Pretty soon your clothes, furniture, and basic plastic tchotchkes won’t be the only things bearing the ‘Made In China’ brand. Dalian Wanda’s chairman Wang Jianlin (China’s wealthiest man) has been making big statements about his desires to own a studio. Wang says, “My goal is to buy Hollywood companies and bring their technology and capability to China.” This isn’t just one studio either, by Wang’s own account, he’s interested in having a slice from each of the big six in Hollywood.
The beginning of 2016 started with Wanda group acquiring Legendary Entertainment in January. A reported $3.5 Billion deal paired with the seizing of a 51% stake of Omnigon, a consulting firm that helps sports media and entertainment providers to develop mobile apps and websites. Following that, a deal with AMC Theaters for a 75% stake. Then most recently, in July, Wanda acquired Mtime, a Chinese equivalent of Netflix, adding an online distribution platform to a growing list of assets.
Later this year, Wang expects his entertainment and real estate conglomerates to seal the deal on two film related contracts in the US. Both of which are valued at more than $1 Billion each. The Dalian Wanda Group is also in talks with Viacom for a 49% stake in Paramount Pictures.
Wall Street, however, has been skeptical about the finalization of the deal due to a previous statement from Paramount’s largest shareholder that opposes a sale to the Chinese company. Outgoing CEO Philippe Dauman has been authorized to continue exploring the sale, but a proposed Paramount investment will still be subject to the Viacom board’s approval. Dauman is required to provide a status update on the deal by September 7.
All of this has deep and resounding humor when you consider the facts. One, Hollywood is not doing well; a generation’s stranglehold on media has led to a summer of big budget flops. Two, China has been trying for almost a decade to create an international audience for Chinese films and has yet to find a blockbuster formula. Three, Wanda thinks that through market consolidation and silly amounts of money it can buy the Hollywood pipeline and repurpose it for their own media agenda; when really, it’ll end up with more of the same—which is to say a decline in profits. Why would Wanda think, after failing to do better than the Hollywood system for years, that by buying into it (when it’s clearly on a decline) they would be the ones to be able to fix this clear downward trend? One things for sure, they should be careful they’re not trying to make a silk purse out of a sow’s ear.