Wednesday, January 6, 2016

How Will Wanda's Deal With Legendary Entertainment Affect Players Tribune

In 2014, Derek Jeter launched an evolutionary sports media outlet exclusively produced by athletes known as The Players Tribune. The venture was created together with Legendary Entertainment.

Two years later, Jeter's partner is being acquired by a Chinese behemoth known as Wanda. Here is an analysis of why the acquisition is happening from Variety:

Like other Chinese players, Wanda has wanted to have a presence in Hollywood for several years. Its chairman Wang Jianlin has previously made statements about buying either Lionsgate or MGM, and is understood to have looked into acquiring DreamWorks. (Lionsgate last year tied up a major production finance deal with another Chinese company, Hunan Television.)
While it has been poring through the books of those companies, Wanda has also been eyeing film projects in Hollywood. Progress here has been slower, with indie boxing picture “Southpaw” its most recent co-investment. Legendary, which had a mixed 2015 with hits including its 25% interest in “Jurassic World” and flops including “Black Hat,” has a pipeline of movies going forward several years, and would represent a major scaling up.
Owning the majority of Legendary would be transformational, not just for the two companies concerned. It would be the first time that a company whose stock-in-trade is the tentpole movie business is owned by a Chinese parent.

Wanda owns AMC Theaters in the United States as well as a giant movie theater chain in China. Wanda is also heavily invested in international sports. They recently a European sports media company known as Infront Media, a stake in soccer team Atletico Madrid and the owner of Ironman Triathlons. The Wall Street Journal described what Infront Media does in a recent article:

Wanda would take on uncharted business territory with its move for Infront, which has held World Cup production rights, represents Olympic winter-sports federations and provides media and marketing services for the Chinese Basketball Association.
Infront is the exclusive sales representative for distribution of broadcast rights to the 2018 and 2022 World Cups, according to Infront’s website. The company also has sales-representative rights for FIFA events in 26 Asian territories, including China and India, from 2015 to 2022, Infront said. 
Wanda even owns a major movie studio complex in Qingdao, China worth $8 billion according to The Guardian. The company originally was founded as a real estate company but has rapidly transformed into a force to be reckoned with in the media world.

Legendary Entertainment has invested in both rounds of The Players Tribune's fundraising efforts. If they continue to have a role with the website after Wanda takes control, the ownership's capabilities could work to their advantage.

The ability to reach China could be the edge TPT provides versus other media outlets when an athlete decides where they want to post video or articles about their lives and careers. Wanda's relationships in the soccer world and Olympics could also help expand the kinds of athletes expressing themselves on TPT which would help further its international reach.

Wanda's movie theaters also give TPT a unique venue to distribute their video pieces before hit movies begin. Even though TPT is probably not at this point of development yet as an entity, if it decides to produce a theatrical documentary, the site would have access to physical venues worldwide where the movie could be released. A movie studio complex in China would TPT investor Kobe Bryant after retirement as he seeks to become a storyteller. Bryant could take advantage of his popularity in China to create a cross-border story.

The connections with FIFA do raise red flags because as we've discovered over the past couple of months, the business of soccer is extremely corrupt and dirty. It is unknown whether Infront or Wanda was involved in any extent and any suggestion at this point is only pure speculation. But it is something to keep in mind as more revelations about FIFA's wrongdoings continue pouring out.

Believe or not though, Wanda might be The Players Tribune's best bet in becoming an international force to be reckoned with if all the puzzle pieces end up coming together.

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