Dalian Wanda CEO: China To Be 'Center Of The Global Film Industry'

    Dalian Wanda's recent announcement of a major new movie complex in Qingdao highlights its massive global ambitions.
    Jing Daily
    Noë GoldAuthor
      Published   in Finance

    Actor Leonardo DiCaprio arrives on the red carpet for Dalian Wanda's announcement of the $4.9 billion Qingdao Oriental Movie Metropolis on September 22, 2013 in Qingdao, China.

    When the Dalian Wanda Group, China's burgeoning real estate development powerhouse, which operates cinemas, hotels, and department stores in China, donated $20 million to the Academy of Motion Picture Arts & Sciences for its new film museum last week, the gift was only the second salvo in a three-stage assault on Hollywood.

    The first stage of Wanda CEO Wang Jianlin (the richest man in China with personal assets estimated at $22 billion)'s well-orchestrated campaign was mounted last year when he purchased U.S. movie chain AMC Theatres—the second-largest theater chain in the United States—for $2.6 billion. Wanda was already the largest cinema operator in Asia with 6,000 Chinese movie screens, and is now reportedly the largest in the world.

    Wang's forays into the entertainment business are marked by a singular drive that will not brook opposition to his vision of the future. “It’s my dream,” Wang told the Wall Street Journal. “When I decided in 2005 to enter the film industry, opening theaters, 99 percent of our stakeholders were opposed, saying the investment wouldn’t pay off … But I decided to chase my dream. Now look at this market.” Indeed, he told the state-run New China News Agency at Sunday's groundbreaking ceremony for an $8.2 billion moviemaking complex-cum-studio-and-theme-park, that China's box-office revenues will surpass those of the United States by 2018 and double by 2033.

    He’d previously said he plans to invest as much as $10 billion in U.S. entertainment and property deals. Wang told the WSJ it would take some years, but “I strongly believe that China will be the center of the global film industry.”

    The announcement ceremony for Dalian Wanda's Qingdao Oriental Movie Metropolis on September 22, 2013 in Qingdao, China. (Dalian Wanda)

    A little shindig Wang threw this weekend in Qingdao, a coastal city developed by Germany to produce Tsingtao beer, not movies, represents the third sortie of Wanda's campaign for world cinema dominance. At a cost of $50 million, Wang jetted Hollywood moguls, as well as U.S. and Chinese cinema royalty including Leonardo DiCaprio, Nicole Kidman, Catherine Zeta-Jones, John Travolta, Kate Beckinsale, Ewan McGregor and Christoph Waltz to the event. A-list Chinese stars included Zhang Ziyi, Jet Li, Tony Leung, Donnie Yen, Huang Xiaoming, and Vicki Zhao, while senior U.S. execs such as Weinstein Co. Chairman Harvey Weinstein, Lionsgate motion picture bosses Rob Friedman and Patrick Wachsberger, and Academy of Motion Picture Arts & Sciences President Cheryl Boone Isaacs joined in the festivities, having responded to this invitation from Wang.

    "I am writing to personally invite you to attend a celebratory event in Qingdao, China on September 21-22, which will include a groundbreaking ceremony for the Wanda Qingdao Film Production Base and the announcement of the annual Qingdao International Film Festival … and we would be greatly honored by your attendance. We hope to deepen the relationship between Wanda and ______ through this event, and together develop the global motion picture industry in the future."

    His $4.9 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, complete with a Chinese version of the Hollywood sign for the mountain overlooking property, set to open in 2017.

    The 900-acre Film Industry Park will also include several outdoor lots, 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. A yacht marina, eight hotels, and a theme park will be built to attract tourists.

    Wang also hopes to attract more than 50 Chinese production companies to make at least 100 domestic films and TV shows a year at the studios, where sets will simulate locations from Europe, the Middle East, and China's Ming and Qing dynasties.

    Josh Dickey, who reported on the development for The Wrap, tweeted about his story: "Hollywood cheerfully shows up in force to hear China's Dalian Wanda Group announce intentions to kick its ass."

    From Wanda's point of view, the deal would be advantageous to both sides. It should produce "at least a hundred films a year", according to the Wanda Group, which says it has reached preliminary agreements with "a number of global film and television giants and talent agencies" to shoot about 30 foreign films a year. It did not name the companies.

    Dalian Wanda CEO Wang Jianlin announces the creation of Wanda's Qingdao Oriental Movie Metropolis on September 22, 2013 in Qingdao, China. (Dalian Wanda)

    He predicted China's film market would become the world's biggest in five years, and compared it to a big cake that foreign studios would love to share.

    For its part, Hollywood has been eager to expand distribution in China as domestic box office revenue stagnates. But the Chinese government tightly controls the market, allowing in only 34 foreign films per year for national distribution. At least 14 of them must be made in 3-D or for the big-screen IMAX format. Wanda's AMC deal includes a relationship with IMAX. "We have the will and capability to go global," Wang said at an event in Century City to mark the closing of its acquisition of AMC. "The acquisition of AMC is the first step."

    The second major step in Wang’s pursuit of his global film tycoon ambitions was last week's $20 million gift to the Motion Picture Academy. While it was touted as an act of philanthropy, philanthropy in China is not the same thing as it is in the United States, as it provides no tax breaks. As a result, despite China surpassing the United States this year as the country with the most billionaires, according to Shanghai-based research firm Hurun, total charitable giving in the country is just 4 percent of the U.S. level.

    However, the Academy Museum donation represents a cost-effective effort at brand recognition for a company that wants to make its mark on the U.S. film industry. In recognition of the gift, the museum's film history gallery will be named the Wanda Gallery. The Academy Museum of Motion Pictures is being designed by architects Renzo Piano and Zoltan Pali for an opening in 2017 on the site of the former May Co. building on the corner of Fairfax Avenue and Wilshire Boulevard in Los Angeles.

    "The Academy Museum of Motion Pictures is a global cultural institution, and the Dalian Wanda Group's support of the project speaks to the worldwide importance and the appeal of the movies," museum campaign chair Bob Iger, chairman and chief executive of the Walt Disney Co., said in a statement. "Their gift to the academy museum is a huge boost to our efforts to design and build the world's leading movie museum."

    As part of a larger partnership with Wanda, the academy said it would extend its global programming reach and advise the company on film screenings and symposiums in China.

    Though Wanda does not have any funds invested in film museums in China, the Qingdao center could serve as a home for screenings and exhibitions, and Academy officials' presence at the Qingdao groundbreaking confirmed that Academy leadership will help to oversee the film festivals that were announced as part of the center's cultural events.

    "Our relationship with the academy is an important part of our role in the global motion-picture industry," Wang said in a statement. "I am, and the Dalian Wanda Group is, very pleased to partner with the academy and support the Academy Museum of Motion Pictures."

    "There's no single company in the whole world that has a big-scale production base, and at the same time has screening and distribution channels. Wanda Group is the first one in the world," he continued. "As long as we build the film production park and produce better content, we'll certainly be the most successful company in this industry."

    Or, as one very American baseball movie said it, "If you build it, they will come."

    Noë Gold (@DoctorNoe222is Jing Daily's Hollywood correspondent.

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