $3.5 billion price tag was 7.5x its 2015 revenue of $462.1 million (the next best measure since EBITDA numbers weren't disclosed) — "possibly on the high side, but not unreasonable," Schloss says.

The Wanda filing document also forecasts Legendary's combined net profits for 2016-2018 will be $474.8 million (RMB 3.1 billion). Net profit projections of this kind are unusual in the U.S. business community. Its inclusion was most likely a filing requirement under Shenzhen Stock Exchange rules.

According to financial sources familiar with Chinese to U.S. accounting calculations, Wanda's net profit forecast translates to approximately $640 million EBITDA for 2016-2018.

Wanda and Legendary have both declined to comment.

[GeneChing]

Hold the phone...Wanda?

Sources: Two groups post bids in $4.1 billion range to buy UFC
Jun 17, 2016
Darren Rovell ESPN Senior Writer

Bidding to buy the UFC is drawing closer to an end, sources told ESPN on Thursday.

The two bidding groups -- WME-IMG in conjunction with Dalian Wanda Group, and China Media Capital -- had similar bids in the $4.1 billion range, sources said.

Sources said that both bidding groups are still trying to completely finance the buyout, which would be for the entire company. Which company ultimately wins out might depend on the details of that financing. Sources say WME co-chair Ari Emanuel has been asking well-heeled investors to chip in between $25 million and $50 million.

One of those investors that said yes, according to sources, was the Kraft Group, which owns the New England Patriots and the New England Revolution. A Kraft Group spokesman declined comment.

The WME-IMG bid with Dalian is also said to include China's Tencent Holdings, one of the 10 largest internet companies in the world and ESPN's official digital partner in the region. State-backed investment firm China Media Capital has been bankrolling many projects, including a five-year broadcast-rights deal with China's top-tier soccer league worth $1.3 billion.

Reached Thursday, UFC president Dana White said he had no comment.

Last month, ESPN reported that the entire UFC organization was actively up for sale and that bids were in the $3.5 billion to $4 billion range.

At the time, White denied that Zuffa, which bought the UFC for $2 million in 2001, was in an active bidding process.

Sources say that although White denied details of the sale publicly, the UFC forced partners to sign more extensive confidentiality agreements after the leak.

Zuffa, a company set up by brothers Lorenzo and Frank Fertitta, owns about 80 percent of the venture, and Abu Dhabi's Flash Entertainment bought a 10 percent piece for an undisclosed sum in 2010. White, who is expected to be asked to stay in some capacity should a sale go through, also has a share.

While the UFC has developed into quite a business, with a rights deal on the horizon that could very well double to more than $200 million a year beginning in 2019, the business is volatile. The UFC has kept its financial cards close to its vest, but Lorenzo Fertitta told CNN that the business grossed about $600 million last year.

The UFC is undoubtedly coming off its best year thanks to the emergence of Conor McGregor and Ronda Rousey, but the return of Rousey -- who is represented by WME-IMG -- is uncertain, and both fighters are facing the prospect of their second losses in as many bouts. With both out for UFC 200, the brand was forced to make a big move to ensure that the event had some shine. It worked with Brock Lesnar to set up his one-off return to the Octagon despite his WWE contract.

Dalian Wanda has recently invested in more sports properties. Last year, it bought a 20 percent stake in soccer superpower Atletico Madrid for $48 million. In March, the company became a top-tier FIFA sponsor through 2030.

[GeneChing]

I copied the post above across two other threads. Now I gotta copy this one too.

JUN 21, 2016 @ 03:17 PM 6,236 VIEWS The Little Black Book of Billionaire Secrets
Despite Reports, Billionaire Fertitta Brothers' UFC Isn't Being Sold, Company Insists
Noah Kirsch , CONTRIBUTOR
I write about the 1% that sits on top of the world.

Opinions expressed by Forbes Contributors are their own.


UFC owners, from left, Frank Fertitta III, Dana White and Lorenzo Fertitta. (AP Photo/Eric Jamison)

The Ultimate Fighting Championship isn’t going anywhere– at least not for now.

Yesterday, the reported sale of the mixed martial arts promoter made waves across the MMA online community. The deal, reportedly led by two Chinese billionaire-helmed investment groups, was rumored to be worth $4.2 billion dollars.

Those accounts now appear to be untrue.

