The weekend edition of The Wall Street Journal offers a report of Beijing’s decision to back out of a deal that would have put “Metro-Goldwyn Mayer Studios under Chinese control.” At first thought, the idea that the President of these United States might have offended Beijing to such sufficient point that the Chinese government decided to retaliate, irked this reporter. But then there is always the second thought, or the third, that any good reader might prefer to have answered – if only the question might have been asked on first pass.
With all the talk of the susceptibility of the American public to propaganda by foreign governments, one cannot help but to pause a moment to consider what an American movie studio might lose were the Chinese government to have exclusive control over MGM’s catalog, and if Beijing were to hold influence or censorship over the development of American cinema.
MGM is owned and operated by “private-equity firms”, and we all know how quickly Wall Street can aim its eye toward dollars, without much consideration of the wisdom of a thing. The article itself presents Beijing as a somewhat sympathetic figure, with millions and billions flowing from that one country into ours … primarily because Wall Street found willing and able investors overseas. The blame is not with the Chinese investor, rather the fault might be with the private-equity firm which keeps selling the investment be it out of need or out of lust for higher book returns.
The article implies China’s decision to enact stronger “capital control” regarding Chinese investment came just prior to the presidential election. The move might make sense in light of the uncertainty Trump brings to his White House (whether Trump’s Northern or Southern abode.) Practical sense might tell us it is not in a foreign government’s best interest at this time, to place money in the United States, especially considering how deplorably the Trump White House has treated the Chinese government thus far.
The article quotes an unidentified MGM spokeswoman as saying “MGM is in the strongest position ever and is not for sale.”
This may be well and true, or the public relations statement might be more reminiscent of a bridge sold somewhere in Alaska.
The entire article rings an alarmist bell about the Chinese government working to reduce investment in American media and film, makes a strong argument MGM was rooting for the deal, and then goes on to ignore entirely the fact that in April 2016, MGM announced an IPO in which it sought to “raise up to $1.2 billion” in that public offering. Asking for $1.2 billion seems a weaker position that one unidentified spokeswoman might care to admit.
The IPO itself begs the question of MGM’s historical yields since it offered 9,000,000 shares at $20.00 a share, in November 1997.
A cynic might suggest Beijing found America cinema a poor choice for investment based on returns to date. The Wall Street Journal phrases the parody as “the new dynamic highlights Hollywood’s dependence on China.” This frames the problem a bit too mildly, considering the anti-Chinese slant of the article in the face of a $1.2 billion requested save by a private American equity firm.
However, where this reporter has settled uncomfortably is with the idea that a government which strongly censures its people is not a government in the best position to offer assurances it would not censure American film, once it bought the old studio.
In light of the confusion over the Russian government’s influence over a U.S. presidential election via means of propaganda, the American public might want to think a moment about how influential film is in American history, and perhaps ask ourselves how much of our non-State owned media we are prepared to have Wall Street dole out in penny stock.
It should be said the above stated hypothesis bypasses entirely the enormous contribution Chinese film has made in the development of American cinema and culture, and visa versa. But then again, art is always art, and business is another thing entirely. Who knows? There is always the possibility that American investors might consider purchasing MGM, or of course, we could all revert to the old way, in which investors made investments in projects based on the quality of the darn thing.