Saudi dignitaries gather in Beverly Hills to court Hollywood investors
Saudi Arabian dignitaries came to Los Angeles this week with a clear message to entertainment industry leaders: Their country is open for Hollywood’s business.
Leaders from the Saudi General Entertainment Authority wooed industry executives Wednesday afternoon at the Four Seasons Hotel in Beverly Hills, pitching the desert nation as a massive untapped opportunity for foreign investors.
Representatives from the authority, tasked with leading Saudi Arabia’s nascent entertainment market to growth, touted the country’s population of 32 million people, who are predominantly young, technologically savvy — and largely deprived of local entertainment options.
“The younger generation is very sophisticated and they are demanding more entertainment options,” said GEA Chairman Ahmed Al Khateeb. “You will never find a better market than Saudi Arabia.”
The event, attended by hundreds of entertainment industry executives, was part of a coast-to-coast American tour by Saudi Arabia’s crown prince, Mohammed bin Salman, and his entourage of dignitaries to sell the kingdom as a nation in the midst of reforms that are meant to modernize Saudi society and diversify its oil-dependant economy.
During his Los Angeles visit, the 32-year-old leader is meeting with entertainment industry executives including media mogul Rupert Murdoch, talent agency boss Ari Emanuel and producer Brian Grazer to forge ties between the global media business and the conservative desert kingdom.
During a Monday night dinner party at Murdoch’s home in Bel Air, he met with show business leaders such as Walt Disney Chief Executive Bob Iger, Warner Bros. Chief Executive Kevin Tsujihara, Universal Filmed Entertainment Chairman Jeff Shell and 20th Century Fox Film Chairwoman Stacey Snider, according to people with knowledge of the event.
Studio executives and theater owners around the world have been eager to do business with Saudi Arabia ever since the country said four months ago it would grant licenses to open movie theaters for the first time in 35 years. Saudi Arabia in February announced plans to spend $64 billion in the coming years building water parks, themed attractions, movie theaters and other offerings.
“This is a great opportunity for you to come to Saudi Arabia and invest in the infrastructure,” Al Khateeb said.
The country’s entertainment ambitions are starting to emerge. A handful of deals were announced at the Beverly Hills event Wednesday. Cirque du Soleil said it will present its first performance in Saudi Arabia in September at the King Fahd Stadium in Riyadh. Live entertainment touring company Feld Entertainment entered a long-term agreement to produce events including “Disney on Ice” in Saudi Arabia. Also, National Geographic Encounter said it would launch several new locations of its “Ocean Odyssey” attraction in the kingdom beginning in 2019.
GEA also struck a deal with Hero Ventures and Luxury Entertainment to bring a six-month “Marvel Exerience” live tour to Riyadh and Jeddah.
Another potential opportunity for studios is a plan by Saudi Arabia’s Entertainment Co. to develop 20 “entertainment clusters,” huge complexes that host various entertainment offerings including retail, restaurants, cinemas and themed attractions. The company plans to break ground on the first such project this year. Entertainment Co. Chairman Abdullah Aldawood said the company is seeking deals with studios to create content for the entertainment complexes.
“A lot of these venues will be the ideal venue for international producers, whether through the cinemas or specialty attractions such as virtual reality and augmented reality experiences for consumers,” he said in an interview.
Emanuel’s agency Endeavor is close to securing a roughly $400-million investment from the Public Investment Fund for less than 10% of the company.
In perhaps the most significant Saudi entertainment deal announced this week, AMC Theatres, the world’s largest cinema operator, said Wednesday that it plans to open up to 100 theaters in 25 Saudi Arabian cities by 2030. AMC, based in Leawood, Kan., and the entertainment subsidiary of Saudi Arabia’s Public Investment Fund have signed a deal to operate cinemas in the kingdom, with up to 40 locations expected to open in 15 cities within five years.
AMC received the first cinema license issued by the country’s Ministry of Culture and Information, the company said. The joint venture between AMC and GEA is expected to invest about $1 billion in the initiative during the next five years.
The first new theater in Saudi Arabia, an AMC Cinema in Riyadh’s King Abdullah Financial District, is set to open April 18. AMC, whose biggest shareholder is Chinese conglomerate Dalian Wanda Group, hopes to control 50% of the Saudi Arabian theater industry.
Theater owners, movie studios and media companies have been moving quickly to crack the market, which could be worth $1 billion in annual box-office revenue within a few years.
“We expect this to be a very lucrative opportunity for AMC,” said AMC Chief Executive Adam Aron in a conference call. “If we can open up to 100 movie theaters in Saudi Arabia, in a country where there is literally no capacity now, we think the market will have staggering levels of pent-up demand.”
Aron was among 250 guests attending the event in Beverly Hills.
In the months leading up to the deal, questions have swirled concerning how theaters and studios will address social norms in Saudi Arabia, including the separation of unrelated men and women. Aron said he expects that theaters will not have gender segregation, with the exception of certain screening times for one group or another. However, he cautioned that the rules and regulations are still being worked out.
“I’m sure it will be a trial-and-error situation,” he said. “The rules of operation are in formation as we speak.”
The first AMC theater in Riyadh will be converted from a symphony concert hall, Aron said. It is expected to open with a gala with more than 400 guests in attendance. He did not say what the first movie shown at the theater will be. The cinema is expected to open with one screen this month, and have four in operation by July or August.
“I can tell you, this will be the prettiest movie theater in the world,” Aron said.
UPDATES:
4:20 p.m.: This article was updated with information about a plan by Saudi Arabia’s Entertainment Co.
This article was originally published at 4 p.m.
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