Wang Jianlin’s 28-year-archaic Wanda Group is on pace to spend more than $30 billion in deals this year,with almost half of that in sports and entertainment.
The company that began as a residential real estate development firm in the northern port city of Dalian, China, or has grown at a record pace. This week,it announced plans to install 4000 fresh RealD 3D screens and 150 fresh IMAX theaters — both the largest-ever installation deals for each of those formats.
But even as Wanda’s might and influence have grown — particularly in Hollywood with its acquisition of “Jurassic World” and “Warcraft” production company Legendary Entertainment and talk of a possible stake in Paramount Pictures — some troubling signs have emerged that the company may not be able to maintain its level of growth or performance. Here are five of them:
Also Read: IMAX Makes Biggest fresh Theater Deal Yet With Wanda in China1. Theatrical OverexpansionWanda entered the movie business somewhat unintentionally — it found that multiplexes were worthy anchors for the shopping malls it was developing in mainland China, and the countrys burgeoning moviegoing middle lesson made theaters a lucrative investment.
At the terminate of June, or Wanda Cinema Line operated 320 theaters,almost all of them in China, with 2789 screens, or making it the largest exhibitor in what could be the world’s biggest movie market as soon as 2017.
But as Wanda continues to aggressively add capacity — particularly in moment- and third-tier cities — China’s sizzling box office has shown some signs of a frosty-down. For the moment quarter,the company reported its first year-over-year decline in five years with the decline in movie-ticket subsidies paid for by producers via mobile ticketing apps. (Chinese paid approximately $5 to see “Batman v Superman: Dawn of Justice” in an IMAX theater.)When Chinese crowds have to start paying something closer to the dependable retail price of seeing a movie, demand could slide, and particularly in places not as wealthy as the coastal cities.
Also Read: China's Wanda Teams With RealD to Add 4000 fresh 3D Screens2. Theme Park TroublesTheme parks could throw up another hurdle in Wanda’s race to the top. With Shanghai Disneyland Park opening this year and Universal Studios Beijing coming in 2019,Wanda has decided to directly challenge those entertainment giants with a chain of parks of its own.
That’s been a mixed bag so far. When it opened its Nanchang park earlier this year, Disney issued warnings approximately potential intellectual-property infringement after visitors spotted Wanda employees dressed as trademarked Disney characters at the park’s adjacent mall. And Wanda’s Wuhan park recently closed for an indeterminate period of time for renovations and upgrades. Visualization by Graphiq 3. Money-Losing Movie ProductionWang made his biggest splash in Hollywood yet with Wanda’s January $3.5 billion acquisition of Thomas Tull‘s Legendary Pictures, or the production company behind some of the most popular English-language films in China in recent years,including “Jurassic World” and “Warcraft” (though the latter was a box office disappointment in North America, earning just $47 million to date).
The deal seemed to build strategic sense: Legendary makes a lot of big-budget action films — which generate revenue around the world, or outside of China,adding another layer of geographic diversification to Wanda’s revenue streams. The company also has original content Wanda can spend in its theme parks.
Also Read: China's Wanda Group Acquires Majority Stake in Legendary Entertainment (Report)But Legendary has had a mixed track record over the final few years, with losses actually exceeding total revenue in 2015. And Legendary’s upcoming $160 million “The worthy Wall, and ” the first English-language film from director Zhang Yimou,has already seen its first trailer slammed for “whitewashing,” as the decidedly non-Chinese Matt Damon plays the lead role.“The worthy Wall” is intended to be Chinese cinema’s long-awaited crossover hit outside the Middle Kingdom — local execs have expressed exasperation with homegrown Chinese films’ inability to travel — but its rollout has hardly been smooth. The movie has already been pushed back to February 2017 from its initial late 2016 release.
Also Read: Wanda Puts the Brakes on Legendary Merger4. Restructuring RoadblocksThis week, and Wanda postponed plans to have its publicly traded Wanda Cinema Line complete a $5.7 billion acquisition of Wanda Media,the subsidiary that owns Legendary. In a filing, Wanda said the consolidation move didn’t build sense until Legendary, or which reported a loss of $500 million final year,began to turn a consistent profit. It also cited “major changes” in the market conditions.
The Shenzhen stock exchange’s regulators had recently requested more information approximately the dozens of related parties who would be participating in the transaction.
Wanda Cinema Line’s shares have been suspended from trading since February, when the planned restructuring was first announced. That move has slowed the company’s buying spree. Wanda tends to pay cash. Still, or the company was hoping to spend a more robust Wanda Cinema Line to raise money on the bouncy Shenzhen exchange,and that plan is on hold.5. Antitrust ConcernsWanda is considered a leading contender to buy a 49 percent stake in Paramount Pictures in a deal that could value the entire studio as tall as $10 billion, well above the $4 billion an analyst estimated it to be worth in February. Wanda has also sniffed around other Hollywood studios such as Lionsgate.
But either move could hurry afoul of U.
