Wanda acquires Legendary Pictures for 3 billion

[terry78]

http://www.comingsoon.net/movies/news/646683-wanda-acquires-legendary-entertainment-for-3-5-billion

Huh.

 

[DarthSkywalker]

What does this do for Pacific Rim 2?

 

[Doctor Jones]

Yesterday Del Toro tweeted it isn't dead yet but this might change things. Actually since Pacific Rim did better overseas you'd think this would make it fare better?

 

[Fallen Angel]

It does nothing. Wanda have bought them but Thomas Tull is still in charge of day to day running and he has minor shares in the new business.

 

[Gabe99]

Say What, Wanda? The Fuzzy Math Behind the $3.5B Legendary Purchase
The Chinese conglomerate is trying to pump up the studio's image by highlighting films like 'King Kong,' but will Chinese investors snap up stock in a public offering?

With the hiring of Mary Parent as vice chair of worldwide production at Legendary Entertainment, China's Dalian Wanda Group has added some steak to the sizzle of the company it acquired in January for $3.5 billion. Or at least that's the number widely reported. Like much about the deal, the reality of that figure is far from clear.

What does seem clear is that Wanda bought out such other Legendary investors as Japan's SoftBank for a big number, but many Hollywood insiders with ties to China believe it doesn't matter if the price was high because Wanda expects to make an even bigger amount when it sells a company revolving around Legendary to the public. Wanda revealed March 14 that it will fold Thomas Tull's U.S. production-finance outfit and Wanda Pictures into its exhibition unit Wanda Cinema Line, which already has a stock listing on the Shenzhen stock exchange.

Industry skeptics say Parent adds substance to a concoction of uncertain nutritional value, but not enough to alter their perception of Wanda's intentions. "There are entities created because there are parties who will buy the stock," says one. "Do I think this is going to be a big studio pumping out movies? No."

When the Legendary acquisition was announced with a splash, Wanda's billionaire founder Wang Jianlin described his vision of creating a global entertainment company. Wanda then promptly set out to raise $1.5 billion in China for Wanda Pictures, valuing that company at a hefty $5.3 billion. As The Wall Street Journal reported, a document prepared in connection with that offering says Legendary was expected to contribute 73 per*cent of earnings and 80 percent of total revenue of Wanda Pictures. Investors who bought in were promised their shares would be bought back with 15 percent interest if Wanda Pictures had not gone public within a year. (Chinese real estate firm Oceanwide Holdings has disclosed an investment of $163 million.)

Given Legendary's mixed track record at the box office, those projections strike several industry insiders as overly optimistic. Given a real chance, Parent could improve the company's performance. But for now, skeptics think her primary purpose may be to improve optics as Wanda attempts to execute a stock listing for Legendary. One executive with a long history in China anticipates that as Wanda sells shares, Parent's "name will be everywhere, including every movie she's even breathed on." (Parent declined comment, as did Legendary and Wanda.)

Parent, 48, is the former co-president of Universal Pictures and co-CEO of MGM as well as the producer of ambitious projects from auteur filmmakers. One of Wanda's selling points could be that she is the Oscar-nominated producer of Alejandro G. Inarritu's The Revenant, which was over budget and in a world of trouble until she was hired midproduction. "Mary was a lifesaver at a time in the process when we absolutely needed her skill set," says New Regency Productions chief Brad Weston. "I needed someone who could work with the biggest talent in the world and who would do what was best for the movie."

Parent also guided Darren Aronofsky's Noah to success despite tensions between the filmmaker and Paramount; the movie grossed $363 million worldwide. "It sounds canned, but she is a superlative, all-around great executive," says Fox film co-chair Stacey Snider, who was Parent's boss at Universal. "She can source and develop material, she's got great taste, she understands the nuts and bolts of production and is able to put these movies on her back and drive them into the end zone."

Legendary founder Tull, 46, has been focused on making big-budget movies, but he could use help making them profitable. He's been successful in his role as a financier of other people's movies, such as Warner Bros.' The Dark Knight or Universal's Jurassic World. Tull has been accused in Hollywood of overstating his role in making those films, and Wanda is likely to work from the same script, selling Wanda Pictures to the public as if it owned those movies outright.

