SEEMS LIKE OLD TIMES – AT 8:01 A.M. ET: Remember the days when the Japanese were buying up everything in sight? We bemoaned our fate. The former enemy, soundly defeated and leveled in World War II, had become an economic superpower, in some cases buying the very movie studios that had turned out morale-building war movies.
The more things change, the more they... Read on:
LOS ANGELES — The Wanda Group, a Chinese conglomerate with extensive interests in the entertainment business, has agreed to acquire AMC Entertainment, North America's second-largest movie-theater owner, in a deal that is valued at $2.6 billion, including roughly $2 billion in assumed debt, the companies said Sunday.
The acquisition creates the world's largest theater group, the companies said. It also represents a significant expansion of Chinese influence in the American film industry. The industry has been looking to China for a vast new reservoir of ticket buyers for Hollywood movies, while joining Chinese investors to produce films like the planned "Iron Man 3" and teaming up to build studio facilities and a new Disney theme park in China.
The Hollywood crowd has no problem with China. It has a big problem with the United States.
Wang Jianlin, chairman and president of Wanda, said his goal was to own theaters covering 20 percent of the world theater market by 2020.
Which means control over what goes into those theaters.
Gerardo I. Lopez, AMC's chief executive, said that he would stay with the company for a period of years under a new contract, and that other top managers at AMC were similarly expected to remain in place, though he declined to be more specific.
A former top executive at Starbucks, Lopez aggressively expanded food and beverage offerings in AMC theaters after taking charge in 2009.
Let's face it: There isn't much to sell up on the screen.
The current deal offers Wanda a point of entry to the North American movie market. Its box-office, with about $10.2 billion in ticket sales last year, remains nearly five times the size of China's, which is now the world's second largest, with more than $2 billion in annual sales.
After a buyout in 2004, AMC has been owned by a collection of funds led by the Apollo Investment Fund and J.P. Morgan Partners, which together control about 39 percent of the company. Other investors include Bain Capital, the Carlyle Group and Spectrum Equity Investors.
COMMENT: The story raises troubling questions. When Japan bought movie companies, it was noted that Japan was a democracy and an ally of the United States. China is not a democracy and is not an ally. It is a potential foe, which is rapidly building its military forces. Now it will have a measure of control into the movies that go into American theaters. This will impact Hollywood's decisions as to which movies get made, and which ones don't.
But if we raise these questions publicly, we'll be called racists and warmongers.
May 21, 2012