ENTERTAINMENT: Wanda Eyes Disney with $3.3 Bln Europark

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Bottom line: Wanda Group’s newly announced 3 billion euro Paris theme park is the latest in a string of its massive new investments, many of which are likely to collapse or get sharply scaled back due to lack of resources.

Chinese billionaire Wang Jianlin to builld Paris theme park

Billionaire real estate tycoon Wang Jianlin is growing fond of the “b” word these days, with yet another announcement of a multibillion-dollar investment. This time the Wanda Group chief is announcing plans for a $3.3 billion theme park in Paris that would rival the existing nearby resort owned by Disney (NYSE: DIS), which just happens to be revving up to launch its own first theme park on Wanda’s home turf in China.

If I sound just a little skeptical, it’s because I’m growing increasingly suspicious that Wang has become addicted to making big announcements that may never get completed. This particular deal comes less than 2 months after Wang said he would buy Hollywood film studio Legendary Entertainment for $3.5 billion. (previous post) Many are also guessing that Wang may bid aggressively for a strategic stake worth $1 billion or more in Hollywood major Paramount Pictures, which announced just last week it is looking for such a partner. (previous post) 

And for anyone whose memory doesn’t go back more than a few months, we should also point out that Wang made global headlines in 2013 when he flew a bevvy of A-list Hollywood celebrities to China to announce plans for a major new domestic theme park. That plan saw Wang declare he would build the park costing a whopping $8 billion in the coastal city of Qingdao, at an event attended by Nicole Kidman and Leonardo DiCaprio.

Anyone getting dizzy at all these big numbers is probably justified at feeling that way, since those 4 projects alone would total over $15 billion in investment — a heavy amount for anyone. But that said, we should still take a closer look at Wang’s latest theme park project, which is probably exactly what he wants as he seeks to draw more attention to his dreams of building a global entertainment empire.

Largest EU Investment

According to the reports, Wanda will team up with French partner Immochan to build the park on a site 10 kilometers northeast of Paris. (English article; Chinese article) Total investment in the EuropaCity park will be more than 3 billion euros ($3.3 billion), though there’s no word on the split between the partners. The partners are saying the park would represent the largest investment in the EU to date, and would include the theme park, hotels, a retail component and conference centers. 

This new investment would come as Wang is trying to diversify his company away from its roots as a real estate developer, as China’s property market shows rapid signs of cooling. His group already operates China’s largest movie theater chain, and is actively buying similar assets abroad, including his $2.6 billion purchase of US theater operator AMC Entertainment (NYSE: AMC) in 2012.

His move into Paris looks like a direct challenge to Disney’s theme park that’s also near the French capital, and could signal that Wang considers the US giant one of his biggest rivals in his global entertainment aspirations. Disney itself will open its first mainland Chinese theme park, Shanghai Disneyland, in June. That park is China’s most expensive to date with a price tag of $5.5 billion, though Wang’s Qingdao project is theoretically larger.

All of this brings me back to a point I raised at the start of this post, namely whether Wang is possibly announcing more projects than he can realistically complete. I would say the answer is definitely “yes”, and perhaps at least half of these mega projects will ultimately collapse or get significantly scaled back. I have quite a bit of confidence in Wang, who has shown a strong ability to close big deals. But I also think he may be getting a bit addicted to such deals, and will ultimately lack the time and resources to complete so many massive projects.

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