But several of Legendary's own films, including 2015's Blackhat, Seventh Son and Crimson Peak, all failed for distributor Universal, leading to enormous losses. It happens that Parent produced the only major Legendary-made film that really worked (Godzilla grossed $529 million in 2014) and the only other one that sort of worked (Pacific Rim made $411 million). She is producing Legendary's Kong: Skull Island, which is meant to launch three monster movies by Warners that will include a film pitting Godzilla against the ape.

Having Parent on board could help smooth over any problems with Legendary's next big-budget release, Warcraft, set to open in June. Many in the industry have doubts about the video-game-based film. But if it fails, Wanda can say it was made by previous management. Some observers think Legendary pushed another high-priced movie, Matt Damon's The Great Wall, from November into 2017 to delay more possible bad news.

Going forward, sources say Tull will continue to run Legendary as a unit within Wanda Pictures, along with Parent. Their boss is Jack Gao, a former Microsoft executive who now oversees Wanda's film operations. (Wanda separately owns the AMC cinema chain.) Having a boss is a new experience for Tull, note several observers.

Legendary says Parent also will run its TV division, tak*ing over for Bruce Rosenblum. Recent projects include USA's Colony (co-produced with Universal) and Netflix's series Love. How vibrant that business will be remains to be seen since it is acknowledged that the Chinese are interested in film but not TV. Shuttering the TV operation would require Legendary to write down any losses.

Despite doubts in Hollywood about Wanda's intentions for Legendary, Noble Coker — a former Hong Kong Disneyland exec who worked for Wanda for two years ending in June — says the deal may be about more than raising cash. Coker, who now teaches at USC, says with Wanda, "money is always at the forefront, but legitimacy, reputation, the learning process, integration with U.S. culture and U.S. organizations are also part of the picture." Even if Wanda Pictures were to fail, he adds, the attempt still brings prestige to Wanda "because you're the Chinese company that's trying to expand the influence of China around the world." And confidence in Wang runs so high among the Chinese public that Coker thinks a stock offering could succeed even in an increasingly difficult economy.

"A lot of people in China believe if he puts something up there, it's going to make money," says Coker. "If anyone can do it, he'll be able to do it. And if he can't, they'll say, 'We lost the money but look at what we learned from it. Wait a couple of years and try again.' "

 

[terry78]

So in their mind, it's a win either way.

 

[Gabe99]

Can Legendary Entertainment Bypass China's Film Quota System?

For the first time ever, a Chinese company — one headed by China's richest man, Wang Jianlin, no less — had come to own a U.S. film company that has backed several international blockbusters, with a track record that included hits like Godzilla, Pacific Rim and Jurassic World.
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Legendary's upcoming films, even if they flop spectacularly by Hollywood standards, are all but certain to make vastly more money in the international marketplace than Chinese films have in recent years. But classifying Legendary movies as Chinese only adds yet another layer of complication to the macro policy picture.

"On paper, this may allow them to say that 'Chinese' films are doing well overseas, but it's not clear how a movie like Jurassic World or Godzilla actually helps Chinese soft power," says Stanley Rosen, a professor of political science at the University of Southern California who studies China’s film industry. "It will seem like they are making a concession to Western culture, when their goals are to do just the opposite."

"The temptation would be to put more Chinese elements into the films, and get them approved as co-productions," Rosen explains.

"The danger there," he adds, "is whether they will still be successful globally — how much Chinese content can you put in there and still get the international market?"
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The studio's long gestating debut China co-prod, The Great Wall, is finally due for worldwide release on February 17, 2017 (it was originally slated for release on Nov. 23). Financed and produced by Legendary, Beijing-based LeVision Pictures and the state-backed film colossus, China Film Group, the big-budget fantasy action feature is directed by Zhang Yimou and stars Matt Damon, Willem Dafoe, Hong Kong's Andy Lau, Jing Tian, Luhan, Pedro Pascal and others. Set in the Northern Song Dynasty, the story explores a set of mysteries surrounding the Great Wall of China.

