Jack Gao Exits China's Wanda, Legendary Entertainment (Exclusive)

Courtesy of Subject
Jack Gao

Zeng Maojun, president of Wanda Film Holding Co., will take the reins as Legendary's interim leader.

Jack Gao, senior vp of billionaire Wang Jianlin's Dalian Wanda Group and interim CEO of Legendary Entertainment, has exited the Chinese conglomerate, sources familiar with the situation tell The Hollywood Reporter.

Zeng Maojun, president of Wanda Film Holding Co., will take the reins as Legendary's interim leader, according to sources. The studio has been without a CEO since founder Thomas Tull departed in January, following his company's sale to Wanda for $3.5 billion roughly one year prior. Zeng has recently been spending much of his time in Los Angeles, taking meetings around town and attending events

Mary Parent, Legendary's head of production, is said to be staying with the Burbank-based studio, which recently wrapped Pacific Rim: Uprising and has several other big-budget projects in development.

Dalian Wanda Group declined to comment.

Sources tell THR that Gao decided to depart of his own accord, as his role had become hampered by recent regulatory changes in Beijing that have made overseas investing difficult to impossible for Chinese conglomerates operating in the entertainment sector. 

A former News Corp. and Microsoft exec, Gao joined Wanda in 2015. In addition to his interim duties at Legendary, he served as Wanda's CEO of international investments and operations, a role that entailed acting as one of Wang's chief strategists during a period of aggressive international expansion for the firm in 2015 and 2016. That era came to a screeching halt around the close of 2016, however, when Beijing began a strict clampdown on Chinese capital outflows and corporate indebtedness. 

Wanda, along with fellow conglomerates HNA Group, Anbang Insurance and Fosun International, a backer of Jeff Robinov's Studio 8, were singled out by the crackdown in July, when financial regulators instructed China's state banks to stop lending to the four firms for overseas expansion. Regulators were said to be especially perturbed by the conglomerates' pricey, debt-fueled acquisitions in the entertainment, sports and hospitality sectors (Wanda abandoned a $1 billion deal to buy TV producer Dick Clark Productions in March).  

Wanda responded with a series of moves that appeared calibrated to signal to the Chinese government that it would step in line. 

Speaking with China's preeminent business news outlet in July, Wang said: "Wanda will respond to the state’s call and has decided to keep its main investment within China."

The new domestic focus represented a radical about-face from Wanda's prior outward-looking strategy — and Gao's remit — of the past two years. Around the same time, Wang executed a debt-reducing fire sale of the bulk of his Chinese hotel and theme park holdings, unloading the assets to fellow local property developers Sunac and R&F Properties Co. for a combined $9.5 billion.

Sources close to Wanda say the company is now in something of a holding pattern. No major Chinese company is expected to be able to make moves in the international entertainment arena until the conclusion of China's 19th Communist Party Congress, a high-stakes political event that kicks off Oct. 18. And analysts are divided on whether a smooth conclusion to the political occasion will result in a regulatory easing, or if the current constraints are something dealmakers will have to endure long-term. 

But with Wanda already so deeply invested in the international film business — the company owns the world's largest movie theater network, comprising North America's biggest circuit AMC, two major chains in Europe, one in Oceania, as well as China's largest — sources close to Wang say he believes surrender from global entertainment is not an option.