“[The] report indicating that the UFC has been sold is false. We’ve communicated that to our staff members via an internal memo,” a spokeswoman for the UFC told this reporter.

Speculations about a potential deal have been circulating for months. In May, UFC President Dana White denied that the organization was in “advanced” talks to be purchased, telling the Las Vegas Review-Journal that “The UFC [was] not for sale.” At the time, the bidders involved in the negotiations were reported to be WME/IMG, The Blackstone Group, and two Chinese investors, billionaire Wang Jianlin’s Dalian Wanda Group and China Media Capital. Dalian Wanda, along with another Chinese conglomerate, Tencent Holdings (headed by billionaire Ma Huateng, known as Pony Ma) was said to lead Monday’s purported sale.

The Ultimate Fighting Championship is wholly owned by Zuffa, a company founded by billionaire brothers Frank and Lorenzo Fertitta. The casino magnates purchased the UFC, then on the verge of bankruptcy, for $2 million in 2001. Since then, mixed martial arts has become one of the fastest growing sectors in professional sports, and the promoter’s fights are now broadcast to over 1 billion homes in 149 different countries.

That growth has not come without a cost. As FORBES wrote last week, Zuffa holds $475 million in debt obligations, which both Moody’s and Standard & Poor’s have rated “non-investment grade”–otherwise known as junk bonds. Those liabilities prompted the initial speculation that Zuffa, which is principally owned by the Fertitta brothers, alongside minority stakeholders Dana White and Flash Entertainment, was willing to sell.

For now, the UFC, which took in an estimated $600 million in 2015 revenue, is staying put. The rumors, however, are certain to persist.

[GeneChing]

...or maybe they'll collapse under their own weight, like the megabook stores killed the book industry, and everything will shift to home entertainment.

AMC Entertainment to Buy Europe’s Biggest Theater Chain for $1.2 Billion
MOVIES | By Thom Geier on July 12, 2016 @ 4:29 am



AMC Theatres announced deal to acquire London-based Odeon & UCI Cinemas Group
China-controlled AMC Entertainment continues its global expansion, announcing plans on Tuesday to acquire Europe’s largest movie theater chain for $1.2 billion.
London-based Odeon & UCI Cinemas Group has been in the hands of Guy Hands’ Terra Firma private equity outfit.
AMC, which is also finalizing its acquisition of Georgia-based U.S. exhibitor Carmike, announced it would pay 75 percent in cash and 25 percent in stock for Odeon. The companies expect to complete the deal by the end of the year.
Odeon & UCI oversee 242 theaters and 2,236 screens, selling 90 million tickets annually, according to MarketWatch.
With the acquisitions, AMC’s holdings would include 627 theaters and 7,600-plus screens in eight countries.
“While we acknowledge that there are some uncertainties related to Brexit, we are encouraged that current currency rates are highly favorable to AMC with the pound falling to a three decade low versus the dollar,” AMC CEO Adam Aron said in a statement.
AMC Theatres is owned by the AMC Entertainment Group, a majority-owned subsidiary of China’s Dalian Wanda Group. Wanda Group already runs China’s largest exhibitor.
In March, AMC announced plans to acquire Carmike for roughly $1.1 billion in a deal that would create the world’s largest theater chain.
“AMC remains committed to moving forward with our plan to acquire Carmike Cinemas,” Aron said Tuesday.
But Aron repeated his warning from June 30 that the Carmike deal was “at considerable risk.”
“Some Carmike shareholders have an unrealistic view as to Carmike’s value to AMC, and their resulting price expectations are simply beyond what AMC believes is prudent to pay,” he said.

[GeneChing]

Interesting play. Makes sense...dollars and cents...or maybe I should say yuan.

Here's Why Paramount Needs the Wanda Deal
As the Chinese film market continues to grow, Paramount risks getting left behind. This deal may be a lifeline.
Buster Coen Jul 14, 2016 4:52 PM EDT



On Thursday morning, the news broke that China's Dalian Wanda Group Co. was in talks with Viacom (VIAB) to buy a 49% minority stake in Paramount Pictures. Given the Viacom soap opera that has seen majority share owner Sumner Redstone and CEO Phillippe Dauman struggle for control of the company, the deal is far from a sure thing, but it would be a boon for Paramount were it to go through.

