The Guinness World Record for the longest running cinema belongs to a former tea house in Beijing, where high society once watched Chinese opera over tea and dim sum.
It was run by Ren Qingtai, a local tycoon who also managed a studio that took photos of members of the Qing Dynasty’s royal family. At the time most of China’s cinemas were run by foreign businessmen and the movies were largely from overseas. But in 1903 Ren filmed excerpts from the traditional opera The Battle of Mount Dingjun and showed them in his tea house. The moment was historic – it was the first ever Chinese movie – and Ren began showing other films at the tea house, calling it Daguanlou Theatre (Daguanlou translates from Chinese as ‘the building with a big view’). The cinema is still operating in its original location today.
Today the most influential tycoon in Chinese cinema is probably Dalian Wanda boss Wang Jianlin. That’s especially true after his decision to splash another $1.2 billion in order to build the world’s largest cinema chain.
Wanda’s US-based theatre unit AMC announced last week that it has agreed to buy Odeon & UCI Cinemas Group from British private equity firm Terra Firma. The Odeon & UCI group has 2,236 screens in 242 sites in the UK, Ireland and Europe, and it sells more than 90 million tickets a year. Adding the purchase to AMC, which Wanda took over for $2.5 billion in 2012, will amount to a business with 627 theatres and more than 7,600 screens in eight countries.
AMC cinemas outperform the Odeon & UCI chain in revenue per location, in part because they average more screens per theatre. But the Odeon & UCI does worse in revenue per screen as well, and AMC hopes to boost income by introducing reclining seats and premium food and beverage menus, which have spruced up its sales performance in the US, despite limited growth in ticket sales
AMC is also trying to buy Carmike Cinemas for $1.1 billion. But the biggest shareholders of what is the fourth-largest cinema chain in the US have been holding out for a higher price and will vote on the current $30-a-share offer next week. Adam Aron, AMC’s chief executive, has warned that he won’t pay any more. Here he has form: he also threatened to walk away from the Odeon deal at one point last year.
However, the tumble in the value of sterling since last month’s referendum on leaving the European Union has played into Wanda’s hands, with Aron describing the deal as an “opportunistic transaction”.
The Wall Street Journal also reported last week that Wanda is interested in buying a 49% stake in Paramount Pictures, with the studio’s leading shareholder, Viacom, valuing Paramount at $8 billion to $10 billion. This follows Wanda’s $3.5 billion buyout of another American studio Legendary Pictures in January, which marked Asia’s largest deal in Hollywood since Sony’s takeover of Columbia Pictures in the late 1980s.
The flurry of transactions is further evidence that Wang wants to deploy more of the cash from his highly leveraged conglomerate overseas. In spite of the deals he’s shown little interest in bringing Chinese movies to American and European studios. At home, however, Wanda has just been accused of sabotaging a rival studio’s new release. Huayi Brothers’ new animation Rock Dog debuted on July 8 but Wanda arranged just seven showings of the cartoon, according to local media, putting it on 0.3% of the available screens within its cinema network.
“Many industry watchers are speculating that the reason for the underwhelming screening arrangement is Wanda’s way of exacting revenge on Huayi Brothers for successfully poaching executive Jerry Ye from them in March,” China Film Insider has reported.
Keeping track: We mentioned that AMC had been in longstanding talks with Carmike Cinemas, another large US theatre chain. At the time, AMC had made an offer but some of Carmike’s larger shareholders had rejected it as too low. AMC’s boss Adam Aron had said he would not pay any more than $1.1 billion (a figure that includes Carmike’s debt) or $30 a share. But it seems that was a bluff, as on Monday, July 25, AMC upped its offer to $33.06 a share, equating to a bid price of $1.2 billion. The extra cash may be enough to get the deal done, with Carmike’s board unanimously approving the new offer and recommending shareholders vote to take it. Carmike is the fourth largest cinema chain in the US.
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