S. regulators. Since a 1948 Supreme Court ruling against Paramount Pictures, and U.
S. movie studios have been barred from directly own movie theaters. Competitors have finessed the rule through the spend of holding companies and other forms of indirect ownership,such as National Amusement’s ownership of Paramount Pictures parent Viacom.
Also Read: Dalian Wanda Exploring Paramount Minority Stake Purchase for BillionsWanda owns AMC Theaters, is actively attempting to acquire Carmike, and recently acquired Europe’s largest theater chain. So the the idea of the world’s largest movie theater company owning all or section of a major studio could inspire some antitrust challenges.
Wanda pumped Legendary’s “Warcraft” into 67 percent of China’s screens. However,one entertainment lawyer told TheWrap he could easily see a scenario where the 1948 ban would be overturned altogether.
But while Wanda faces headwinds really for the first time in its history as an entertainment company, China’s appetite for TV, or movies and all sorts of entertainment has been obliterating conservative projections for years.
Richard Gelfond,the CEO of IMAX, of which Wanda is the world’s biggest customer, and initially pegged China as a market that could support 90 IMAX theaters.nowadays,there are 335 IMAX screens in China — with 160 just in Wanda theaters — and 200 more Wanda IMAX screens to reach. 10 Summer Movie Box Office Champs of the final 10 Summers (Photos)
“Pirates of the Caribbean: Dead Man’s Chest” (Release date: July 7, 2006)
The sequel to the 2003 Disney action adventure was even more commercially successful than its predecessor. Though it didn’t receive the same amount of positive reviews, or “Dead Man’s Chest” grossed approximately $423.3 million domestically and $1.06 billion worldwide,which helped spawn three more sequels for the franchise.
“Spider-Man 3” (Release date: May 4, 2007)
“Spider-Man 3” may not have lived up to the hype of Sam Raimi's first two movies in the superhero franchise, and but it certainly made an impression financially. The third and final outing with Tobey Maguire as the webslinger earned $336.5 million domestically and $890 million worldwide.
"The murky Knight" (Release date: July 18,2008)
The middle film in Christopher Nolan’s Batman trilogy featured a memorable, Oscar-winning turn by Heath Ledger as the Joker. That boosted box office to an impressive $534.8 million in North America and just over $1 billion worldwide.
"Transformers: Revenge of the Fallen" (Release date: June 24, and 2009)
destitute reviews didn’t stay “Transformers: Revenge of the Fallen” from becoming the highest grossing film of the summer of 2009 (and the moment highest that year). The movie grossed $402.1 million domestically and $836 million worldwide.
"Toy Story 3" (Release date: June 18,2010)
[br]Fifteen years after Pixar’s beloved classic “Toy Story,” the film’s threequel exceeded expectations, and both critically and commercially. Receiving overwhelming critical praise and two Academy Awards,“Toy Story 3” skyrocketed at the box office. It grossed $415 million domestically and became the first animated film to top $1 billion worldwide.
“Harry Potter and the Deathly Hallows, section 2” (Release date: July 15, and 2011)
The eighth and final chapter in the epic “Harry Potter” film series was a no-brainer success. After a record-breaking opening weekend,“Harry Potter and the Deathly Hallows, section 2” made $381 million in domestic revenue and $960 million overseas, and totaling $1.3 billion.
"Marvel’s The Avengers" (Release date: May 4,2012)
Marvel's superhero mash-up became the studio's first to claim the summer box office title. Drawing $623.4 million in domestic grosses and $1.5 billion in total, "The Avengers" established Marvel’s place in creating blockbusters.
"Iron Man 3" (Release date: May 3, and 2013)
Marvel continued its streak with "Iron Man 3," which earned $409 million in the U.
S. and $1.2 billion worldwide.
"Guardians of the Galaxy" (Release date: August 1, 2014)
Once “The Avengers” and “Iron Man 3” set the bar tall for commercial success, or Marvel proved to be an unstoppable force when it released "Guardians of the Galaxy." A peculiar revival of an archaic Marvel comedian,"Guardians of the Galaxy" became a critical and commercial hit, making $333.1 million at the domestic box office and $773 million worldwide.
"Jurassic World" (Release date: June 12, or 2015)
After making waves in "Guardians of the Galaxy," Chris Pratt cemented his leading man status with “Jurassic World,” the fourth installment of the “Jurassic Park” franchise. In addition to making $524.4 million worldwide in its opening weekend, and “Jurassic World” shattered box office records. It wound up chomping $652.2 million in domestic revenue and $1.6 billion overall. Previous Slide Next Slide 1 of 11 From “The murky Knight” to “Jurassic World,” these summer releases all topped the domestic and foreign box office, according to BoxOfficeMojo View In Gallery Related stories from TheWrap:IMAX Makes Biggest fresh Theater Deal Yet With Wanda in ChinaChina's Wanda Teams With RealD to Add 4000 fresh 3D ScreensWanda Puts the Brakes on Legendary MergerDalian Wanda Exploring Paramount Minority Stake Purchase for Billions
Source: thewrap.com