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Legendary buys out China's Wanda ownership stake

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Legendary buys out China's Wanda ownership stake

Film and TV production company Legendary Entertainment has bought out the remaining 50% stake owned by Chinese conglomerate Wanda Group, signifying a coda to China’s once-lofty hopes of becoming a major player in Hollywood.

The Burbank studio self-financed the transaction with cash on its balance sheet and did not use outside funding, Legendary said Monday. The company said it still has “significant excess liquidity” to finance its current business and planned expansion efforts. Legendary did not disclose the amount it paid to acquire Wanda’s stake, though company chief executive Josh Grode said it was a “very attractive price.”

Now that the buyout is complete, Legendary will be solely owned by company management and funds managed by private equity firm Apollo Global Management, which took a minority stake in the “Dune” and “Godzilla x Kong” studio in 2022 with a $760-million investment that helped buy down Wanda’s interest.

Last year, Legendary also got a five-year, $800-million loan led by J.P. Morgan.

“It’s just an exciting moment for the company,” Grode told The Times in an interview.

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With company management and Apollo now owning roughly equal amounts of Legendary and jointly controlling the board, “We’re now fully aligned to realize a lot of the value that we built in the business, and we can start to really explore strategic growth opportunities that may have been hampered a little bit by the international component of our shareholders,” Grode said.

Wanda acquired Legendary in 2016 in a $3.5-billion deal viewed at the time as an indication of the deepening ties between Hollywood and China. Wanda chairman Wang Jianlin said at the time of the acquisition that the company wanted to have a “position in the global industry” and had planned to build what it said was the “world’s largest film and television studio” in the eastern Chinese city of Qingdao.

But the company later retreated from those plans and faced greater headwinds breaking into Hollywood as the Chinese government clamped down on overseas investments, particularly those in the media and entertainment space.

Grode said the decision to buy out Wanda now was a “combination of factors,” including Legendary’s “significant amount of excess liquidity in the business.” (Wanda did not have voting control of the company.)

“They were a major shareholder in the company that was looking to monetize different assets, and we were in a position to be able to monetize their investment in the business,” he said.

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Founded in 2004, Legendary built a name for itself by investing in such films as “Batman Begins” and the “Hangover” movies. The company has had a successful string of hits recently with the “Dune” movies, as well as selling the Millie Bobby Brown-led “Enola Holmes” to Netflix.

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Former Outfest executive director Damien Navarro sues the organization

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Former Outfest executive director Damien Navarro sues the organization

Outfest, the struggling nonprofit that had hosted a prominent Los Angeles LGBTQ+ film festival, is facing a defamation lawsuit from its former executive director, Damien S. Navarro.

Navarro on Friday sued Outfest in Los Angeles County Superior Court, alleging he was retaliated against after he raised discrimination and ethics concerns to the group’s leadership.

In his lawsuit, Navarro said Outfest did not take his concerns seriously enough or conduct an adequate investigation. He said he was excluded from meetings and that board members allegedly spread misinformation about his employment status.

Additionally, he accused Outfest and current and former board members of wrongly blaming him for the group’s financial woes, which were detailed last year in a Los Angeles Times article. The nonprofit’s board voted last year not to renew Navarro’s contract.

“Instead of taking collective responsibility for Outfest’s financial predicament, the Board generally, and specific Board members, sought falsely to cast blame on Mr. Navarro,” according to Navarro’s lawsuit. “As Outfest was imploding, members of the Outfest Board threw Plaintiff under the bus and sought to make him a scape goat for their own malfeasance.”

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Outfest in a statement called Navarro’s claims “baseless and malicious.”

“Unfortunately, during Mr. Navarro’s leadership, the Outfest Board decided that it was in the organization’s best interest to bring in a new executive director,” Outfest said in a statement. “We remain committed to this decision as the best course of action for the organization and look forward to resolving this matter in legal proceedings.”

The lawsuit comes as Outfest is dealing with a financial deficit that has left it with just one employee — its interim executive director, Christopher Racster. The nonprofit was in turmoil last year, telling donors it was in “serious financial jeopardy” and needed to raise $750,000. It laid off its staff, including employees who decided to form a union.

Outfest, which began as a festival launched by UCLA grad students, had grown to attract thousands of people each year with its flagship summer film festival, which celebrated its 40th anniversary in 2022.

The organization branched out into other areas over the years, launching additional events such as the OutFronts, highlighting LGBTQ+ TV series; its Legacy Awards, which honored leaders and allies in the industry; and Outfest Fusion, which features voices from LGBTQ+ people of color.

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As The Times reported last year, multiple people close to Outfest’s leadership questioned Navarro’s actions as executive director, which they said contributed to the nonprofit’s problems.

In his lawsuit, Navarro said board members fell short of their individual fundraising commitments.

“The Board blamed Navarro while failing to meet even their undervalued commitments,” the statement from Navarro alleged. He added that directors failed to heed his warnings about the need to make tough decisions, including layoffs, and chose not to hold the Legacy Awards, a key fundraising event.

“The organization didn’t want to self-correct,” Navarro told The Times. “In fact, they just wanted to get me out.”

Board member Mike G. Rose disputed the claim, saying in an interview that the Legacy Awards weren’t held because there wasn’t enough money to front the costs.

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“If you know you can’t pay the bill, you don’t hold the event,” he said.

Lucas Bailey, Outfest board co-president, said: “We’ve been trying to deal with the financial mismanagement that we were left with, and have been rebuilding.”

