Abu Dhabi invests in Hollywood
Furthering the links between the United Arab Emirates and Hollywood, a venture controlled by the government of Abu Dhabi is launching a production company with a $1-billion-plus fund to make movies and digital content in partnership with three as-yet-unnamed Los Angeles producers and other international filmmakers.
Abu Dhabi Media Co., through a newly formed subsidiary called Imagenation Abu Dhabi, plans to make eight films a year over the next five years, primarily for the English-speaking market. Imagenation will announce the first of its production deals next week at the Toronto Film Festival. The U.S. companies plan to open offices in Abu Dhabi.
Imagenation will now also assume oversight of Abu Dhabi Media’s year-old entertainment partnership with Warner Bros., which has had little to show for itself since it was announced with fanfare last September.
The parties said at the time that they would each contribute to a $1-billion fund to produce films and video games.
But the arrangement has so far resulted in just one film, “Shorts,” a fantasy story about a group of misfit kids who find a box with mysterious powers. The film, written and directed by Robert Rodriguez, will be released by Warner Bros. next August.
The formation of Imagenation is part of Abu Dhabi Media’s strategy to become a major player on the global entertainment stage. Founded in 2007 and headquartered in Abu Dhabi with offices in Cairo, Dubai and Washington, the company employs 1,800 people in TV, radio and publishing, including a recently launched Mideast-based newspaper called the National.
In recent years, Abu Dhabi and smaller neighbor Dubai, flush with cash from the oil boom, have made deals with such studios as DreamWorks Animation, Paramount Pictures, Universal Studios and Marvel Entertainment to build theaters, theme parks and other facilities.
Imagenation and Abu Dhabi Media CEO Edward Borgerding said the new fund and the impending deal with the trio of U.S. production companies were “an extension of creating content for a global market.”
Borgerding, who was an executive in Walt Disney Co.’s international division from 1979 to 2000, said the partners planned to make a diverse slate of commercial movies with budgets of $10 million to $50 million. He said Imagenation would be involved creatively from development through production. “We’ll have an oar in the water, as it were.”
Hollywood has been scrambling for new sources of capital as hedge funds and private equity firms have slowed their once-aggressive investments amid disappointing returns and a deepening credit crunch.
Meanwhile, India and the Middle East have become increasingly active media investors as they seek to diversify their own industries. Indian media conglomerate Reliance Big Entertainment is poised to make a $500-million equity investment in a production company to be formed by DreamWorks SKG co-founder Steven Spielberg.
In early summer, Reliance also announced a string of development deals with production companies controlled by top Hollywood stars and filmmakers, including Tom Hanks, Brad Pitt, Jim Carrey, George Clooney, Nicolas Cage and Chris Columbus.
Media watchers question whether the funds pouring into Hollywood will worsen the glut of titles vying for box-office dollars.
“The world needs new sources of energy and cures for diseases, but another set of eight films? Who cares?” said media analyst Harold Vogel.
Borgerding predicts that the glut will begin to correct itself over the next six months as other sources of money dry up, curtailing the oversupply of movies.
Some also question whether the cultural differences between more conservative, state-run Mideast companies and independent-minded Hollywood filmmakers could make for uneasy alliances.
But Borgerding downplayed potential cultural issues. “With the kind of films our partners make, it won’t be a problem,” he said.
He dismissed speculation that cultural issues contributed to the slow start of the venture with Warner Bros.
“The company wasn’t organized to engage in this very sophisticated process of producing feature films and video games,” said Borgerding, who was hired a month after the Warner deal was made.
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