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China’s Richest Man Just Announced His Next Step Toward Hollywood Domination

September 23, 2016

Wang JianlinWang Jianlin
Wang Jianlin, chairman of Wanda Group, gestures as he speaks during a ceremony for the "China Cup" at the Sofitel Hotel in Beijing, Wednesday, July 13, 2016. Photograph by Gerry Shih — AP

Chinese conglomerate Dalian Wanda Group will market Sony Pictures’ films and co-finance some upcoming movie releases of Sony’s film unit in China, which is forecast to become the world’s top movie market as soon as next year.

Wanda, owned by China’s richest man, Wang Jianlin, and Sony (SNE) announced a deal on Friday under which Sony Pictures will utilize China’s biggest theater chain owner Wanda to better access a rapidly growing yet restricted movie market.

The alliance will help Wanda extend its Hollywood footprint and further Wang’s goal of making the group a global entertainment powerhouse.

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Wanda said in a statement on its website the tie-up would use its consumer-facing infrastructure to bolster Sony Pictures’ presence in China, which is on track to surpass the United States as the world’s biggest probably by next year, according to industry executives.

“This partnership makes a lot of sense for both parties. Sony will benefit from smoother distribution and playback of its films in China and Wanda will be able to further integrate into the content development side of the business,” said Ben Cavender, Shanghai-based principal of China Market Research Group.

“We are going to see more cooperation going forward…Tie ups make sense because a lot of Chinese companies are also becoming interested in film financing as a form of investment,” he said.

This would be Sony Pictures’ first partnership with Wanda, which has previously invested in movies made by Viacom’s (VIAB) Paramount Pictures unit, such as Teenage Mutant Ninja Turtles sequel, and would give Wanda a step into movie marketing.

Despite an economic slowdown and dipping ticket sales, China showed how it could still be a savior for Hollywood producers in June after Universal’s $160 million blockbuster Warcraft managed to chalk up $156 million in China in the first five days despite flopping in the United States.

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But the country’s regulator restricts the number of imported films that theaters can show to 34 a year, a limit that films which qualify as co-productions and meet other criteria are exempt from. These films also have an easier time navigating censorship issues with notoriously picky industry watchdogs.

Profits at Sony’s film unit fell 34% over the year to March after it struggled to achieve hits at the box office over that period.

Wanda declined to provide further details on the deal. Sony was not immediately available to comment.

Hollywood Dreams

Started by Wang as a property developer in China’s northeast, Wanda now owns theaters, massive shopping malls and amusements parks around the country.

The billionaire has said he wants to bring Hollywood technology and capabilities to China through acquisitions, telling Reuters in August that he was keen to buy Hollywood’s “Big Six” studios and was close to sealing two billion-dollar film related deals.

See also: China’s Richest Man Set to Seal 2 Billion-Dollar Hollywood Film Deals

Wanda already owns Legendary, co-producer of hits such as Jurassic World and The Dark Knight, which was the biggest U.S.-China movie deal when it was sealed in January, and U.S. cinema chain AMC Entertainment Holdings.

Besides Wanda, Chinese companies that have invested in Hollywood include Fosun International and Huayi Brothers Media.