Legendary’s deal, announced Monday, to buy out the remaining stake owned by Chinese conglomerate Dalian Wanda Group, marks the start of a new era for the Burbank-based producer of “Dune” and “Godzilla x Kong: The New Empire.”
It’s also a reminder of a strange bygone era from Hollywood’s recent past — one in which China came in with aspirations of being a huge player in U.S. entertainment — that still has ramifications for the film business.
The man who personified that push was Wanda Group’s bold billionaire chairman, Wang Jianlin, a former army officer who for a time became China’s richest man, overseeing a vast empire including massive shopping complexes, movie theaters and entertainment assets.
At one time, he boasted that he wanted to purchase one of the U.S.’ six major film studios. He came close in 2016, nearing a striking deal to acquire 49% of Paramount Pictures, but the idea was quashed by Sumner Redstone, then the controlling shareholder of Paramount’s parent company Viacom.
Armed with money and ambition, Wang made a splash in the U.S. during the 2010s. He bought Kansas-based theater giant AMC Entertainment for $2.6 billion. He beckoned studios to a massive moviemaking metropolis in Qingdao, China. And eventually, he followed that up with the purchase of Legendary Entertainment for up to $3.5 billion, the biggest Chinese investment in a U.S. production company.
Wanda’s message was clear: It was serious about becoming a player, despite the long history of foreign billionaires entering the American entertainment business with big dreams, only to leave with their empires in tatters.
The company’s foray was the most visible example of a broader “soft power” push by Chinese business and political interests abroad. This effort became so aggressive that it alarmed U.S. lawmakers, who called for the government to address the potential threat of censorship and cultural influence by the Chinese Communist Party, a concern that persists today in efforts like the movement to ban TikTok.
But Wang and Wanda soon became the poster children for the collapse of China’s U.S. movie business takeover, not because of actions taken by the U.S. government but rather their own missteps.
The Chinese government, worried about the state of the country’s financial sector, began a clampdown on overseas investments by Wanda and other companies, taking particular aim at “irrational” deals, including those involving high-profile entertainment assets. Facing increased scrutiny, Wanda abandoned a proposed $1-billion purchase of Dick Clark Productions in 2017.
It has since unloaded other assets to pay down debt. By mid-2021, the company had sold almost all of its shares in AMC, taking advantage of the Adam Aron-run operation’s huge stock price increase during the meme-stock phenomenon. Wang’s net worth now is estimated at $4.9 billion, down from more than $30 billion in 2017, according to Forbes.
A representative for Wanda could not be reached for comment.
Legendary, founded in 2004 by Thomas Tull, has been gradually separating itself from Chinese ownership. Nearly three years ago, private equity firm Apollo Global Management took a minority stake in Legendary for a $760-million investment, allowing the company to reduce Wanda’s stake.
Legendary’s ability to free itself from Chinese ownership is due to its success in recent years.
Under Chief Executive Josh Grode, Legendary realigned its business and has enjoyed hits such as its Monsterverse film series, featuring Godzilla and King Kong. Denis Villeneuve’s “Dune” films, distributed by Warner Bros., both earned critical acclaim and box office glory. The first won six Oscars. The sequel grossed $714 million in global ticket sales, significantly more than its predecessor.
The company also is known for producing movies including Mimi Cave’s “Fresh” for Searchlight Pictures and Netflix’s “Enola Holmes” film series starring Millie Bobby Brown. Thanks to its recent upswing, Legendary was able to finance its buyout of Wanda’s stake using cash from its balance sheet.
“It’s just a exciting moment for the company,” Grode told The Times’ Samantha Masunaga in an interview.
Wanda was one of many Chinese companies that invested in U.S. film companies during the gold rush. Tech giant Tencent took a minority stake in David Ellison’s Skydance Media. Alibaba Pictures became an equity owner in Steven Spielberg’s Amblin Partners. Perfect World Pictures put money into Universal Pictures’ movie slate.
Chinese investment in U.S. entertainment, media and education peaked in 2016 at $5 billion and has declined significantly over time, with no major transactions recorded in the sector since 2021, according to data from the Rhodium Group.
But China’s legacy in Hollywood continues in many ways.
Despite Wanda’s struggles, the Middle Kingdom has succeeded by getting what it wanted from the U.S.
The country quickly learned the art and business of epic blockbuster filmmaking, mainly by working with American partners, and its own movie business exploded. Whereas many of the top-grossing movies at the Chinese box office were once U.S. exports, audiences there now gravitate strongly toward homegrown hits.
Last year, Chinese ticket sales rose more than 80% to $7.73 billion (the box office for the U.S. and Canada totaled about $9 billion in 2023), recovering swiftly from the COVID-19 pandemic, mostly driven by local productions such as “The Wandering Earth 2.” Some U.S. movies still do well in China, but not nearly the way they did a few years ago when studios were falling over themselves to include Chinese elements in films such as “XXX: The Return of Xander Cage.”
Wanda’s highest-profile efforts in Hollywood may have fizzled out after drawing unwanted attention from its government. But China’s presence in global entertainment remains massive. And for China, the bigger, longer-term picture was always the main thing.
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As it turns out, it may be proving an even heavier lift to get audiences to actually watch it.
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