"The Great Wall will be a very important test case," Rosen says, "because it does have a lot of Chinese content — it features the Great Wall, a cherished symbol of China around the world — and it also has Hollywood actors, English dialog and the potential to be an international hit."
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And even if Legendary deems that adding too much China content to its tentpoles will hurt them globally — at least for now — there are plenty of additional ways in which Wanda will wield its heft and local savvy to the benefit of Legendary in the booming Chinese home market. For one, the conglomerate owns China's largest movie theater network, guaranteeing a big splash on a huge number of screens for any Legendary release. Wanda also owns one of China's largest distributors, Wuzhou Film Distribution, which will presumably work its relationships with China Film Group to secure desirable release dates and plenty of lead time for marketing Legendary's movies online and on the ground in China — something the Hollywood studios have long craved.

 

[Gabe99]

Variety: SEPTEMBER 26, 2013:

China’s Wanda Unveils Global Domination Plans

HONG KONG — China’s Dalian Wanda Group has unveiled plans to become one of the world’s biggest film companies.

At a glitzy ceremony in the port city of Qingdao, attended by top stars from China and Hollywood as well as senior Hollywood executives, Wanda chairman Wang Jianlin broke ground on a new mega studio. He also revealed alliances with Hollywood studios and announced a new film festival.

His $4.9 billion (RMB 30 billion) Qingdao Oriental Movie Metropolis will include 20 sound stages, including a 10,000 square meter studio complex, 19 smaller, related facilities and a theme park. It is set to open in 2017.

The 200 hectare Film Industry Park will also include several outdoor lots (in European, Ming & Qing dynasty Chinese and Middle Eastern styles), seven hotels, an indoor theme park, an IMAX research laboratory, a massive film exhibition unit capable of hosting a film festival, a film museum and waxworks, as well as a year-round automobile show and a yacht trading center.

Paying tribute to the financial firepower and ambitions of Wanda were Hollywood stars Leonardo DiCaprio, Nicole Kidman, Catherine Zeta-Jones, John Travolta, Kate Beckinsale, Ewan McGregor and Christoph Waltz. A-list Chinese stars included Zhang Ziyi, Jet Li, Tony Leung, Donnie Yen, Huang Xiaoming and Vicki Zhao. Senior U.S. execs included Weinstein Co. chairman Harvey Weinstein and Lionsgate motion picture bosses Rob Friedman and Patrick Wachsberger.

Wang, recently named by Forbes magazine as China’s richest man with an estimated fortune of $16 billion, said that China will have the world’s largest film industry by 2018. Wanda last year paid $2.6 billion to acquire U.S. cinema chain AMC and last week gave a gift of $20 million to the Academy of Motion Pictures and Sciences.

The company said that it had struck some 30 agreements with producers and talent agencies including to bring 30 foreign films and 100 local Chinese films per year to the new studio.

Wang said that the Qingdao International Film Festival will be held in the Metropolis’ exhibition area every September from 2016. It will be organized in co-operation with the Academy’s Cheryl Boone Isaacs, who was also in attendance, and China Film Group.

China already has some of the world’s largest studio complexes at Hengdian, a few hours outside Shanghai, and one of the most modern at Huairou, outside Beijing. Other studio complexes have been mooted at Tianjin and Wuxi.

 

[Gabe99]

China's Wanda Pictures Gets Investment From Financial Companies Puji, Jupai

The companires are looking to "capitalize on the burgeoning global media and entertainment industry as well as other high-growth sector companies that have cross-border attraction in China and [the] United States."

Chinese conglomerate Wanda's Wanda Pictures business has received an investment from investment firms Puji Capital and Jupai Holdings, the companies said Monday.

The firms in Hong Kong unveiled the launch of a joint venture "focused on strategic investments in high-growth sector companies in Greater China and [the] United States." Jupai and Puji said they would look to "capitalize on the burgeoning global media and entertainment industry as well as other high-growth sector companies that have cross-border attraction in China and [the] United States," such as the technology and consumer sectors."

The joint venture's "first strategic investment was into Wanda Pictures, which includes the conglomerate's media business, including global and domestic film and TV production, financing, and distribution," the companies said. In January, Wanda agreed to acquire Legendary Entertainment for $3.5 billion.

More to come...

 

[Gabe99]

Wanda Pictures Receives Investment From Puji and Jupai

Wanda Pictures, the film arm of Dalian Wanda Group, is to receive cash from two investment groups, Puji Capital and Chinese wealth management firm Jupai Holdings. The scale of the investment was not disclosed.

