O'Melveny & Myers LLP represented Warner Bros. International Cinemas in an agreement just concluded with China real estate developer, Dalian Wanda Group, to co-develop and operate multiplex theaters in at least 15 Chinese cities, including Tianjin, Nanning, Wuhan, Harbin, Dalian, Shenyang, Beijing, Shanghai and Zhengzhou.
Under the agreement, Wanda will finance the cinemas, while Warner Bros will provide technical support and full-time operational and management services.
The Warner Bros. and Wanda agreement is the largest co-development deal for cinemas in China to date, and represents a continuation of Warner Bros. commitment to developing state-of-the-art, world-class multiplex cinemas throughout China. The deal is the first of its kind between a Chinese property developer and a Hollywood studio. Under new guidelines issued by China's State Administration of Radio, Film and Television (SARFT) that went into effect on January 1, 2004, foreign operators can hold a 75 percent stake in cinemas in seven major cities: Beijing, Shanghai, Guangzhou, Chengdu, Xi'an, Wuhan and Nanjing. Previously China had set a 49 percent limit on foreign ownership following entry into the World Trade Organization.