Sometimes these international buyouts of U.S. companies don’t quite go as expected…
Different customs and practices by the foreign buyer can bring eventual frustration and downright bitterness to the company being bought out. Remember Daimler-Benz and Chrysler?
Current American management may feel that they’re still in charge, but often times they’re really not. And that can be a hard pill to swallow.
Think I’m kidding?
Back in 1987 I was part of the management team of the now defunct Commonwealth Theatres, Inc. which was headquartered on film row in Kansas City. I was Commonwealth’s Director of Advertising, Publicity and Public Relations and we operated nearly 500 screens in more than a dozen states, many of which were twins, triplexes and fourplexes with about 100 were Drive-Ins.
In the greater Kansas City area we had, among others, the Ranch Mart, Bannister Mall, Metcalf, Antioch, Valley View, Trailridge and Crest and Riverside drive-Ins. Plus surrounding area theaters in Lawrence, Manhattan, Warrensburg, Junction City, Emporia, Sedalia, Clinton and Chillicothe.
Commonwealth, after a brief stint as a publicly traded company, had turned private again. But as these things sometimes go, current ownership wanted out and in 1987 found a buyer.
A foreign buyer.
It was THE CANNON GROUP, a film production company in Israel that had established a foothold in the U.S. with generally low-budget exploitation movies.
Its leaders, Menahem Golan and Yorum Globus, were known in the trade as "The Go-Go Boys."
Their plan was to expand Commonwealth to over 1,500 screens and accomplish it in a very short time frame.
I’ll never forget it.
Instead of holding our next annual managers meeting in Kansas City, Denver or Albuquerque, our new owners opted for Tel Aviv. I was to get the ball rolling, make the convention, flight and hotel arrangements and pretty much oversee the conclave.
To say I was overwhelmed is an understatement.
It never came off.
Cannon had overextended itself and six months later we had an Israel overseer placed in our K.C. office who first slashed jobs, then dramatically cut expenses. And we felt like we had to account for practically every box of paper clips.
In short, their traditional way of doing things sure didn’t match ours.
Commonwealth’s upper management here became mere puppets. It was a sad situation—and one that didn’t last much longer—as Cannon unloaded us to the United Artists circuit which eventually sold us off on a market by market basis.
By the time it was all over our home office staff of about 250 had shrunk to just 2-1/2 persons. Two full time and one part timer. I was among those last 2-1/2 souls.
So when I hear about China’s DALIAN WANDA GROUP buying out Apollo Investment, J.P. Morgan Partners, Bain Capital Investors, the Carlyle Group and Spectrum Equity Investors’ stake in AMC ENTERTAINMENT, I flash back to our buyout days and what eventually became of it.
Foreign ownership means different customs, traditions and and perceptions of business practices. It can make for unforeseen circumstances.
Today’s USA TODAY reporting on the deal from Beijing writes that Wang Jianlin, Chairman and President of Wanda, is "a Communist Party member who sits on his nation’s top advisory council."
USA TODAY also reports that the movie business there reflects the central contradictions of modern China, where the film world’s standard glamor and deal making must accommodate a ruling Communist Party that tightly controls what its citizens can watch. And that, "Beijing is investing heavily in projecting its ‘Soft Power,’ or cultural influence by boosting the Chinese state media’s presence abroad, including the USA, where the Chinese government has also run advertisements in New York’s Times Square."
AMC has a rich heritage and is a great motion picture exhibition company.
It’s expertise, knowledge and understanding of the business combined with Wanda’s desire to rapidly expand should make it the world’s top theater circuit.
And I wish them all the best under their new ‘East meets West’ company integration.