Saudi Arabia is looking to acquire a stake in the Hollywood talent agency and media company Endeavor in a move that would advance the Middle Eastern kingdom’s growing ambitions in the entertainment industry.
The Saudi Arabian sovereign wealth fund — a public fund that the government uses to invest in projects at home and abroad — is exploring the acquisition of a less than 10% stake in Endeavor, which was previously known as WME/IMG. The acquisition is estimated to be worth between $400 million and $500 million.
No deal has been finalized, according to an individual with knowledge of the situation. An Endeavor spokeswoman declined to comment.
Endeavor is one of the most powerful agencies in Hollywood, representing numerous movie and TV stars, as well as businesses in the worlds of sports and fashion through its marketing division. The agency is headed by founding partner and chief executive officer Ari Emanuel.
The possible investment is the latest signal of the desert kingdom opening its doors to the entertainment industry.
The move comes just a few months after Saudi Arabia lifted a 35-year ban on movie theaters, as part of a broader modernization push led by the conservative nation's reform-minded crown prince.
Hollywood executives see Saudi Arabia as a potentially lucrative market for films because of its large and predominantly young population that has had little access to entertainment. Saudi Arabia, which has a population of more than 30 million, could represent $1 billion in annual box office revenue once the cinema market is fully built out, according to cinema executives.
Two-thirds of Saudi Arabia's population is under 30 years old, a prime demographic for theater circuits and studios that are facing flagging cinema attendance in the U.S.
Theater chains have quickly made moves to get a foothold in the newly opened market. On the day Saudi Arabia announced the decision to lift the ban on theaters, AMC Entertainment said it had signed an agreement with the Public Investment Fund of Saudi Arabia to explore opportunities in the kingdom. The Leawood, Kan., company is the world's largest theater operator.
Earlier this month, Boca Raton, Fla.-based luxury cinema operator IPic Entertainment said it had partnered with the Saudi firm BAS Global Investments Co. to develop cinemas and restaurants throughout the country. The company said it could have as many as 30 locations there within 10 years.
Crown Prince Mohammed bin Salman's reform drive, dubbed Vision 2030, is billed as a strategy to open the country's economy and relax social strictures on its youthful populace. Authorities have also announced measures to allow women to drive, permit concerts and rein in the religious police, for example.
The easing of restrictions also raised questions about the kinds of constraints the kingdom is likely to impose on films, including banning depictions of nudity and sex and the creation of separate theaters for men and women.
But censorship worries and human rights concerns did not stop studios from courting investors from China, which has become the world’s second-largest film market.