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Hollywood's new US$42b man puts China in US film industry
[LOS ANGELES] Jake Gyllenhaal is getting what Hollywood calls Oscar buzz for his performance in "Southpaw," which opens across the US on Friday. Wang Jianlin is getting some too, because Wanda Pictures financed the movie - a first for the company controlled by the richest person in China.
A first, apparently, for any Chinese company.
Mr Wang heads Dalian Wanda Group Co, which owns the second-largest US cinema chain and is building the world's biggest studio-plus-theme park, at Qingdao Oriental Movie Metropolis on China's eastern coast. Last year Wanda bought land in Beverly Hills, calling the US$1.2 billion complex it plans to erect there its "first important step into Hollywood."
Actually, it may have taken that with the check it wrote for "Southpaw," an R-rated Weinstein Co drama about a boxer. Wanda's role as financier puts it a beat ahead of Chinese rivals including Alibaba Group Holding Ltd and Tencent Holdings Ltd that are staking their Hollywood claims with investments and deals but haven't yet carried the full freight of a US film.
The partnership with the award-winning Weinstein studio has moved Wanda closer to becoming "a complete international entertainment company," said Marc Ganis, co-founder of Jiaflix Enterprises, which helps market and distribute films in China.
"Southpaw" might not be a big movie, with forecasts it'll sell about US$45 million in tickets during its US run. But it's generated media attention since studio Co-Chairman Harvey Weinstein showed a clip at the Cannes Film Festival that revealed Gyllenhaal's startling transformation into a ripped prize-fighter; he has said he gained 15 pounds of muscle.
The movie, which premiered at the Shanghai International Film Festival, cost more than US$25 million to make, with Wanda Pictures picking that up and the Weinstein studio covering US$35 million in marketing expenditures, according to a person familiar with the matter.
For Wanda, "Southpaw" was a "rare experience" to study Hollywood's modus operandi, the company said in a press release, in which it declared itself the first from China to "solely finance an American movie." Film budgets aren't public, but no other investors from China have made the claim.
Alibaba, Tencent, Huayi Brothers Media Corp and more have been busy doing other deals. They want stakes in the American entertainment business to gain content for their outlets at home, and for expertise.
"The Chinese are looking to the US for 'know how' in making films with international appeal," said John Burke, head of the entertainment and media practice at Akin Gump Strauss Hauer & Feld.
Wanda said in the release that the Chinese movie business "badly needs industrialization." Maybe so, but the country's movie market is the second-largest by box office receipts and growing annually by 40 per cent, according to the Chinese Film Producers' Association. China could overtake the US in cinema ticket sales before 2020.
Mr Wang, whose net worth the Bloomberg Billionaire's Index put at US$41.8 billion on Thursday, told Bloomberg Markets magazine in March that buying Hollywood studios would give him the content and distribution outlets to conquer that market.
He said then that Wanda was in talks to buy a stake in Lions Gate Entertainment Corp, the studio behind "The Hunger Games" films, but nothing has come of the negotiations.
A former People's Liberation Army soldier, Mr Wang started talking to the Weinstein studio about investing in a movie before Wanda's 2012 purchase of the AMC Entertainment theater chain, said David Glasser, the studio's president.
"We met to discuss what Wanda wanted to do, how we can find a movie they can be proud of."
"Southpaw," he said, "was the one that resonated most." It was directed by Antoine Fuqua, known for "Training Day," for which Denzel Washington won a best-actor Oscar.
"We really did this movie together," Mr Glasser said. "We went through a lot of modeling, education of the process, how the business works. They were involved - it wasn't just a silent investment." A gritty, violent drama about a one-time champion fighter who's hit bottom and stages a comeback, "Southpaw" is a telling choice for the Wanda Group unit, said Janet Yang, a producer and consultant who splits her time between the US and China.
"They aren't just making conventional moves." Ms Yang predicted more alliances between Hollywood and Chinese companies, and more money flowing from east to west. "We are going to see funds and private equity players from China," she said. "They see this as a great arena to play in."
Partnerships aren't new; US studios have long used them to market and distribute in China, where regulations restrict the number of foreign films that can be shown in theaters. And Hollywood is as eager as ever for Chinese money, courting investors, including state-owned enterprises, aware the government may censor their productions.
This weekend, one of the movies "Southpaw" will compete against is Sony Corp's "Pixels" with Adam Sandler, partly financed by state-owned China Film Group, the country's largest film producer and distributor.
And coming soon, "Mission: Impossible - Rogue Nation." Alibaba Group, whose chairman, Jack Ma, is China's second- richest person, said in June that the Tom Cruise thriller marked its first-ever US film investment, and that it will help Paramount Pictures with marketing in China. It opens July 31.