That's because Wanda has strong ties to the Chinese movie industry, which has been expanding at a breakneck pace over the course of the past five years. The conglomerate owns Wanda Cinemas, China's main cinema operator, and Legendary Entertainment, the studio behind huge Middle Kingdom hits such as "Pacific Rim" and "Warcraft." Were Paramount to become partially owned by Wanda, it would have a huge conglomerate invested in the success of its movies in what is soon to be the world's largest film market.

"If you have an outpost in the country where you're going to do the biggest business, you can really mold that movie, both on the creative side and the marketing side, to get a bigger bang for your buck in China," says ComScore (SCOR) analyst Paul Dergarabedian.

A partnership between Paramount and Wanda would also facilitate the process of securing Chinese releases for the studio's films. China allows just 34 non-Chinese films to be released every year, and when a studio does get a release in the Middle Kingdom for one of its films, it typically only sees 25% of the movie's box office returns there. Allowing Wanda to buy a stake in Paramount could begin to solve both problems.

"The deal would allow more foreign films to bypass Chinese censors, plus ease various market restrictions like box office revenue splits," says Shawn Robbins, senior analyst at BoxOffice.com.

The hypothetical stake purchase would certainly have an effect on the accessibility of content, but could it also affect the content itself? A stake purchase by Wanda would not necessarily be likely to alter the creative vision of Paramount, but studios have increasingly been producing content with Chinese audiences in mind anyways. A deal with Wanda may accelerate that process, and assist in maximizing the outreach of Paramount films.

Take Legendary Entertainment, which was acquired by Wanda back in April. The studio released "Warcraft" to record-breaking box office results in China, aided by Wanda Cinema Line, which fully supported the movie in its theaters. Wanda also arranged for promotional seat covers which allowed moviegoers to choose the side of the Horde or the Alliance, the two groups at war in the "Warcraft" film. If it weren't for Chinese box office returns, the movie would have been a huge dud, which speaks to the power of having a conglomerate like Wanda behind one's back in the Middle Kingdom.

And indeed, the studio's upcoming movies seem primed to make bank in China. "Legendary's upcoming release slate is well suited for major Asian markets," Robbins says. He points out that the studio has three Godzilla-related movies in the pipeline, as well as an American-Chinese 3D fantasy film about the Great Wall of China. And if Legendary can successfully land the rights to a Pokemon film--well, there's no telling how high the box office might go with the help of Wanda.

Paramount could reap the same benefits that Legendary has if its shareholders accept the deal. The box office results speak for themselves; China is where studios now need to be looking for revenue, and a deal with Wanda could give Paramount the leg-up on the competition that it desperately needs.

"For a Chinese company to buy a huge stake in an iconic Paramount--it tells you where the money is," says Dergarabedian. "It's all about the growth in China." If Viacom shareholders cannot realize that, they may just be digging their own graves.

[GeneChing]

JUL 25, 2016 @ 08:17 AM The Little Black Book of Billionaire Secrets
AMC Theatres Ups Takeover Bid For Carmike Cinemas To $1.2 Billion
Natalie Robehmed
FORBES STAFF
I cover media and entertainment.


China’s richest man Wang Jianlin, who controls AMC, is hoping to soon count Carmike among his cinematic real estate (Photo credit: David Yellin for Forbes)

AMC Theatres, which had previously agreed to acquire Carmike Cinemas for $1.1 billion, has sweetened its offer by 10% to $1.2 billion after Carmike shareholders opposed the low pricetag.

AMC Theatres, owned by China’s richest man Wang Jianlin, will now hope to acquire the nation’s fourth-largest exhibitor in a $1.2 billion cash and stock deal inclusive of debt, Carmike said Monday. The merger will form the country’s largest chain with over 600 theaters in the most recent acquisition of a U.S. company by a Chinese-owned business.

The transaction will give Carmike’s stockholders the option to choose between $33.06 in cash per share or 1.0819 shares of AMC’s Class A common stock, a premium of some 32% over Carmike’s closing March 3 stock price (the last trading day prior to Carmike/AMC’s original agreement). The hefty pricetag comes for $585 million in cash and $250 million in AMC’s Class A common stock to be paid to Carmike shareholders plus net debt.

“The revised merger agreement provides significant additional value to Carmike stockholders and enables our stockholders to now participate in the potential upside of a combined AMC-Carmike,” said Carmike CEO David Passman. “Our Board unanimously believes that this transaction is… in the best interest of all Carmike stockholders.”

