IMAX signs largest deal in history, Wanda adds 150 IMAX theaters

　　IMAX Corporation and IMAX China Holding Inc. and Wanda Film’s joint stock company today announced the signing of the largest IMAX-ever agreement to build 150 new IMAX cinemas in 002739.SZ. Under the agreement, the cinemas will be built and distributed across China over a six-year period starting next year, with 110 to be installed by the end of 2020.

　　The deal builds on a long-standing partnership dating back to 2007, when Wanda Cinemas, the cinema arm of Dalian Wanda Group, opened its first IMAX cinema in Dongguan. As Asia’s largest cinema chain, Wanda Cinemas currently operates more than 160 IMAX theaters.

　　Today’s agreement is expected to increase the number of Wanda’s IMAX cinemas by more than 70 per cent to 360, with the majority set to open over the next three years and all signed cinemas scheduled to open by 2022. The agreement will increase the number of cinemas under contract in IMAX China by nearly 60 per cent. The agreement is on top of a contract signed by the two companies in 2013, under which Wanda will build 120 new IMAX cinemas by 2020. Wanda now expects the projects under the previous agreement to be installed by the end of 2016, four years earlier than originally expected. Nearly half of the new IMAX cinemas in Wanda’s cinema chain will be equipped with IMAX’s latest laser projection technology from the end of 2018. The main provisions of the new agreement are highly similar to those of the 2013 agreement.

　　Richard Gelfond, chief executive of IMAX, said: "This is a landmark development in the history of IMAX and a key point in our business growth strategy. In particular, based on our long-term observation, contracted theaters translate directly into theater installations, resulting in higher box office and ultimately increased company revenue. This agreement not only strengthens our leadership position in China, the world’s fastest growing film market, but also reinforces IMAX’s partnership with one of its most important business partners, Wanda Cinemas, and speaks volumes about the value Wanda brings to the IMAX business. Wanda’s significant commitment in the agreement fully demonstrates that our decade-long partnership has far exceeded the original single-theater sales agreement. Wanda and IMAX are now operating under a more sustainable revenue sharing model, providing new opportunities for the release and box office distribution of key Chinese-language films.

　　Since 2013, IMAX and Wanda have collaborated on a number of high-profile Chinese-language films, including "Tai Chi Man," "Get Out! Mr. Tumor" and "Finding the Dragon," which set a box office record for an IMAX Chinese-language film released last year.

　　"The strategic importance of our partnership with IMAX cannot be overemphasized," said Zeng Maojun, president of Wanda Cinemas. "This partnership has been critical to the rapid growth of Wanda’s cinema business and our record of being the leader in the Chinese box office market for seven consecutive years. And our business model will create differentiated film experiences. Combining Wanda’s first-class cinema environment with IMAX’s advanced film technology, we are able to provide the most immersive and powerful film entertainment experience anywhere in China. We look forward to working with IMAX in this successful model to accelerate the rapid expansion of China’s film industry in the coming years, bringing more blockbusters to Chinese audiences.

　　Mr. Zeng singled out the partnership between IMAX and Wanda for playing an important role in the June release of Hollywood blockbuster Warcraft, which was produced and distributed by Wanda Group’s legendary film studio and quickly broke box office records as well as sparking a cultural boom. Warcraft broke IMAX China’s first-day box office record with 35 million yuan ($5.30 million) after its release, and also set IMAX’s zero-point show and pre-sale records in China.

　　With today’s deal, IMAX has signed 284 theaters so far this year, including 229 in China, surpassing IMAX’s previous global record of 277 theaters in a year. The Chinese market accounts for about one-third of IMAX’s global box office revenue.

　　As of June 30, 2016, IMAX had 335 theaters in China, up from 250 in the same period in 2015. Despite the significant growth of the theater network and its presence in more than 100 different cities in China, IMAX’s single-screen average box office has remained steadily between $120 and $1.30 million over the past four years.

　　Earlier this year, IMAX announced four Chinese-language blockbuster summer collaborations, including Wanda Cinemas’ "Kuaishou Gunslinger," Anle Pictures’ "Chow Yun-fa’s" Chills 2, "kung fu superstar Jackie Chan’s fourth IMAX film," Jedi Escape, "and the 3D adventure blockbuster" Tomb Robbing Notes, "directed by Li Rengang and directed by LeTV Pictures and Shanghai Film Group. IMAX also plans to collaborate with" The Great Wall, "starring Matt Damon and directed by Zhang Yimou. In addition, the company is also exploring other potential collaborations, including" Journey to the West 2. "

　　"China is a rapidly growing market and Chinese moviegoers are increasingly demanding film technology and cinematic experience," said Zhang Yimou. "As a filmmaker, I want to do my best to provide the best experience for my fans and look forward to presenting my new work’The Great Wall ‘in IMAX format on IMAX’s growing cinema network."

　　IMAX plans to increase the number of Chinese-language film collaborations in China, with 8-10 Chinese-language films expected to be screened in 2016, including "Three Dozens of White Bones" and "Kung Fu Panda 3" released earlier this year. IMAX’s list of Hollywood blockbusters in China this year also includes "Bourne 5", "Star Trek 3: Beyond the Stars", "Fantastic Beasts and Where to Find Them" and "Doctor Strange". In addition, IMAX China and the Chinese Cultural Industry Fund announced the establishment of a film production fund to jointly invest in 15 Chinese-language films over the next three years.

　　In addition to Wanda Cinemas, Wanda Group also owns the AMC Cinema Line, which is IMAX’s first commercial cinema partner in North America and the largest IMAX cinema chain in the world. AMC is also currently the largest IMAX cinema chain in North America, with 185 existing and committed IMAX theaters.