On a sweltering day this summer, a handful of protesters gathered outside an AMC cinema in Times Square, New York, holding red signs proclaiming “AMC = American Movie Communists”. They were opposing giant cinema company AMC’s US$1.2 billion purchase of a rival chain, Carmike, which has cinemas in 41 states. The deal, which is still subject to government approval, would make AMC the largest cinema chain in the United States.
The protesters targeted AMC’s Chinese owners – the sprawling real-estate and entertainment company Dalian Wanda, which acquired the American cinema chain in 2012, creating the world’s largest cinema empire. The protest suggested the Carmike acquisition would further extend Beijing’s hidden control over American mass media.
But the protesters had not gathered on their own volition. They were being paid to be there by Washington lobbying firm Berman and Company, which is waging a war against Chinese acquisitions of American cinemas.
It was an example of the many unexpected ways a quiet battle is being fought to halt a trend of Chinese businesses gobbling up American companies. The battle’s reach now goes beyond traditional areas with obvious national-security implications – such as President Barack Obama’s decision on December 2 to block the acquisition of a semiconductor company involved in sensitive technology – into more surprising areas such as cinemas, where concerns about financial ownership collide with issues of cultural openness.
Berman and Company, which uses a network of organisations to carry out campaigns on behalf of anonymous clients, is led by Rick Berman, a veteran lobbyist who television news programme 60 Minutes once called “Dr Evil”, for his defence of issues such as second-hand smoke, trans-fats, tanning beds and payday loans. For decades, his firm has launched ad campaigns to attack targets like the Humane Society, labour unions and Mothers Against Drunk Driving.
The new campaign, called “China Owns Us”, is nominally run by the Centre for American Security, a registered trade name for a non-profit called the Enterprise Action Committee, according to Washington corporate records. A small group of people employed by Berman’s K Street lobbying office run these and dozens of other similarly structured organisations, the veteran lobbyist said in an interview.
To drum up opposition to Chinese acquisitions in Hollywood, Berman’s operatives purchased two billboards this summer calling AMC “China’s Red Puppet” – one on Los Angeles’ Sunset Boulevard, another outside AMC’s Kansas headquarters. Berman and his groups wrote opinion pieces, produced YouTube videos, appealed to think tanks and hired a lobbyist to reach out to Congress, Berman said, to warn people of China’s insidious influence.
Berman says he fears Dalian Wanda could use its cinema screens to subtly influence people’s views about the US and China. He compares political messages in films to a can of Coca-Cola sitting on the table in a film, or James Bond driving an Aston Martin.
“What I’m trying to do is stop somebody else from managing the culture here,” Berman says.
AMC’s chief executive, Adam Aron, says those concerns were unwarranted.
“AMC is completely run by its American management in Leawood, Kansas, as American as an American place in the heartland you can find,” he says. “We’re in the business of selling movie tickets and popcorn, and we don’t involve ourselves in what goes on in China.”
Berman says he has helped foment concern on Capitol Hill about the issue. In September, 16 Congressmen sent a letter asking the government to re-examine the role of a federal committee known as the Committee on Foreign Investment in the US (CFIUS), in determining whether deals such as Wanda’s takeover of AMC and Carmike undermine national security. Another congressman sent a letter urging the Justice Department to reconsider whether Chinese media influence should be regulated under the same rules as foreign lobbying.
On December 2, Democratic Senator Charles Schumer sent a letter to the Treasury secretary and the US trade representative urging the government to more closely examine Chinese acquisitions in the US, including those by Dalian Wanda.
“I am concerned that these acquisitions reflect the strategic goals of China’s government and may not be receiving sufficient review,” Schumer wrote.
Officials on Capitol Hill acknowledge meeting with Berman and his associates, but say they have been motivated by pre-existing concerns about Chinese national-security threats.
“It would be incomprehensible to me to turn a blind eye and think all is well with China,” says Republican Congressman Robert Pittenger, the lead signature on the CFIUS letter.
It’s unclear who is funding Berman’s campaign. Berman says he launched it himself, out of personal interest, and only later received a “modest contribution” from two donors, whose names he won’t reveal but whom he describes as wealthy people who “care about national-security issues”.
“What matters is whether or not what I’m saying is right. And if it’s right, it doesn’t matter that somebody gave me the money to go out and say it,” he says.