It marks a 10.2% increase of AMC’s original all-cash offer of $30 a share, which was originally agreed upon in March. Carmike’s largest shareholders, investment firms Mittleman Brothers and Driehaus Capital Management, said the original price was too low. Some thought a value of $40 a share was more equitable.

“This latest agreement between AMC and Carmike is our best and final offer for Carmike,” said AMC CEO Adam Aron.

Carmike Cinemas Inc. (CKEC) Stock Price

Carmike shareholders were scheduled to vote on a transaction this morning; the increased bid means it will postpone the vote.

The acquisition is the latest in a string for Wang’s Dalian Wanda Group, which purchased AMC Cinemas in 2012 for $2.6 billion. The real estate and media conglomerate in 2015 acquired the Australian cinema chain Hoyts Group for $344 million. This year, it snapped up Hollywood co-financing-turned-producing outfit Legendary Entertainment in a $3.5 billion deal and is thought to be one of the leading bidders in a minority stake in Viacom's VIAB -0.36% Paramount. AMC agreed earlier in July to acquire U.K. cinema chain Odeon & UCI Cinemas Group for $1.2 billion (£921 million) net debt, taking prime advantage of favorable exchange rates on the weaker British pound post-Brexit.

When its Odeon & UCI Cinemas Group deal closes, AMC will be the largest film exhibitor in the world; finalizing its acquisition of Carmike will only strengthen that monopoly.

Pending antitrust approval and sign off from Carmike shareholders, the deal is expected to close by the end of the year.

If this goes through, what cinemas won't be owned by Wanda?

[GeneChing]

Big news on Wanda today. This is #1 of 3.

Wanda Scraps $5.6B Plan to Merge Legendary With Other Movie Assets
9:47 AM PDT 8/1/2016 by Patrick Brzeski


Thomas Tull (left), Wang Jianlin
Jeffrey Mayer/WireImage/Tomohiro Ohsumi/Bloomberg via Getty Images

The company said that Legendary must prove that it can earn a profit on its own before a planned merger of its movie businesses can go forward.
Dalian Wanda Group, the Chinese real estate and investment conglomerate headed by China's richest man, Wang Jianlin, has abandoned its plan to fold Legendary Entertainment into the group's publicly listed movie theater subsidiary.

In April, Wanda Group announced that it would merge Legendary and Chinese movie-production subsidiary Wanda Media with its publicly listed movie theater chain business, Wanda Cinema Line Co. But in a regulatory filing with the Shenzhen stock exchange Monday, Wanda Cinema said that market conditions had changed and the deal was premature. A deal at this time wouldn’t be in the best interest of minority investors, it added.

The company said that Legendary, which it acquired for $3.5 billion in January, should show its ability to turn a profit on its own prior to a merger. The Hollywood Reporter reported in May that Legendary had lost over $500 million in 2015. In Monday's statement, Wanda reiterated its expectation that Legendary would become profitable this year.

The company said it may reconsider the restructuring plan again in 2017. It will hold an investor presentation later in the week to clarify its plans.

[GeneChing]

#2 of 3 for today

AMC Has Bright Future Despite Earnings Miss
The theater chain, which is a subsidiary of China's Wanda Group, had a tough quarter but is looking good for the future.
Buster Coen Buster Coen Follow Aug 1, 2016 4:02 PM EDT



Earnings from AMC's (AMC) Q2 missed Wall Street expectations on Monday morning, as the entertainment company, which is a subsidiary of China's Wanda Group, reported revenue of $764 million, down 7% year-over-year. The company also reported diluted earnings per share of 24 cents, down 47% from the 45 cents EPS last year.

As TheStreet predicted back in June, flagging movie attendance was mostly to blame for the poor showing. Admissions revenue was down 10% to $481.2 million on attendance of 50 million. Several movies performed below industry expectations, including, "Neighbors 2," "Alice Through the Looking Glass," "Teenage Mutant Ninja Turtles: Out of the Shadows," and "Independence Day: Resurgence."

All of those movies are sequels, and their underperformance is indicative of a tough landscape for franchise fare. Exhibitors like AMC have good reason to be nervous about the disappointing results for these films, as sequels have typically taken in the largest box office numbers in the modern era.

