China's richest man came to Los Angeles on a mission -- to lure major film productions to his home country.
Wang Jianlin, the billionaire chairman of Dalian Wanda Group, has unveiled plans to offer a 40% production rebate for foreign and local movies and television shows that shoot at his new "movie metropolis" in the city of Qingdao.
The Chinese real estate and media company announced the program during a gala event Monday evening at the Los Angeles County Museum of Art. The festivities included speeches by Mayor Eric Garcetti and Academy of Motion Picture Arts and Sciences President Cheryl Boone Isaacs, both of whom heralded the prospect of more collaboration between Hollywood and China.
But all eyes were still on Wang, whose much anticipated visit marks his latest maneuver to become a global entertainment industry power-player. Wanda has spent billions of dollars in recent years scooping up movie and TV business assets, including No. 2 U.S. theater chain AMC Entertainment and Burbank production company Legendary Entertainment.
Speaking at LACMA's Bing Theater, he took pains to say that Wanda's ambitions would boost the U.S. film business — not erode jobs and local filming.
"This metropolis will actually increase opportunities for Hollywood," Wang said. "This is an opportunity for Hollywood, not competition for Hollywood."
The new incentives are part of a plan to boost production activity at Qingdao Oriental Movie Metropolis, a sprawling facility Wang announced in 2013 with ambitions of turning it into the "Hollywood of China."
The $8.2-billion project, with a projected 30 soundstages, was first announced at a star-studded event that drew studio executives, talent agents and big names such as Leonardo DiCaprio, Nicole Kidman and Harvey Weinstein.
Although China has quickly become the second-biggest film market in terms of box-office sales, it has not yet become a hub for U.S. film productions. Wanda is looking to change that.
A 40% rebate would easily place it among the most generous offers to filmmakers and studios looking to lower costs abroad. States including Georgia and Louisiana have implemented major incentives to draw Hollywood productions out of the Los Angeles area, as have countries such as Malaysia, the United Kingdom and New Zealand.
The incentive should prove attractive to studios aiming to reduce the financial risk of their would-be blockbuster films, said John Burke, head of the entertainment group at law firm Akin Gump Strauss Hauer & Feld.
"On its face, 40% is a very high percentage and it's going to attract a lot of people to come look at it," Burke said.
Still, it remains to be seen whether the heralded China studio will live up to the hype. Studios and filmmakers will need more details before moving huge movie shoots to China, including what kinds of production resources and services are available there, and how they will get their money back.
"At the end of the day, it's not just about money," Burke said. "The directors need to be sure they're going to be able to shoot something they're proud of."
The lucrative subsidy, totaling $750 million over five years, will be funded by the Qingdao government and Wanda. The money will help subsidize post-production, stage construction, equipment rentals and other services.
The first U.S. production planned to film there is Legendary's "Pacific Rim: Maelstrom," the sequel to the 2013 Guillermo del Toro film that performed poorly at the U.S. box office but scored strong business in China. Legendary also plans to make a "Godzilla" sequel there. Wanda earlier this year acquired Legendary for $3.5 billion.
Film companies have also been attracted by the promised awards of Chinese-American co-productions, which afford advantages to U.S. firms by exempting such films from the China government's quota on foreign movies. Legendary is preparing for the release of its big-budget co-production "The Great Wall," starring Matt Damon. The actor narrated a promotional reel during Wanda's presentation that touted the giant film studio.
Besides serving as a supersized moviemaking complex, the development also includes a theme park, an underwater stage, hotels and space for an annual film festival. The Wanda Studios facility is scheduled to fully open in August 2018.
Wang's visit to Los Angeles has been greatly anticipated amid a flurry of deals and acquisitions in progress. Wanda last month announced a pact to co-finance a handful of major Sony Pictures movies, and is in talks to buy Golden Globe Awards producer Dick Clark Productions. He has also stated his goal to eventually buy a major U.S. movie studio.
The aggressive moves by Wang, who is worth an estimated $32.5 billion and has ties to the communist Chinese government, has attracted scrutiny from U.S. lawmakers concerned about the country's potential influence on American media companies.
Wang, in his remarks, cautioned that his calls for more "Chinese elements" in Hollywood movies were purely motivated by business, not politics. Nonetheless, he stressed the need for greater attention to the growing market of Chinese moviegoers.
"You cannot just put films into the Chinese market and disregard Chinese tastes and preferences," he said.
He also criticized Hollywood studios for relying too much on sequels and remakes, a sentiment that many in the audience applauded.
"We have to make Hollywood go back to storytelling," he said.
Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder
7:30 p.m.: This article was updated with additional comments from Wang Jianlin and further details of the 40% rebate.