Continuing its surging interest in worldwide entertainment, Dalian Wanda Group is reportedly in talks to acquire 49 percent of Paramount Pictures, the only major American film studio still based in Hollywood.
The proposed studio deal follows just months after the Chinese conglomerate controlled by mainland billionaire Wang Jianlin bought out Hollywood production company Legendary Entertainment in a deal it valued at $3.5 billion. This latest big screen offer is part of Wanda’s ongoing transformation from China’s largest property developer into a global entertainment empire spanning finance, movie production and cinemas that started with Wang buying the AMC Theatre chain in 2012.
If Wanda manages to secure its Paramount purchase, it would be getting more than a film studio. The 65 acre (26 hectare) Melrose Avenue Paramount lot is one of the prime pieces of real estate in Hollywood, an iconic property whose value in a city undergoing rapid redevelopment may be under-utilized.
China’s Richest Man Likes American Entertainment
Dalian Wanda has been aggressively pushing into the American market. It made a huge splash recently when it rescued the disappointing “Warcraft” movie, which bombed at US box offices, but came in with more than $200 million in receipts thanks to an impressive rollout by Dalian Wanda in its theatres across China.
Paramount, part of the publicly-traded Viacom corporation, has been struggling. It placed last among the six major film studios in 2015 box office returns, according to trade magazine Variety. The studio has also been mired in controversy over the much-debated cognitive powers of 93-year-old Sumner Redstone, Viacom’s controlling shareholder, who has a strong attachment to Paramount and is said to be opposed to any sell-off.
Speculation on what the 49 percent stake in Paramount would cost Dalian Wanda has varied greatly. Most peg it around $3 billion to $4 billion (RMB 20 to 26.7 billion), although Paramount’s cash flow of $111 million in its last full fiscal year makes those figures an astounding multiple and premium price.
Still, Paramount remains one of the film industry’s most iconic brand names, and would fit nicely with Dalian Wanda’s expanding presence in the Los Angeles area.
Wanda Already Established in LA
Wanda Group in 2014 won the bidding for a plot of land at 9900 Wilshire Blvd in Beverly Hills, where the Chinese conglomerate plans to invest $1.2 billion to build a mixed-use development.
The Chinese developer beat out more than 10 bidders from Asia and North America to acquire the site, widely regarded as among the most desirable development locations for luxury property in Los Angeles, situated in a prime luxury residential area 10 minutes walking distance from the world famous Rodeo Drive shopping area.
The Wanda Group has also taken steps toward its goal of becoming the world’s largest theatre owner. Earlier this month, it acquired Europe’s largest cinema chain, Odeon & UCI Cinemas Group, for $650 million in a deal expected to close in the fourth quarter of this year.