But several industry experts point to Berman’s past ties with Philip Anschutz, a conservative billionaire who has a controlling stake in Regal Entertainment Group, which owns America’s largest cinema chain – at least until the AMC-Carmike deal goes through.
“The odds are that it’s the filmmaking community. They certainly have a dog in this fight,” John Carroll, a communications professor at Boston University who has blogged about Berman’s advertising tactics, says of Anschutz and Regal Entertainment. “But Berman resolutely refuses to reveal his donors.”
Tax records indicate that the Anschutz Family Foundation has given hundreds of thousands of dollars to Berman’s charities. Anschutz also owns the Weekly Standard and the Washington Examiner, where Berman has advertised and written about his China campaign.
“The relationship I have had with Phil has generally been over employment/union issues. It does not extend into this area,” Berman says, in an e-mailed response.
The Anschutz Family Foundation and Regal Entertainment did not respond to repeated requests for comment.
Shareholders have already approved the AMC-Carmike deal, and it is expected to close in the next few weeks unless US regulators intervene. In addition to an anti-trust review by the Department of Justice, CFIUS could rule that the deal threatens US national security.
Chinese investment in the US entertainment industry skyrocketed to US$3.7 billion in the first three quarters of 2016, up from US$1.1 billion in 2015, according to research and advisory firm Rhodium Group.
Dalian Wanda is the most prominent among the Chinese companies that have been on a buying spree in Hollywood in the past few years. Wanda purchased Legendary Entertainment, one of Hollywood’s biggest film-production companies, for US$3.5 billion in early 2016. The company has a pending deal to buy Dick Clark Productions, the TV producer for the Miss America pageant and the Golden Globe awards. AMC inked a deal in July to acquire the Odeon & UCI Cinemas Group, the largest cinema chain in Europe.
Executives at AMC and Dalian Wanda say Chinese political interests do not influence what’s shown in American cinemas.
“There is no political point of view,” Wang Jianlin, the chairman of Dalian Wanda, who is also China’s richest man, told a crowd in Los Angeles in October. “I am a businessman.”
Others in the film industry, such as Hollywood producer Janet Yang, attribute the backlash against Chinese media control to xenophobia and discomfort with China’s rising global power.
“If you grew up on John Wayne or Clint Eastwood or superhero movies, or these very powerful iconic pieces of content, that does affect what you think the world order looks like,” she says. “That’s a paradigm shift; some people can’t handle it.”
But some film-industry executives and academics say the acquisitions warrant more scrutiny, partly due to Wang’s extensive ties with China’s military and top leaders.
China tightly controls its own domestic media to ensure that the press, film and other media portray the Communist Party in a positive light, and it allows only 34 foreign films to show in its cinemas each year. Domestic and Hollywood films that are critical of Beijing or highlight sensitive topics such as Tibet or Taiwan, for instance, have little chance of reaching China’s lucrative cinema market, which by some estimates overtook the US as the world’s largest this year.
Aynne Kokas, a media studies professor at the University of Virginia and the author of Hollywood Made in China, says Americans should consider the possibility that Wanda could one day use its massive distribution network to suppress a film that was critical of China.
“Would that happen? We can’t be certain. But the fact is that the possibility is significant, and given the nature of film distribution in China, it’s not actually that far off,” she says.
Some say China’s influence has already reshaped production in Hollywood. To cater to China’s lucrative audiences, some Hollywood filmmakers have added Chinese stars to the cast, as in Iron Man 3 (2013), or relocated scenes to China, as in Looper (2012). Concerns about Chinese censors led filmmakers to remove China as the origin of a zombie virus in World War Z (2013) and swap North Korea for China as the main antagonist in Red Dawn (2012). It even led to the removal of a scene in Skyfall (2012) in which James Bond kills a Chinese security guard, a report by the US-China Economic and Security Review Commission says.
Robert Daly, director of the Kissinger Institute on China at the Wilson Centre, says there is no evidence as yet that Wanda is changing what Americans see. The push in Congress to regulate media investments is “a very dangerous notion”, he says. “It would be a gross infringement on our cultural freedom if we couldn’t see good Chinese films because Congress had determined that a Chinese film threatened our cultural security.”
On the other hand, Daly says, the US has never confronted a potential security threat quite like this before.
“With China, you’ve got authoritarianism and purchasing power in one nation.”
The Washington Post