The New York Times reports today that AMC Theatres, America's second-biggest movie theater chain, may soon be purchased by a Chinese company, the Wanda Group, which, as one of the biggest theater operators in China, is no stranger to the Chinese government's longstanding practice of censoring American movies. So what happens if they come to own such a large part of the American movie market?
The movie industry is booming in China, and this would be the first significant expansion it has made into the States. And while there have been plenty of Chinese companies that have bought big American ones -- Lenovo gobbled up IBM's personal computer business -- this might be the first time a Chinese company became a player in the U.S. entertainment and media sector.
There's no deal yet -- The Times says the talks are, for now, just talk -- but "according to people briefed on the discussions," the Wanda Group could buy or take a large stake in AMC, which is valued around $1.5 billion, from its current owners, a collection of financial firms including Apollo Investment Fund, J. P. Morgan Partners, Bain Capital Investors, the Carlyle Group. All parties are, no doubt, practical minded businesspeople, but one thing that private equity firms rarely have to deal with is Chinese censors' complaints about Hollywood movies. Wanda, as a successful theater operator, presumably has, and it seems like a situation ripe for professional awkwardness if Wanda were to show a censored version of a film in its Chinese venues while the unedited film plays at its American houses. (more)
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