BoxOffice® Pro - October 2012

EXECUTIVE
SUITE
EAST
MEETS
WEST
Wanda’s investment in AMC says good things about exhibition
in the United States—and also may help open China
John Fithian
President & CEO,
NATO
■ In May of this year, the Dalian Wanda Group Co.
Ltd. announced its agreement to buy AMC Entertainment
Holdings Inc. for $2.6 billion. The purchase
included about $2 billion in assumed debt and approximately
$700 million in additional investment over time
to improve AMC’s theaters, including upgrades to show
big-screen format and 3D movies and additional bars
and dining options.
Typically, I would not comment about the change in
ownership structure of any particular NATO member.
But this transaction has generated more media inquiries
than most—and I’ve also received questions from
a number of members who have asked me what this
transaction means about the current state and future of
our industry.
Some callers have wondered if the acquisition signals
an attempt by the Chinese to use “soft power” to influence
culture and policy in the United States. Others
have pointed out that this is the largest acquisition ever
of an American company by a Chinese company and
asked me if I am troubled by that fact. Still others have
not proposed any theories or factual scenarios but have
simply asked me what I think.
My first response is to challenge the inquiries in the first
place. Acquisitions and deals happen all the time. Why is
this one generating more attention? Is it because Wanda
Group Chairman Wang Jianlin, one of the richest men in
China, possesses extraordinary wealth? Well, no. Wealth
alone doesn’t seem to attract too much attention. Few asked
similar questions when billionaire Phil Anschutz bought
Regal, United Artists and Edwards in 2001 and put them
together into the biggest cinema company of all time.
Is it because the acquisition was made by a foreign
company? The answer must be more specific than that.
There was no similar suspicion when Sony, a Japanesebased
company, took a controlling interest in Loews or
when Australian company Hoyts created a cinema footprint
in the United States. And more recently, I haven’t
received any concerns over Cinepolis, a Mexican-based
company and the fourth-largest exhibitor in the world,
entering the U.S. exhibition market. Most members and
reporters with whom I have discussed those transactions
considered them to be parts of the normal course in a
global, competitive, free-enterprise system.
The subtle suspicions about Wanda’s acquisition of
AMC seem to be exclusively related to the fact that a
Chinese company is involved. Some Americans perceive
China as a looming threat to the cultural and economic
hegemony of the United States. China has the world’s
largest population with 1.35 billion people. China
maintains a political and cultural structure very different
from our own. And China enjoys one of the fastestgrowing
economies on earth. Some see something to
fear. I do not. In the Wanda acquisition of AMC, I see
something to champion.
WANDA’S INVESTMENT IN AMC DEMON-
STRATES CONFIDENCE IN THE AMERICAN
EXHIBITION INDUSTRY
First and foremost, Wanda’s investment should
confirm our confidence in the strength and potential
for growth in the American exhibition industry. Wanda
constitutes one of China’s largest real-estate companies,
with interests in hotels and department stores. Wanda
also operates 86 cinema locations in China, more than
any other exhibitor in that country. Simply put, Wanda
is a sophisticated company and is in the business to
make money.
8 BOXOFFICE PRO OCTOBER 2012