Big-screen blockbuster: Chinese conglomerate gobbles up AMC chain
In what some are calling a $2.6 billion prestige play, China's big fish Wanda is swallowing AMC to create the world's largest theater chain despite the steady decline in the US industry.
In the largest single Chinese investment in a US business to date, a Chinese real estate and entertainment conglomerate called Dalian Wanda Group has just purchased AMC, the second-largest US movie theater chain with more than 5,000 screens in the US and Canada.Skip to next paragraph
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The $2.6 billion purchase, which makes Wanda the world’s largest theater chain owner with nearly 5,800 screens and more cinema-chain purchases under consideration, has many wondering it will mean for moviegoers.
“This transaction will help make Wanda a truly global cinema owner, with theaters and technology that enhance the movie-going experience for audiences in the world’s two largest markets," said Wang Jianlin, Wanda's chairman and president, in the Los Angeles Times.
“They intend to put a lot of money into expansion and improvements,” says Dergarabedian, some $500 million according to the company’s statements.
The purchase, he says, shows a lot of confidence in the theatrical sector: “You don’t put that kind of money into something that is not relevant.”
This commitment could show up in such items as more reserved seating and higher-quality or more varied concession items. “Maybe even some different kinds of food,” adds Dergarabedian with a laugh, “although I’m sure they will always sell popcorn, who knows if some of their own treats might be a big seller.”
Don’t look for these amenities in every market, however, says Steve Herz, an entertainment attorney and founder of IF Management, a talent agency in Manhattan.
“I think they will in specific markets,” he says via email, mentioning New York and Los Angeles. But only if the economics make sense, he adds, with sufficient “consumer demand and willingness to spend $25 on a movie ticket or more.”
Some experts cautiously suggest this deal could create more openness in a relationship historically marred by conflicts over Chinese censorship and piracy of US films.
Indeed, eyeing the potential of the vast Chinese marketplace, Hollywood is moving ahead full steam, points out Dergarabedian. This deal comes on the heels of several recent moves. According to the Los Angeles Times, Chinese film distributor Bona Film Group announced it had agreed to sell News Corp. a roughly 20 percent stake.