Hollywood is all aflutter over the recent purchase of Legendary Entertainment and armchair financiers are already predicting a major threat to the Hollywood way of life as foreign investment moves in and fears rise about an all-American institution being assimilated by a foreign culture. But are these kinds of fears actually justified?
While the US$3.5 billion purchase came as a surprise to some, the Wanda Dalian Group, despite its origins in communist China, is acting in a very methodical, sensibly capitalist American way. China itself has a vast consumer population that is hungry to absorb more media and few groups on earth have the experience to do this as quickly and successfully as a Hollywood studio. Moreover, the Chinese conglomerate already has a stake in the success of American films as it purchased AMC Entertainment in 2012, hardly the type of move that would be made for nationalist interests.
The most interesting questions about the motives behind the Legendary Entertainment purchase surround the group’s chairman Wang Jianlin. A kneejerk reaction to a foreign investor moving in, especially one ostensibly from a communist nation, is that there is a political motive at work, and that Wang will attempt to use his massive media infrastructure to bring communist propaganda to the west.
However, the reality is far more mundane. The Wanda Dalia Group has been making the kind of business decisions that are more consistent with trying to generate profits, not promote communist dogma. And many extremely successful Chinese corporations invest heavily in foreign companies—and luxury real estate—not as an attempt at economic or cultural conquest, but as a way to safely transfer funds out of China.
The Chinese economy itself is slowing down as its massive appetite for industry finally seems to be satisfied. Because of this, there is less stability in the country, and for the wealthy Chinese elite in successful businesses, it makes more sense to move money out of potentially unstable economy and into areas and industries with more prospects.
There’s every chance, in other words, that the Wanda Dalia Group is not so much interested in bringing China into American culture, as it is keeping their own Chinese money in a more stable, American financial environment. Foreign investment, in Hollywood, in other words, may simply be a Swiss bank account to some Chinese business interests.
It will be interesting to see how this unfolds. Sony purchased Columba Pictures in the 1980s, and that studio still contributes quality pictures even today. Will Legendary Entertainment do the same? Only time will tell.