The two companies described the deal as a “joint venture” and the first joint investment in strategic high growth sector companies in China and the U.S.

“Puji will provides direct access to exclusive investment opportunities and strategic capital partners with Jupai’s trusted network of high net-worth individuals and rich experience in asset management. As of December 31, 2015, Jupai had $1.9 billion of total assets under management,” the companies said in a statement.

In January Wanda agreed a deal to acquire leading independent Hollywood producer Legendary Entertainment in a deal worth up to $3.5.

Since than Wanda has sought to use Legendary as a magnet for other finance. It is now busily restructuring its film assets and last week said that Legendary would be absorbed within Wanda Cinema Line previously the group’s Chinese movie theaters arm. Wanda Cinema shares have been suspended since February.

Puji has previously been involved in Wanda’s investment into Beijing Feng Hong Media and the company’s purchase of British luxury yacht manufacturer Sunseeker.

“Jupai is not only China’s leading wealth management companies but is a trusted brand alongside with the other blue chip cornerstone investors in Wanda,” said Alex Szeto, Director of Puji Media. “Wanda is already one of the biggest names in China and Hollywood and we look forward to a long-term relationship working more closely with them in all facets of their business – from media and entertainment to sports, technology, and lifestyle.”

 

[Gabe99]

China's Wanda Cinema to take over Legendary Pictures for $5.7 billion

Chinese tycoon Wang Jianlin's Wanda Cinema Line Corp (002739.SZ), the country's biggest cinemas operator, said on Thursday it plans to acquire movie-making affiliate Wanda Media for 37.2 billion yuan ($5.7 billion) in cash and shares.

Wanda Cinema, whose parent Dalian Wanda Group acquired U.S. film studio Legendary Entertainment in January for about $3.5 billion, said in a filing with the Shenzhen stock exchange that it now aims to acquire Wanda Media, the current owner of Legendary Pictures.

The company also said it plans to raise up to 8 billion yuan in a private placement of shares to help fund the building of theaters and replenish working capital.

"The completed transaction will help the listed company set a global strategy in consolidating film assets at home and abroad," it said.

In 2012 Dalian Wanda bought AMC Entertainment Holdings Inc (AMC.N), North America's second-largest cinema chain, for $2.6 billion.

Wanda Cinema's shares will remain suspended since a halt on February 24.

 

[Gabe99]

THR:
Wanda's Legendary Lost $500 Million in 2015, Chinese Filing Reveals
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 Jialin, 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 writedowns."

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. Writedowns 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.

 

[Tilapia]

So much to this... must sleep on it.

 

[mclay18]

Wanda Dalian is looking to make two billion dollar purchases of two 'non-production' film companies, with an eye towards acquiring one of the Major Six (WB, Sony, Fox, Universal, Disney, Paramount) in the future.

http://www.hollywoodreporter.com/news/chinas-wanda-planning-two-billion-921985

I think Paramount or Sony is fair game for acquisition.

 

[Octoberist]

Yeah, Comcast doesn't want to lose Universal (they've invested billions in building more attractions for Universal Studios) and I doubt Disney would say yes. It's too big of an entity.

WB I can't see happening.

But Paramount and Sony/Columbia have been lost for a while.

 

[Marvolo]

Wanda Dalian is looking to make two billion dollar purchases of two 'non-production' film companies, with an eye towards acquiring one of the Major Six (WB, Sony, Fox, Universal, Disney, Paramount) in the future.

http://www.hollywoodreporter.com/news/chinas-wanda-planning-two-billion-921985

I think Paramount or Sony is fair game for acquisition.

Frankly I don't want any Chinese conglomerate in charge of any of the big American studios. I hate when Hollywood productions pander to China in some stupid way. *cough*Iron Man 3*cough*

Tho based on this response to that article:

I doubt any of the "Big Six" can or will sell to the Dalian Group.

Sony - Japanese owned. Given current relations between China and Japan that is a non-starter right there with Japan not giving away one of its Golden Gooses to China.

Disney - The company is way more valued over Dalian by a mile and is a direct competitor to Disney. Dalian couldn't afford to buy Disney.

Paramount - Sumner Redstone made it clear he did not want to even sell 49% minority stake of Paramount to a foreign investor, let alone a Chinese company. With Dauman soon ousted the prospects are even less now.

