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China’s Richest Man’s $1 Billion Deal for Dick Clark Productions Might Be Dead

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

UPDATE: Eldridge Industries issued a statement on Friday morning confirming the termination of its sale of Dick Clark Productions to China’s Dalian Wanda. The company said the deal was called off “after Wanda failed to honor its contractual obligations.” The company added: “Eldridge’s affiliate also has filed with the Delaware Chancery Court to compel release of the balance of escrowed funds to which it is contractually entitled given Wanda’s failure to consummate the sale.”

It looks like Dalian Wanda’s proposed $1 billion acquisition of Dick Clark Productions from owners Eldridge Industries is finally dead after more than a month of uncertainty.

Citing “industry sources,” Variety has reported that Dalian Wanda has now moved on from the deal, which the companies first announced in November. The culprit for the collapse seems to be the Chinese government’s recent efforts to cut down on foreign investments in order to keep too much capital from leaving the country. The deal’s prospects also could have been hurt by the current political climate in the U.S., as the new Trump administration has floated potentially antagonistic trade policies while scrutinizing the uptick in Chinese investments in U.S. media properties.

Dalian Wanda is owned by China’s richest man, the billionaire Wang Jianlin, and the company has gone on a media spending spree in recent years that includes last year’s $3.5 billion purchase of the movie studio Legendary Pictures, which co-produced movie hits such as 2015’s Jurassic World. Dalian Wanda also owns U.S. movie theater chain AMC Entertainment Holdings (AMC) and has a marketing deal with Sony’s film studio, while Jianlin has made very clear his intention to continue investing billions of dollars more in Hollywood.

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The deal to acquire Dick Clark Productions from Eldridge Industries—which also owns the entertainment publications Billboard and The Hollywood Reporter—would have given Dalian Wanda control of a variety of entertainment entities such as the Golden Globe Awards and the “Dick Clark’s New Year’s Rockin’ Eve” live special that airs annually on ABC (DIS). The acquisition would have marked Wanda’s entry into the U.S. television production business.

Earlier this year, however, reports began to surface that the deal could be stalling due to concerns over the companies’ ability to secure regulatory approval from the Chinese government. Regulators in the country have stepped up their efforts to curb outbound investments in order to counteract a slide in the yuan’s value against the U.S. dollar that has been exacerbated by Chinese investors looking to escape the country’s weak economy.