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.
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“This deal could help all of that,” says Dergarabedian, by increasing the two-way flow between the markets.
The acquisition of AMC’s screens in the US and Canada may also hand Wanda new outlets for Chinese films in two of the world’s largest film markets.
But potential benefits overlook the underlying flaws in the whole arrangement, says Howard Suber, professor emeritus in the producers program at UCLA’s School of Theater, Film and Television. The acquisition, he points out, comes after a long, steady, decline in theater attendance in the US – ticket sales in 2011 were down some 10 percent from the previous year.
The question, he says, is why do this in the midst of an industry that is struggling for revenues. The answer, he says, “is prestige.” He likens it to the era, more than two decades ago, when Sony scooped up Columbia Pictures and Matsushita purchased MCA, parent company of Universal Pictures.
“Japan was at the top of the economic heap and it got cocky,” he said, “and then when the bottom fell out, as it so often does, they dumped the properties at a fraction of the price they paid for them.”
But as this is a matter of cultural pride for China, he suggests that there may be an influx of films from China over the next 2-1/2 years.
“They may try this for the first year and find out that they do not sell well in these markets,” he says, and they will continue for an additional year, “just to give the strategy a chance to succeed.”
But then, he predicts, they will accept the inevitable that subtitles do not sell well in mainstream American markets, adding: “This whole idea is just dumb.”