Comcast/Universal - Even more valued over Disney. Not affordable for Dalian.

21st Century Fox/Fox - Not affordable. And I don't see the Murdochs selling to China.

Warner Bros/Time Warner - Once again, not affordable for Dalian to buy, along with strict takeover laws.

Dalian could have some success buying smaller studios such as Lionsgate, Weinstein & Co., MGM or maybe smaller studio chains within the Big Six (i.e. New Line Cinema, Focus Features) but an outright 100% buy of the one of the Big Six media conglomerates and their studios such as Disney (because Disney is what they really want)? It's highly unlikely.

And lastly, even if an acquisition of any of the Big Six did take place it would be met with a HUGE push back by regulatory and anti-trust authorities in the US, EU and other countries where a Chinese media conglomerate now owning the largest movie theater chains in the US, UK and other EU countries is now attempting to own a major US/global movie studio? Yeah, it would be rejected immediately.

Even major US and other global studios can't own major movie theater chains on top of being a major global studio at the same time.

Wanda's chances of buying one of the big American studios seems low.

 

[mclay18]

Wanda is in the process of finalizing a major co-financing deal with Sony Pictures, where they take a minority stake in certain Sony tentpoles with 'global appeal.'

http://deadline.com/2016/09/dalian-wanda-sony-pictures-slate-deal-1201823837/

I think this could lead up to a possible acquisition in the future.

 

[Gabe99]

Wanda is in the process of finalizing a major co-financing deal with Sony Pictures, where they take a minority stake in certain Sony tentpoles with 'global appeal.'

http://deadline.com/2016/09/dalian-wanda-sony-pictures-slate-deal-1201823837/

I think this could lead up to a possible acquisition in the future.

^Ghostbusters 2!

 

[harryoscop]

Spider-Man will be ruined. At that point i'd hope they sell the rights or Disney acquire Sony instead of them.

 

[chamber-music]

Wow I didn't know the Chinese backed out of co-financing the Ghostbusters reboot. I wonder why they did that? Perhaps it was tactical? The movie not doing well might of softened Sony up for a potential takeover as they are one of the major Hollywood studios that aren't doing all that great in recent years.

 

[mclay18]

Wow I didn't know the Chinese backed out of co-financing the Ghostbusters reboot. I wonder why they did that? Perhaps it was tactical? The movie not doing well might of softened Sony up for a potential takeover as they are one of the major Hollywood studios that aren't doing all that great in recent years.

No, that wasn't Wanda. That was Lone Star Capital, which was Sony's co-financing partner since 2014. That was the company that wiggled out of shouldering the losses from Ghostbusters.

That reminded me of Legendary opting out of WB and Village Roadshow's Edge of Tomorrow when it went into production.

 

[mclay18]

Spider-Man will be ruined. At that point, i'd hope they sell the rights or Disney acquire Sony instead of them.

I'm pretty sure Wanda's involvement with Spider-Man Homecoming is going to be limited. It'll probably be similar to the deal Universal inked with Perfect World Pictures (another Chinese film company), where they co-finance 25% of the film but no say in story or casting.

 

[Gabe99]

‘Passengers’ & ‘Jumanji’ Part Of Wanda-Sony Alliance

Sony Pictures and Dalian Wanda Group have announced in China and confirmed yesterday’s Deadline scoop that the China-based conglomerate will partner on numerous Sony tent poles with global appeal. (Release follows this update). On some films, Wanda will mainly provide marketing help in launching films in China, and on others, Wanda will provide between 10% to 15% in co-financing. Nothing is official, but sources say that several pictures are atop the list being discussed for this arrangement. They include the in-production reboot of Jumanji with Dwayne Johnson, Kevin Hart and Jack Black, and Passengers, the Morten Tyldum-directed sci-fi love story that stars Jennifer Lawrence and Chris Pratt. The other pictures I’ve heard is the new version of Smurfs, and Barbie. Reports that followed Deadline’s story claimed Spider-Man: Homecoming would be part of this deal aren’t exactly correct, as Wanda’s participation is limited to helping in a marketing capacity to launch the webslinger in China.

 

[Dr. Evil]

How big is Dwayne Johnson in China?

 

[Silvermoth]

Don't know. About 6 foot 8 or so