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Video: Nobel Economics Prize Shared Among Three

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Video: Nobel Economics Prize Shared Among Three

new video loaded: Nobel Economics Prize Shared Among Three

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transcript

Nobel Economics Prize Shared Among Three

Daron Acemoglu, Simon Johnson and James Robinson received the prize for their work on explaining inequality between countries.

The Royal Swedish Academy of Sciences has decided to award Sveriges Riksbank Prize in economic sciences in memory of Alfred Nobel for 2024 to Daron Acemoglu, MIT, Cambridge, USA. Simon Johnson, MIT, Cambridge, USA. And James Robinson, University of Chicago, USA. For studies of how institutions are formed and affect prosperity.

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Recent episodes in U.S.

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El Segundo Boeing workers file whistleblower lawsuits alleging retaliation

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El Segundo Boeing workers file whistleblower lawsuits alleging retaliation

Late last year, Boeing employee Craig Garriott says a 4-ton satellite inside an El Segundo plant fell after engineers failed to properly secure a clamp.

No one was injured by the collapse of the $1 billion-plus satellite that happened over a weekend, but it could have been fatal if workers were present, Garriott claims.

The incident highlighted a raft of safety violations that were ignored by management, according to a whistleblower lawsuit that was recently transferred to federal court in Los Angeles.

In the lawsuit, the veteran Boeing employee alleges that his employer retaliated against him for speaking out about problems he saw at Boeing and Millennium Space Systems, a Boeing defense contractor that makes small satellites.

“I will say that this case is not just a case of retaliation,” said Leonard Sansanowicz, an attorney representing Garriott.
“The larger issues that we’re talking about are public safety, workplace safety and what’s being done with taxpayer dollars.”

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Boeing has denied the allegations in court papers, but declined to comment on the litigation.

The lawsuits come as the Arlington, Va.-based aerospace giant’s new chief executive, Kelly Ortberg, grapples with a strike by its machinists union and ongoing controversies over its manufacturing and safety practices — including how it treats employee whistleblowers who have alleged quality control and other problems.

In June, outgoing CEO Dave Calhoun admitted at a Senate hearing that whistleblowers have faced retaliation — saying “I know it happens” — with Boeing promising to take steps to fix the problem.

“This is another black eye,” Dan Bubb, a professor of history with a focus on aviation at the University of Nevada, Las Vegas, said of the lawsuits. “The punches just keep landing one after the other.”

Boeing acquired Millennium Space Systems in 2018 for an undisclosed amount.

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Garriott, 53, a technician who has worked at Boeing since 1997, alleges his problems began in 2017, when a supervisor at other Boeing operations in El Segundo asked him and others to sign off that work on a government contract had been completed, when it had not.

When he refused to do so, he said was derided by another manager for not being a “team player,” demoted and denied other work opportunities despite prior positive performance reviews, the lawsuit states.

After taking a leave from Boeing for several years to work for the Cabinet Makers, Millmen and Industrial Carpenters union, he returned to work in 2022 at Boeing and Millennium while also serving as a union steward.

He alleges that he made a series of safety complaints that lead to threats and retaliation against him, including one over thermal testing that was being done on equipment on nights and weekends, despite the danger of fire.

After speaking out, he claims he was verbally abused, physically threatened, accused of creating a hostile work environment and barred from work areas.

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Garriott’s spouse, Kathy Moonitz, 55, a Boeing quality inspector since 2021, also has sued her employer, alleging in a separate whistleblower lawsuit that she was collateral damage to her husband’s efforts to stem “pay to play” nepotism at the company.

She claims that after her husband filed a complaint in 2022 that a Boeing manager purchased a $10-million propellant system from a company owned by a family friend and then hired the owner’s child, she was falsely accused of making a bad purchase of welding materials.

Garriott and Moonitz continue to work at the company, said Sansanowicz, who represents both plaintiffs in the lawsuits. Several managers also are defendants in the litigation.

The lawsuits allege the stress of the retaliation has caused the couple to separate several times since their 2021 marriage.

This summer, Boeing successfully moved to have the lawsuits, originally filed in April in Los Angeles County Superior Court, transferred to U.S. District Court, arguing that they involved federal labor issues. Sansanowicz said the company’s procedural advantages in federal court include the requirement for a unanimous verdict in the cases. The plaintiffs are seeking to have the cases returned to state court.

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In April, Millennium received a U.S. Space Force contract valued at up to $414 million to build eight satellites capable of detecting advanced threats such as hypersonic missiles. The company’s CEO, Jason Kim, recently left and a successor has yet to be named.

Millennium is part of Boeing’s Defense, Space & Security unit, which saw the departure last month of its CEO, Ted Colbert. That followed challenges that included the ill-fated mission to ferry two astronauts up to the International Space Station on its new Starliner spacecraft.

After launching in June following repeated delays, the capsule returned remotely and uncrewed due to problems with its propulsion system. The mishap was particularly embarrassing since NASA decided to have Elon Musk’s Hawthorne rival SpaceX bring the astronauts back to Earth in February.

Boeing is also continuing to suffer fallout from the crashes of two of its 737 Max 8 planes several years ago, and more recently the blowout of a door plug last January on an Alaska Airlines flight to Ontario International Airport in San Bernardino County. Investigators found the plug on the 737 Max 9 aircraft was missing four bolts.

Attorney Tim Loranger, who is representing passengers on the flight who have sued Boeing, said the allegations in the Los Angeles lawsuits are consistent with union testimony at recent National Transportation Safety Board hearings on the door-plug blowout.

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“Boeing’s culture does not value employees’ involvement in safety issues, in issues related to quality assurance and they feel sort of isolated — and that really speaks very loudly to why it is that these problems are happening,” he alleged.

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