An Overture From China Is Yet to Win Hollywood

To judge from the pace of the deal-making so far, it may take a while.

Wanda has been talking with some studios, as Mr. Wang promised when Wanda completed its $2.6 billion acquisition of AMC Entertainment with a flashy presentation in early September. But any progress has come in halting steps, according to people briefed on the talks, who spoke on condition of anonymity to avoid conflict with the principals.

And that probably carries an overall message about the film industry’s current rush to do business in China: The promise is great, but much is still being lost in translation.

“Hollywood would prefer to accept what they commonly call ‘dumb money’ and not give very much back in return,” said Stanley Rosen, a University of Southern California political science professor who has written extensively about China. “China is now pushing back.”

Both sides are likely to continue pressing their efforts; Hollywood is eager to have a partner that can help it tap into China’s fast-growing film market, and Wanda wants to strengthen its foothold in the lucrative North American market. But the slow going underscores the disconnect inherent in negotiations between parties whose goals reflect their own, more narrow interests.

Wanda is looking to be involved in potentially lucrative Hollywood projects. But big studios are extremely wary of sharing the pie with partners who do not want to settle for less than the very best the studios have to offer.

At 20th Century Fox, where Mr. Wang paid a call in late summer, the studio was quickly reported in The Los Angeles Times to be completing a deal under which it would co-produce films with Wanda in China.

Five months later, according to one person briefed on the dealings, the discussions continue over the possible coproduction of some Chinese language projects, and the relationship is cordial. But there is, so far, no Fox-Wanda pact, partly because Wanda would prefer to get involved with some mainstream Hollywood productions, and Fox has not been ready to discuss that.

A spokesman for Fox declined to comment on any dealings with Wanda. And Wanda representatives did not respond to queries that were relayed through Fleishman-Hillard, an American-based public relations firm that has represented the Chinese company in the past.

At Sony Pictures Entertainment, another stop on Mr. Wang’s summer itinerary, talks have centered on the possibility that Wanda would provide financing of $300 million to $600 million for a slate of Hollywood films, according to people who were briefed on the talks.

One of those people said a deal appeared close. But another said it has been hung up over financial terms — Sony is said to be demanding a higher fee as the distributor of the films than Wanda, which would be paying for them, would like. There are also questions about what movies would be included. Sony would prefer to exclude its valuable sequels and prequels to movies like the Spider-Man series, for instance; Wanda would prefer to see everything on the table.

A spokesman for Sony declined to comment, adding that the studio generally does not discuss its financing.

One clear step taken since Mr. Wang’s trip has been in a reverse direction.

A few months after Wanda’s acquisition of AMC Entertainment was completed, according to a December report in the Santa Monica Daily Press, the theater company informed the city of Santa Monica that it was terminating talks — which had been going on for more than three years — about plans to build a new entertainment complex near a central promenade, where AMC operates three smaller, and aging, theaters.

Santa Monica officials had viewed the new complex, which was to cost about $33 million, as a centerpiece in the renewal of its downtown. That area will soon be served by a new rail line connecting it with Culver City and downtown Los Angeles.

But the city, which is known for its elaborate development agreements and close attention to things like public art and spaces, was notified, shortly after completing an environmental impact report, that AMC and its team had decided the project was not cost-effective.

Sun Dee Larson, a spokeswoman for AMC Entertainment, now a Wanda unit, said in an e-mail last week that she was traveling in China and could not immediately discuss the Santa Monica project. Ms. Larson also said she could not provide a Wanda contact who might discuss the film financing talks.

But Jason Harris, Santa Monica’s economic development manager, said city officials had thought the project, which had been slowed while AMC negotiated its own sale to Wanda, would benefit from new capital that came with the new owner. Instead, he said, it bogged down, partly over the theater company’s reluctance to commit to amenities like reserved seating.

Now, however, other potential theater developers are taking a look. “You wouldn’t believe the level of interest,” said Mr. Harris.

Article source: http://www.nytimes.com/2013/01/21/business/media/an-overture-from-china-fails-to-win-hollywood.html?partner=rss&emc=rss