Two days after the abrupt exit of Thomas Tull from the Legendary Entertainment company he founded, Legendary’s Chinese owner Dalian Wanda said that the move reflects expansionary change not dissatisfaction with Tull or recent release “The Great Wall.”
“’The Great Wall’ has just begun its worldwide release, and it has not yet been released in the North American region. Its so called failure is a fiction,” Wanda said.
Tull announced his resignation as CEO on Wednesday (Chinese time), with Jack Gao, senior VP of Wanda’s Cultural Industries group taking over as caretaker. It is understood that Wanda has held preliminary talks with Jim Gianopulos, former head of distribution at Fox, as a possible replacement.
Wanda broke its silence on the matter in a three paragraph Chinese-language statement sent to Variety Friday afternoon. “Wanda will release big news concerning the film industry soon,” it said.
In his annual work report a week ago, Wanda chairman Wang Jianlin pointed to Wanda’s ambition to control 20% of the global cinema market, something that he believes will give it ample bargaining power when negotiating with the six major Hollywood studios. Speaking this week in Davos at the World Economic Forum, Wang said that Wanda is planning $5-10 billion of overseas deals this year, with the major focus on entertainment and sports.
Wang has made no secret of his desire to buy a Hollywood studio. But recently he said talks were not making progress as there few willing sellers.
Wanda bought Legendary in early 2016 for up to $3.5 billion, a price tag that baffled many in the industry. Concerns that it had overpaid appeared to be confirmed when a regulatory filing showed that Legendary lost hundreds of millions of dollars in 2015.
In 2016, Legendary’s two film releases in China both scored big box office numbers. “Warcraft” was at its most successful in China with $221 million, compared with $47.3 million in North America. Its December release of the Zhang Yimou-directed “The Great Wall” has achieved close to $166 million (RMB1.14 billion), making it one of the biggest films of 2016. That figure was below some estimates, though the 2016 slowdown at the Chinese box office makes comparisons tricky.
With a reported production budget of $150 million, “The Great Wall” still needs to do well in other territories. To date it has grossed more than $40 million in ongoing theatrical release in Asia and Europe. Its North American outing, handled by co-financier Universal Pictures, is set for Feb. 17.
Wanda previously attempted a restructuring of its film businesses in the months that followed shortly after the Legendary acquisition. That corporate reshuffle was to have seen some 20 outside companies provide investment for Wanda Pictures. However the deals were halted by regulators, who expressed concern over the financial visibility of the maneuvers.
That is a pattern which has played out previously. Two years earlier, regulators halted the IPO of film exhibition unit Wanda Cinema Line, only for Wanda to present new accounts and list the company on the Shenzhen stock exchange in January 2015.
Despite a dramatic retreat in the value of Chinese stocks in 2016, Wanda Cinema Line is valued at $6.80 billion (RMB46.9 billion) compared with the $3.45 billion market capitalization of AMC Entertainment, the U. S. theatrical market leader which Wanda also controls.
SEE ALSO: Jim Gianopulos in Early Talks With Wanda for Legendary Post