×

Wanda Nearing $1 Billion Deal for Dick Clark Productions

The Dalian Wanda Group is nearing an agreement to buy Dick Clark Productions in a deal valued at approximately $1 billion, sources tell Variety.

Wanda is expected to finalize the sale by the end of the week. The acquisition would mark yet another aggressive move into Hollywood for the Chinese real estate and entertainment conglomerate. DCP would give Wanda a presence in the world of glitzy live events, such as the Golden Globe Awards, and the infrastructure for unscripted TV production.

Wanda already owns AMC Theaters and Legendary Entertainment, and is planning to acquire Carmike Cinemas, which would create the world’s largest exhibitor. The deal is coming together just as Wanda chairman Wang Jianlin arrives in Hollywood this week to make the rounds and take part in a gala tonight at the Los Angeles County Museum of Art designed to promote doing business in China.

Guggenheim Partners bought Dick Clark Productions in 2012 for $370 million — a price that at the time many thought was inflated. More recently, the company was spun off from Guggenheim to Eldridge Industries, which is owned by former Guggenheim exec Todd Boehly.

In 2007, DCP was acquired by Dan Snyder’s RedZone Capital Management for about $175 million.

DCP is best known for producing the Globes, the American Music Awards, the Academy of Country Music Awards and several other awards franchises, as well as ABC’s perennial “Dick Clark’s Rockin’ New Year’s Eve” special. It also produces reality series such as Fox’s “So You Think You Can Dance?” DCP recently struck a deal with ABC to produce “For the Record Live” specials involving soundtracks to well-known films.

But the company in recent years has struggled to produce successful new programs. Industry observers were shocked when word surfaced last month that Wanda was considering such a high valuation for the company. One source who looked at the company when it was on the block in 2012 called the estimated $1 billion price tag “nonsensical” given the lack of new assets added in the past four years. Another industry source familiar with the latest sale process said the highest offer for DCP outside of Wanda was around $600 million. “Unreal” was how the source described the Wanda deal.

Stanley Rosen, a USC political science professor who specializes in China, said that Wang is making a bet on the popularity of American entertainment in China.

“He’s overpaid for a number of assets,” Rosen said. “It’s always been more than economics. It’s not just about making immediate money. He’s got a long-term vision. He’s willing to overpay for assets to get his name out there as a serious player in Hollywood.”

When DCP was sold in 2012, it had annual earnings of $36 million, before interest, depreciation, amortization and taxes, according to a financier privy to the terms. Earnings have increased to as much as $60 million-$70 million annually, on the strength of new contracts with broadcasters that air the company’s shows, according to the source, who declined to be named.

The financier said Wanda was attracted to Dick Clark Productions because of the “real cash flow” that the company produces. The source was not familiar with the final price tag, but predicted the Chinese conglomerate would offer at least $800 million for the company. He called the deal “imminent.”

Wanda and DCP may be betting on the moneymaking potential of the company’s most high-profile production, the Golden Globe Awards, growing significantly when the contract comes up for renewal in 2018. NBC at present pays an estimated $21.5 million a year for the awards show, half of which goes to DCP.

As the major networks put more emphasis on the value of can’t-miss live events, the annual Globes license fee could rise if DCP and the Hollywood Foreign Press Association can whip up a bidding war among networks. DCP and HFPA waged a four-year legal war over control of the TV rights to the Globes that began in 2010. They reached a settlement in 2014 that is believed to ensure DCP remains on board beyond the 2018 NBC contract expiration for at least another 10 years, although the license fee split will not be as generous toward DCP in the future.

DCP also owns the archive of its namesake’s “American Bandstand” music series that ran with Clark as host from 1956 through 1989. But the clip licensing from the show is complicated and costly because of the need to obtain music rights.

Representatives for Eldridge Industries and Wanda declined to comment.

James Rainey contributed to this story.

(Pictured: Wanda chairman Wang Jianlin)

More Biz

  • Terry Wakefield Exits Sony/ATV to Head

    Terry Wakefield Exits Sony/ATV to Head Up A&R at UMPG Nashville

    After a decades-long tenure at Sony/ATV Nashville, Terry Wakefield has followed another alumnus, Troy Tomlinson, across town to take a top position at Universal Music Publishing Group Nashville. Wakefield is senior VP of A&R at UMPG after having been senior VP of creative in his previous post. Personal loyalty to Tomlinson, UMPG Nashville’s recently named chairman/CEO, [...]

  • Sally Williams at PBS Country Music

    Sally Williams to Leave Longtime Opry Home for Top Post at Live Nation in Nashville

    Nashville executive Sally Williams is leaving Opry Entertainment, where she rose to the top over a two-decade tenure there, to join Live Nation’s regional office as the president of Nashville music and business strategy, the company announced Monday. Live Nation said Williams will not only lead programming and marketing for their concerts in the area, [...]

  • Fourward

    Management Company Fourward Taps Christopher Burbidge as Head of Talent Division

    Will Ward’s management company Fourward has promoted long-time colleague Christopher Burbidge to head the company’s rapidly growing talent division, while also promoting Brooke Blann to manager in the company’s music division. Both Blann and Burbidge are based in the company’s Los Angeles office and will continue to report directly to Ward. Burbidge works closely on [...]

  • Writers vs Agents Packaging War WGA

    Kaplan Stahler Agency Signs Modified Code of Conduct in Win for WGA

    Kaplan Stahler has become the latest agency to sign the Writers Guild of America’s (WGA) modified code of conduct in a win for the Guild. In a message sent out to WGA members today, the negotiating committee wrote that the agreement with Kaplan Stahler “bans packaging fees and agency-affiliated production companies and, through information-sharing, makes [...]

  • London's CODA Agency Formally Becomes a

    Paradigm Agency Formally Absorbs London's CODA Into the Fold

    After five years of working together, London’s CODA Agency has formally become a part of Paradigm and will continue under its U.S. partner’s banner. The London office of what is now a fully integrated Paradigm will continue to be led by Alex Hardee, Tom Schroeder, James Whitting and Dave Hallybone. In a statement otherwise laden [...]

  • WGA Agents Dispute Placeholder

    Agencies Seek to Hold Key Court Hearing Before WGA Elections

    The four major agencies asked a court on Monday to expedite a key hearing in the Writers Guild of America lawsuit, as the agencies seek to have portions of the case thrown out before the WGA’s internal elections in September. The WGA and the unions are still waging a legal and public relations battle over [...]

  • Sonja Plack Cocaine Possession

    'The Chi' Actress Sonja Sohn Arrested on Cocaine Possession Charge

    Sonja Sohn, the actress who appears on “The Chi,” was arrested over the weekend in North Carolina on a charge of cocaine possession. Sohn, best known for portraying Det. Kima Greggs on “The Wire,” was booked and released from the Dare County Detention Center in Manteo, N.C., according to a statement from the Dare County [...]

More From Our Brands

Access exclusive content