Under the deal, Wanda would leverage its ticketing platform, entertainment plazas and theme parks to promote Sony films to Chinese moviegoers.
Wanda could also showcase Sony films on its more than 2,000 screens in China, and, according to a person familiar with the arrangement, it will have the option to buy a small stake in some films it helps market, if Sony agrees.
“What (Wanda) could offer Sony is local market knowledge,” said Richard Huang, an analyst at Nomura Holdings Inc. “They could offer them a little more airtime for a specific movie, whether it’s the 007 or Spider-Man franchises.”
Wanda, for its part, can benefit from Hollywood’s decades of movie-making expertise, Mr. Huang said.
“What Chinese studios know are what people like, but they lack the know-how or a strong computer-graphics team,” he said. “It’s going to be a mutually beneficial partnership.”
The alliance is the latest foray into the global entertainment industry by Wanda’s billionaire founder, Wang Jianlin, who started as a commercial-land developer. Earlier this year, Wanda purchased Legendary Entertainment, a producer of summer blockbusters including “Godzilla” and “Warcraft,”
for about $3.5 billion.
Wanda is the largest cinema owner in China, and its AMC Entertainment Holdings Inc. is seeking to become the largest theater operator in the U.S. with its proposed acquisition of Georgia-based Carmike Cinemas Inc.
The Sony deal will move Wanda beyond exhibiting and co-financing U.S. films and into the critical area of marketing. Wanda said in a statement that it will continue seeking to “identify mutually beneficial opportunities” with all of the major Hollywood studios—Sony, Twentieth Century Fox, Paramount Pictures, Universal Pictures, Warner Bros. and Walt Disney Co.
“Wanda will strive to highlight the China element in the films in which it invests,” the company said.
The new alliance underscores Hollywood’s increasing dependence on the Chinese box office.
Studios weigh carefully how a film will play in China, and executives sometimes steer clear of topics such as homosexuality and the supernatural that tend to alarm the country’s censors.
Mr. Wang is well on his way to making his company a global force in entertainment. He was interested in acquiring a large stake in Paramount Pictures, but the resolution of a power struggle at parent company Viacom Inc. —which announced this week that it wouldn’t be selling off a piece of the studio—sidelined those ambitions.
For Sony, which has struggled at the box office, the partnership will help the marketing of films in a country that expects to surpass the U.S. as the world’s largest box office in the next few years.
Sony has a number of major releases hitting theaters in the next year, including the science-fiction drama “Passengers” with Jennifer Lawrence, the toy adaptation “Barbie” and a reboot of the 1995 board-game adventure “Jumanji.”
China limits foreign studios’ theatrical releases to 34 films a year, and restricts marketing, curbing Hollywood’s ability to promote films through traditional tools such as billboards and TV commercials.
The deal with Wanda doesn’t guarantee Sony will get more films into China, but a partnership with one of China’s biggest and most powerful companies can’t hurt. And Sony has nowhere to go but up.
It had the worst China box office sales of any of the big six Hollywood studios last year. The James Bond film “Spectre” earned a modest 542 million yuan ($81 million), while “Annie,” a musical comedy featuring Jamie Foxx, grossed 3.45 million yuan, one of the lowest for any Hollywood film.
This year, Sony’s big-budget remake of “Ghostbusters” was notably absent from China’s film slate, while the grosses from its next-biggest film, the mobile-game adaptation “Angry Birds,” didn’t even make China’s top 20.
Wanda’s knack for helping Hollywood films succeed in China was on full display this summer with another computer-game adaptation, Legendary’s “Warcraft.” A disappointing performer in the U.S., it earned more than $220 million from Chinese audiences, according to Box Office Mojo.
Wanda offered nearly 80% of its scheduling slots to “Warcraft” on opening day and more than 70% later that weekend. Other theater chains in which Wanda has financial interests also overwhelmingly showed “Warcraft.”
Source: Wall Street Journal by Wayne Ma and Erich Schwartzel