However, investors likely have no reason to worry. The Q3 film slate looks to be more promising for the company, as "The Secret Life of Pets" has already overperformed and "Suicide Squad" looks to break out next weekend. And as has been reported here at TheStreet, AMC is undertaking a series of premium moviegoing initiatives that are bound to pad its earnings in the future.

What's more, AMC has been in the acquisitions business lately. The theater chain recently made a deal to absorb Odeon and UCI Cinema Group, Europe's largest theater chain. And AMC recently upped its offer to acquire Carmike Cinemas to $1.2 billion, which Carmike shareholders will likely find hard to reject.

[GeneChing]

That's a lot of lateral movement for Wanda. Something's afoot perhaps?

China’s Wanda Teams With RealD to Add 4,000 New 3D Screens
MOVIES | By Matt Pressberg on August 1, 2016 @ 4:42 pm


Dalian Wanda

China’s largest theater chain will have at least 5,600 RealD screens
China’s Wanda Cinema Line, the country’s biggest theater chain, and 3D technology firm RealD announced Monday that they have agreed on the largest 3D installation in the history of the format, which will add at least 4,000 new RealD screens to Wanda’s multiplexes.
Wanda Cinema Line currently operates 320 theaters and 2,789 screens, mostly in China, but also in major cities in Australia and New Zealand. Wanda has 1,600 screens already equipped with RealD technology and the new deal will bring that up to a minimum of 5,600.
“As audiences throughout China continue to seek more and more 3D content, Wanda is investing in the very best systems and technology that allow for the highest quality presentation of 3D movies,” Wanda Cinema Line executive president Xiaobin Liu said in a statement announcing the deal. “Our RealD equipped theaters have been a significant part of our growth strategy and we are pleased to expand our partnership with RealD with this history making installation agreement.”
Also Read: Dalian Wanda Exploring Paramount Minority Stake Purchase for Billions
“China has steadily become the world’s most significant 3D market and the scale of this installation agreement signals an unprecedented commitment to the growth of 3D in this critically important entertainment region,” RealD CEO Michael V. Lewis said in the statement.
Wanda’s RealD deal is the latest move by the exhibitor to deepen its relationships with the biggest names — and biggest screens — in theater technology as it competes for a rapidly growing audience in what could be the world’s biggest box office as soon as 2017.
Wanda is the world’s No. 1 IMAX customer and is responsible for 16 percent of its global revenue. IMAX is expected to add 115 screens in China alone this year (there were only 1,061 worldwide at the beginning of the year), with 60 of them slated for Wanda theaters.
Wanda also signed a deal with Dolby Labs in January to install 100 of its premium-format Dolby Cinema theaters in China over the next five years.
And the competition is arming itself as well — late last year, Wanda rival China Film Group opened its first Barco Escape theater, a three-screen format that gives the audience an immersive, ****pit-style view of the action.

[GeneChing]

Tue Aug 23, 2016 1:18pm EDT
Exclusive: China's richest man set to seal two billion-dollar U.S. film deals
By Matthew Miller and Shu Zhang | BEIJING

Real estate and entertainment conglomerate Dalian Wanda Group Co expects to seal two billion-dollar film-related deals in the United States this year, chairman Wang Jianlin said on Tuesday, as China's richest man steps up his push into Hollywood.

After completing the acquisition of two non-production film companies - each worth above $1 billion - Dalian Wanda's next target would be a so-called "Big Six" movie studio, Wang told Reuters in an exclusive interview.

"My goal is to buy Hollywood companies and bring their technology and capability to China," Wang said.

He declined to elaborate on the two deals in the pipeline, which would further bolster Wanda's motion picture empire.

In January, Wang splashed $3.5 billion to buy a controlling stake in U.S. film studio Legendary Entertainment, behind hits such as "Jurassic World", making Wanda the first Chinese firm to own a major Hollywood studio.

Dalian Wanda, which was added to the Fortune Global 500 list this year, aims to triple revenue from its cultural division, led by entertainment, sports and tourism, to 150 billion yuan ($22.6 billion) by 2020.

Reuters reported last month that Wanda has held talks with Viacom Inc (VIAB.O) about acquiring its stake in Paramount Pictures, one of Hollywood's "Big Six" studios that also include Twentieth Century Fox (FOXA.O), Warner Brothers (TWX.N), Walt Disney (DIS.N), Universal Pictures (CMCSA.O) and Columbia (6758.T).

"We are interested not only in Paramount, but all of them. If one of the Big Six would be willing to be sold to us, we would be interested," Wang said.

