The movie finance and marketing deal between Sony Pictures Entertainment and Wanda has come to an end – another victim of the troubles that have recently beset the Chinese property-to-entertainment giant.
In emails to Variety, Sony confirmed that the deal, struck last year, had run its course and would not be renewed. “It was always intended to finish after ‘The Emoji Movie,’” an SPE spokesman said, without providing further details. Wanda declined to comment on the deal, which saw it back “Passengers” and “Smurfs: The Lost Village,” among other titles.
The agreement was unveiled in September 2016, at a time when several Chinese companies were still on the lookout for ownership positions in Hollywood studios and in individual Hollywood movies. Wanda was in the ascendant and, while striking the Sony deal, was also negotiating to buy a significant minority stake in Paramount, and in the advanced stages of buying exhibitor Carmike through AMC, its separately listed North American cinema chain. The following month, Wanda bid $1 billion for Dick Clark Productions.
Wanda and Sony’s “strategic alliance” included equity co-financing for “a number of Sony Pictures’ upcoming high-profile releases in China,” the two companies said at the time. “Wanda will provide its massive consumer-facing infrastructure in China to bolster Sony Pictures’ commitment to broaden its global presence.”
Wanda owns the largest chain of cinemas in China, many of which are based in its upscale shopping malls. It also owns film marketing companies China Movie Media and Mtime, which were to throw their weight behind promotion efforts for Sony titles. Sony’s studio movies are released in China through state-owned distributors China Film Group and Huaxia Distribution.
But Wanda’s overseas ambitions – in particular, chairman Wang Jianlin’s Hollywood dream – came to an abrupt halt just a few months later. The Chinese government has cracked down on Wanda’s foreign activities through the introduction of capital controls that specifically target film, entertainment, hotels and sports, sectors in which Wanda had been expanding. Chinese regulators have also erected other barriers that restrict Wanda’s ability to move money outside China.
The deal with Sony is one of the casualties of Wanda’s increasingly limited room for maneuver.
Now, overseas assets may be up for sale in order to bring in capital to Wanda. British newspapers have reported that the AMC-controlled cinema businesses in Europe, made up of acquisitions Odeon-UCI and Nordic Cinema Group, are being lined up for an IPO.
Beyond entertainment, Wanda is also facing speculation that a large portion of its overseas real-estate business is on the block. In recent days, Chinese and local media have reported that the company is trying to sell properties in London, Los Angeles, Chicago, Sydney and Australia’s Gold Coast to a third party for $5 billion.
Wanda denied those reports on Tuesday in an announcement to the Hong Kong Stock Exchange through its listed subsidiary Wanda Hotel Development. “The media reports are untrue because the company has not entered into negotiations with any third party regarding the sale of the group’s property projects for US$5 billion,” the statement said. But it added: “Following the recent changes in some directors of the company, the company is undertaking a strategic review of its property projects and will consider any business opportunities.”
Within China, Wanda has been scrambling to pay down massive amounts of debt through asset sales and refinancing initiatives. Over the summer, it sold a portfolio of hotels and leisure developments to fellow Chinese developer Sunac China – a disposal that included the massive film-studio complex Wanda is building in Qingdao.