Wanda’s $1 Billion Bet to Transform Legendary Into Global Media Giant

Mary Parent and Jack Gao, Legendary

Give the Dalian Wanda Group this much: It is nothing if not brash. Much of Hollywood did a double take when the Chinese conglomerate shelled out $3.5 billion for Legendary Entertainment last year. Jaws dropped further when Wanda announced it was paying $1 billion for Dick Clark Prods. — a deal so exuberant that the Chinese government was moved to kill it.

After that, one might expect Wanda to lie back and lick its wounds — especially since the Chinese government has moved to tamp down overseas investment across the board. Instead, the company is doubling down.

In an exclusive interview with Variety, Jack Gao — the company’s overseas point man — lays out Wanda’s typically aggressive vision for rebooting Legendary and transforming it into a global media player.

“By 2020, Legendary will be one of the top five studios in the world,” Gao predicts.

To most of Hollywood, this is hyperbole on an industrial scale. Legendary is a production company in search of a CEO and a much needed comeback. Thomas Tull, who founded Legendary and sold it to Wanda, exited in January after some costly box office misses.

Jack Gao

Legendary sought to land former 20th Century Fox studio chief Jim Gianopulos, but after a sustained courtship, Gianopulos opted to go head Paramount.

Gao is running the company as interim CEO while still keeping an eye on Wanda’s other overseas ventures, like AMC, the world’s biggest theater chain. He’s working alongside Mary Parent, Legendary’s head of production. In typical Chinese fashion, they’re developing a “five-year plan” that will make Legendary a leader in global entertainment.

To some extent, the two are starting from scratch. Legendary lost $346 million in 2014 and $560 million in 2015, according to regulatory filings. Its 2016 releases, “Warcraft” and “The Great Wall,” did not meet expectations. “Kong: Skull Island” fared better, grossing $559 million since its March 2017 release.

The first project greenlit under Parent’s reign will be “Skyscraper,” a co-production set in Hong Kong and starring Dwayne Johnson. She has sought to diversify the company’s offerings, bringing in projects from Adam McKay and Will Ferrell.

“Great content comes in different shapes and different sizes,” Parent tells Variety. “Not everything has to have a China bent. It’s great story, great characters.”

Though “The Great Wall” grossed only $45 million in the U.S., Gao says the film was a milestone for co-productions.

“That broke the saying that co-productions would never work,” he maintains. “Nobody doubts it anymore. Through that process, we have learned a lot. There will be more.”

With the collapse of the DCP deal, Legendary has found itself having to reassure people it can move money out of China. Gao says Wanda has committed $1 billion to Legendary, of which $320 million has been spent. Legendary has a co-financing deal with Universal that expires in December 2018, and it may seek other investors for some projects.

“We have the capital,” Parent says. “We have the ability, if we want, to fully finance, or if it makes sense, to find a strategic partner. The business plan doesn’t require needing a partner to make a movie.”

Mary Parent

Gao says plans are not contingent on an IPO in China. Wanda attempted to take Legendary public on the Shenzhen Stock Exchange last year, but successive losing quarters made that impossible.

“We’re not really at the moment in a hurry to do it one way or the other,” Gao says.

Gao declines to divulge particulars of the five-year plan, but the company has a long way to go if it wants to become a top-five studio. Its expectation to release four films in 2018 counts two — “Jurassic World 2” and “Mortal Engines” — that are Universal films co-financed by Legendary. Beyond that, Parent says she doesn’t feel pressure to greenlight a lot of films to meet an artificial target.

“We have the ability to make what we want,” she says, “but I don’t have to have a movie every single month.”

Parent maintains it would be better to say that Legendary will be a top-five “global media company” by 2020 rather than a “studio,” without spelling out
precisely what that means. She alludes to VR — Legendary will have a virtual reality installation at the upcoming Cannes Film Festival — and possibly leveraging
Wanda’s real estate assets in China as growth engines.

Parent also stresses that she has made a conscious choice to stay on at Legendary, amid widespread industry speculation that she might be looking for an exit.

“At this point in my career, I wanted to be in a place where I feel I can do my best work,” she says, adding that Wanda is leading the globalization of the business rather than worrying about how to navigate it. “They’re in this for the long term. To be part of a company that views our business that way, that embraces the opportunity, as opposed to seeing everything through a lens of fear and paralysis, for somebody like myself, is Shangri-la.”