"Only the six are real global film companies, while the rest are not. If we are to build a real movie empire, this is a necessary step."

Wang Jianlin, chairman of the Wanda Group, poses for pictures after an interview in Beijing, China, August 23, 2016. REUTERS/Thomas Peter

Dalian Wanda is leading a slew of Chinese firms that are investing in Hollywood. They include Fosun International, which has invested in Studio 8, a production company started by former Warner Brothers executive Jeff Robinov, and Huayi Brothers Media Corp (300027.SZ), which is producing films with STX Entertainment, a studio invested in by Chinese private equity company Hony Capital.

Dalian Wanda would also start co-investing in global blockbusters next year, Wang added.

A SCREEN NEAR YOU

The Chinese conglomerate, which began as a property developer in the northeastern city of Dalian, was also looking to extend the world's biggest motion picture theater network, Wang said.

Following the completion of its acquisitions of London-based Odeon & UCI Cinemas Group and Carmike Cinemas Inc (CKEC.O) in the United States, Dalian Wanda would control 15 percent of global box office revenues, Wang said, and may reach its goal of controlling 20 percent earlier than its target of 2020.

Wang, who has also bought Swiss sports marketing firm Infront Sports & Media AG and World Triathlon Corp, owner of the "Ironman" franchise, said he was primarily interested in acquiring entertainment and sports companies in the United States and Europe.

"If the target company fits our appetite, there is no upper limit for budgeting," he said.

But he cautioned that too many investors were rushing into the "hot" film market.

"Most of the money invested in China, and even the global film industry, is silly money. Only a little is smart money," he said.

"As China's film industry growth slows to below 20 percent, or even 10 percent, 8 percent this year, some will be washed out. It's like Warren Buffett said, 'you only find out who is swimming naked when the tide goes out'."

IPO OR BACKDOOR LISTING

Separately, Wang said that Dalian Wanda Commercial Properties Co (3699.HK), Wanda's real estate flagship, would re-list on the Shanghai stock exchange either through an initial public offering (IPO) or a backdoor listing.

Shareholders of the Hong Kong-listed firm last week approved a buy-out offer that would see the firm privatized.

The company said earlier this month it planned to de-list from the Hong Kong stock exchange on Sept. 20.

Wang said both options were on the table for the planned Shanghai re-listing. Approval for an IPO could take two or three years, while a backdoor listing would require more than a year, he added.

Mainland-listed firms typically command higher valuations than those traded in Hong Kong, helped by a large pool of retail investors.

But Wang said the "core problem" that triggered the de-listing plan was not the low valuation of the company's Hong Kong shares, but the lack of liquidity.

"We only listed 14 percent of the company in Hong Kong, which means 86 percent of shares are neither liquid nor could be pledged as collateral," Wang said. "That's not a real listed company."

($1 = 6.6533 Chinese yuan renminbi)

There's a vid too, if you follow the link.

[GeneChing]

A: World domination, obviously.

What Is Fueling Wanda’s Hollywood Dealmaking?
Patrick Frater
Asia Bureau Chief


PHOTO BY GERRY SHIH/AP/REX/SHUTTERSTOCK
AUGUST 24, 2016 | 06:55PM PT

Wang Jianlin, the 64 year-old chairman of China’s Dalian Wanda group, is in too much of a hurry to worry about having his corporate wrist slapped by regulators over a shelved plan to absorb Legendary Entertainment into Wanda Pictures.

Wanda announced its $3.5 billion acquisition of Legendary in January and immediately set about refinancing the group’s film unit through restructurings and select share sales to a couple of dozen corporate and institutional investors. With Legendary as the Hollywood allure at its core, the unit was attributed a valuation of $5.7 billion.

That it didn’t meet with approval from the CSRC in July was a blow, but not one that has blown Wanda off its financial track or dulled Wang’s desire to expand further – much further — in the movie industry.

This week Wang spelled out clearer than any Chinese businessman has ever done previously, that he wants of own one of Hollywood’s big six studios. In an interview with Reuters, he described the six MPA members as the “only real film companies” in the world and that owning one would be a “necessary step” in his ambition to build a real movie empire.

But even that will not be enough. Shining some light on his upcoming deal pipeline, Wang said that this year would also see Wanda involved in two other deals each worth $1 billion involving Hollywood companies.

