Wanda’s U.S. Theater Flagship Offloads Oscar-Winning Studio
AMC Entertainment Holdings Inc., the cinema operator controlled by China’s Wanda Group, said it has sold its 50% stake in Open Road Films, a struggling independent Hollywood studio whose credits include the Oscar-winning film “Spotlight.”
The modest sale comes five months after Wanda’s attempts to buy the much-larger Dick Clark Productions studio for about $1 billion collapsed, and as Wanda sells off some of the largest assets from its traditional real estate portfolio to pay down debt from a massive domestic and global expansion spree.
AMC said it and co-owner Regal Entertainment sold Open Road for a relatively modest $28.8 million to Tang Media Partners, according to an announcement and stock exchange filing in the U.S. on Tuesday.
Founded by financier Donald Tang, the buyer has offices in Los Angeles and Shanghai, and is reportedly backed by the likes of Chinese internet giant Tencent Holdings Ltd. and major media investor China Media Capital, according to the Hollywood Reporter.
AMC said it received $14.4 million from the sale, and has signed a new marketing agreement with Open Road following the deal. It added that Open Road recorded losses in the first two quarters of this year.
“The sale of our ownership stake in Open Road is consistent with our plan announced this past Friday to identify non-strategic assets, all together totaling $400 million, that can be monetized over the next 24 months. Implementing that plan has now begun,” AMC CEO Adam Aron said in a statement.
“Spotlight,” the Oscar-winning film about a team of investigative journalists in Boston, has been one of Open Road’s standout films, earning $88 million worldwide, according to movie-tracking site Box Office Mojo. But like other similar independent studios, the company has failed to earn profits on a consistent basis.
Meantime, AMC’s controlling stakeholder, Wanda Group, made headlines in China last month after announcing a deal to sell its core hotel and theme park assets for 63.75 billion yuan ($9.5 billion) to two separate buyers. That deleveraging follows a buying and development spree that saw Wanda purchase billions of dollars’ worth of assets, including AMC for $2.6 billion in 2012, and U.S. studio Legendary Entertainment last year for $3.5 billion.
As Wanda sells some of its major directly-owned assets, AMC has tried to distance itself from its controlling stakeholder, saying it hasn’t depended on its Chinese parent to finance its own recent string of acquisitions.
Contact reporter Yang Ge (firstname.lastname@example.org)
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