The $1 billion sale of Dick Clark Productions to China's Dalian Wanda Group should close in the coming weeks, according to a source close to the transaction.
Dalian Wanda's ability to complete the deal has been held up by Chinese government officials concerned about capital outflows from the country, the source said. Although $1 billion may not seem like a large amount of money for a real estate and entertainment company the size of Dalian Wanda and its owner, Wang Jianlin, China's richest man, the high-profile deal involving a Hollywood production company has attracted outsized regulatory attention within the country.
The deal between Dick Clark, the Santa Monica, Calif., producer of the Golden Globe Awards, the American Music Awards and other entertainment events; owner Eldridge Industries; and Dalian Wanda was agreed upon in October with the expectation that it would close sometime in February. But expectations now are that the deal will close in the "next few weeks," the source said, adding that neither side is seeking to renegotiate terms of the deal.
Eldridge is a holding company of real estate, financial services, insurance and entertainment properties controlled by Todd Boehly, the former president of Guggenheim Partners. Eldridge's other media assets include The Hollywood Reporter, Billboard and film distribution company A24. Its other holdings include Security Benefit Life Insurance and investment company Cain Hoy.
A representative for Dick Clark Productions declined to comment on the deal, and a representative for Dalian Wanda couldn't be immediately reached for comment.
Although Dalian Wanda has already made some payments to Eldridge to ensure the transaction, the holdup appears to be the result of Chinese misgivings of allowing more money to leave the country. China's foreign exchange reserves fell below $3 trillion last month for the first time in six years, triggering government concerns.
Difficulties in closing the deal comes as President Trump has threatened to enact policies that could spark a trade war with China and U.S. political leaders has voiced their own concerns about the increasing Chinese ownership of U.S. entertainment companies.
In September, former U.S. Comptroller General Gene L. Dodaro urged the Government Accountability Office to study whether "the definition of national security be broadened to address concerns about propaganda and control of the media and 'soft power' institutions." Also last fall, 16 members of Congress issued a statement calling for greater oversight of foreign ownership of high-profile media corporations.
Yet the source said U.S. officials have not taken any steps to block or stall the transaction.
If Dalian Wanda does succeed in buying Dick Clark Productions, the acquisition would add to its growing presence in the U.S. entertainment industry, which already includes AMC Entertainment Holdings (AMC) - Get Report, the world's largest theater chain, and Legendary Entertainment, a producer of big-budget films, which it acquired a year ago for $3.5 billion.