Sources close to Wang, who were not authorized to speak on behalf of the group, say that Wanda is looking for strategic deals, not ones that are only grounded on financial reasons. Target firms will likely own or control significant intellectual property and have the potential to be scaled up to become global players.

That makes U.S. enterprises a priority. And Wang’s commitment to stateside expansion is said to be for the long term. Wanda’s controversial Beverly Hills headquarters project may be a tangible sign of the scale of Wang’s U.S. goals.

Target companies will likely be required to have expertise or assets that can flow back to China and benefit the emerging industries that serve the country’s growing middle classes. Lifestyle demands for entertainment, leisure travel and healthcare are ballooning.

In the near term, Wang is said to favor film and sports corporations over TV. But media technology, location based entertainment and Internet companies could also be on the agenda.

He makes that case that the rise of China — and the rise of China’s box office in particular – has been of benefit to Hollywood. It represented a new market opportunity that opened up at a time when home entertainment and pay-TV markets were weakening in North American, and Europe was stagnating. Wanda’s deal making is expected to reflect that.

Wang, who is always groomed and business smart, sometime appears to let his hair down and let slip a loose-lipped boast. But such apparent slip-ups may also be well-calculated devices to shake out more deal targets and to bring in more partners. Or simply they may be uttered to keep his gigantic group looking like it is going forward as nimbly as a younger, smaller player.

Those close to Wang say he is determined to transform Wanda from unsexy property developer into the world’s largest media-entertainment-leisure conglomerate. His detractors say that the cultural industry expansion is camouflage for activities that are still property plays at base.

His studio-film festival center at Qingdao may be an example. It is possible that his bid for the land may not have emerged as winner had Wanda not pitched the coastal city a cultural plan rather than, say, office blocks or an industrial park. The studios are scheduled to open in 2017, but some apartment blocks have already been completed and sold off.

Similarly, Wanda’s multiplexes undoubtedly drive footfalls into the company’s Wanda Plaza malls in China. It opened two more malls this month.

Wang sees no contradiction. Hotels, theme parks and movie studios need sound project management skills and the large amounts of capital that asset-rich property companies can provide.

What Wang is openly trying to do is make his assets go further. He has called it “asset light” development. That means bringing in partner financiers and also diversifying into areas that require fewer tangible assets.

In the past two years that has brought the Legendary deal, but also acquisitions of Philippe Blatter’s Infront sports marketing firm and the World Triathlon Corporation, organizer of the Ironman competitions.

The next round of deals may show how far Wanda is willing to stray from its roots.

[GeneChing]

Wonder what Wanda's theme will be? The diversification-away-from-hard-core-property-development rollercoaster?

China’s Wanda to Build $9 Billion Theme Park
Patrick Frater
Asia Bureau Chief


COURTESY OF DALIAN WANDA
AUGUST 26, 2016 | 06:50AM PT

Dalian Wanda group Friday signed a co-development deal to build a theme park costing $9.4 billion (RMB63 billion) in the northern Chinese city of Jinan. The deal was signed with the government of the city, the capital of Shandong Province.

It will Wanda’s first park with a dominant sports theme and include a 10,000-seater ice hockey cum basketball stadium. Other facilities include a Wanda Mall, an outdoor theme park, a hotel cluster, large stage show and a bar street.

Jinan Wanda City is planned to break ground in 2017 and start operation in 202. The company said that it is expected to receive over 20 million tourists per year, create 20,000 jobs and generate large tax revenue for the local government. The park would be Wanda’s 13th city park out of a planned 15 locations.

Earlier this year Wanda’s chairman Wang Jianlin taunted Walt Disney’s Shanghai Disney Resort, suggesting that it was too highly priced and that it would be overtaken by his ‘wolf pack’ of parks. Shortly after, Wanda’s parks initiatives took a dent when it temporarily closed its indoor theme park in Wuhan after less than two years of operation.

Diversification away from hard core property development is a major theme for the group that has expanded into entertainment and leisure through its own developments as well as through acquisitions including Legendary Entertainment and European cinema chain Odeon / UCI.

On Thursday Wanda chairman Wang Jianlin was the final, keynote speaker at a high powered retail convention in Beijing. As well as giving a second wind to Wanda’s own e-commerce platform Ffan.com, Wang urged the industry and the Chinese government to help encourage Chinese consumers to do more of their shopping at home.