On a warm October Sunday in Beverly Hills, Wang Jianlin, China's richest man and the chairman of Dalian Wanda Group, made his way to a conference room adjacent to the bar at the Montage hotel. Joining Wang and his Beijing entourage were executives of Dick Clark Productions, the prolific production company behind awards shows including the Golden Globe Awards, as well as several members of the Hollywood Foreign Press Association, which puts on the Globes each year.
The meet-and-greet, organized to introduce HFPA members and their counsel to the company that was in discussions to buy Dick Clark, is said to have been a cordial back-and-forth, with the journalists asking questions about Wanda's plans for the company and Wang expressing his desire to maintain business as usual, with the current leadership of chairman Peter Guber, CEO Allen Shapiro and president Michael Mahan staying on board via long-term employment agreements, while owner Todd Boehly would remain an advisor to Wanda.
Now Wanda has finalized its purchase of Dick Clark, moving the Chinese company into the television business for the first time. The sale price is $1 billion, the companies announced Thursday in a joint press release.
“We are excited to partner with such an iconic company and look forward to supporting the management team as they continue to build the company and expand upon its enormous legacy,” Xiaoma Lu, CEO of Wanda Investment Company, said in a statement.
In 2012, Guggenheim Partners and others paid $370 million for Dick Clark amid increased demand for television content, especially live events like Dick Clark's American Music Awards and Billboard Music Awards, which are perceived as more "DVR proof" and thus appealing to advertisers. Since that purchase, ratings for live awards shows have remained steady or declined slightly while the overall television landscape has suffered ratings drop-offs. In 2015, Dick Clark's majority ownership was acquired by Boehly's Eldridge Industries.
"They are a dominant and aspirational player in media in the fastest-growing media market in the world," Shapiro tells The Hollywood Reporter in an interview. "This will help us expand our business globally." Adds Mahan: "We are confident in our plan to continue to grow the business and Wanda shares our vision and enthusiasm for the future of content ownership. They are an ideal partner."
DCP has been part of a group of entertainment assets controlled by Eldridge, the personal holding company of former Guggenheim Partners president and Los Angeles Dodgers co-owner Boehly. Many of the Guggenheim-led entertainment properties were sold last year to Eldridge, which had been working with investment banks Moelis & Co. and Goldman Sachs after approaches were made on Dick Clark. (The Hollywood Reporter and Billboard media brands also are Eldridge assets but are not part of the Dick Clark sale.)
Wanda's purchase marks a major escalation into TV for a Chinese firm that aggressively is pursuing Hollywood companies. Earlier this year, Wanda paid a reported $3.5 billion to acquire Legendary Entertainment, Thomas Tull's studio behind Pacific Rim, Warcraft and the upcoming The Great Wall, starring Matt Damon. Wanda, which began as a real estate development company in China, already owns the AMC Entertainment theater chain in the U.S. and other chains around the world. In addition to inking a major partnership with Sony Pictures and building a production studio in the Chinese port city of Qindao that will be twice as large as the biggest American studio lot, Wang is blunt about Wanda's goal of owning a U.S. studio or investing in several.
"I might as well start from wherever I can, such as through investment with all six [studios]," Wang told THR in an interview that published this week on THR.com outlining his Hollywood investment strategy. "We will continue to work on a potential acquisition. But it won't hurt to start by doing what we can. Participating via investment seems like a wise choice for the time being."
The aggressive move into entertainment by Chinese firms such as Wanda and Alibaba, which recently inked an investment deal with Steven Spielberg's Amblin Partners, has drawn some backlash in the U.S. House of Representatives. Sixteen members wrote a joint letter in September asking the U.S. Government Accountability Office to consider expanding the scope of the Committee on Foreign Investment so it could scrutinize Chinese acquisitions of U.S. media companies under the same guidelines it uses to assess sectors of national security interest. But that move has drawn criticism from many quarters, including The Wall Street Journal, which came out on its editorial page against the effort: "U.S. regulators shouldn't intrude into how movies get made," the paper wrote.
Further, Dick Clark doesn't select the winners of the awards shows it produces, meaning Wanda can't decide to influence the outcome of the Globes or AMAs, even if it wanted to interfere. The HFPA, for instance, selects the Golden Globe honorees via a vote of its 90-odd members and Dick Clark executives are not involved in that process.
The Wanda deal is the fourth sale in a decade for Dick Clark, which was launched in 1957 by the legendary broadcaster and American Bandstand host, who died in 2012. In 2007, RedZone Capital Management, a private equity group funded by Daniel Snyder, paid $175 million for the company. Guggenheim partnered with Guber's Mandalay Entertainment and others to buy it in 2012, then Eldridge purchased it last year from Guggenheim.
Dick Clark was advised on the Wanda deal by Moelis, Goldman Sachs, legal counsel Paul Hastings and attorney Marshall Watson. Wanda's reps included attorneys from Reed Smith.