- Sovereign funds and other entities in Saudi Arabia, Qatar, and the UAE are pouring millions into US media and entertainment.
- US media players are jetting to the Gulf States seeking investment as interest rates climb at home.
- Insider identified some key people connecting Mid East investors with American companies.
Relations between American businesses and their Middle Eastern counterparts are flowing again. It’s been five years since Washington Post columnist Jamal Khashoggi was murdered, stoking outrage in the US, but many entertainment players think it’s time to move on.
There’s been a steady trickle of US-based executives jetting to Gulf State capital cities — Riyadh, Doha, and Abu Dhabi — in a search of investment.
A freezing of relations with China over Taiwan, rising interest rates, and the collapse of crypto player FTX, which had spread dollars around the media business, have led media financiers to create new pathways to investment opportunities.
In January, Netflix carried its first Saudi-made movie — “AlKhallat+,” a dark comedy based on a popular YouTube series — heralding what Mashable described as “the dawn of Middle Eastern cinema on streaming platforms.” That same month, Warner Bros Discovery’s CNN launched CNN Business Arabic in partnership with IMI, an Abu Dhabi-based private investment venture that also operates Sky News Arabia and helped fund US political news startup Grid News.
IMI also teamed with RedBird Capital to form RedBird IMI, a joint venture led by former CNN and NBC exec Jeff Zucker that’s pouring $1 billion into media and sports acquisitions. LIV Golf, backed by Saudi Arabia’s Public Investment Fund, found a home on Nexstar’s CW Network in January despite protests about the creation of the tournament from 9/11 victims’ families and critics of the kingdom’s history of human rights abuses.
The scope of Middle Eastern investments in Western cultural products is hard to overestimate, and it’s growing now for a variety of reasons. Insider spoke to entertainment and news stakeholders to outline why more Middle Eastern money is making its way into western media coffers, why Hollywood and news organizations are accepting it, and who the top connectors and beneficiaries are of this robust new funding pipeline.
Saudi Arabia is promoting itself as a travel destination and filming location
The attention has centered on Saudi Arabia, where the kingdom is scrambling to take advantage of high oil prices to diversify its economy, chiefly through the Public Investment Fund, or PIF — one of the world’s largest sovereign wealth funds, with $620 billion in assets and investments with Blackstone, Softbank, and Uber, to name a few.
Saudi Arabia is trying to pitch itself to the world as a cultural and economic reformer and spur tourism. The country has loosened some restrictions on women, and authorities there said in 2018 they planned to spend $64 billion on entertainment projects and venues at home, with about $10 million set aside for film investments, according to a report in the Los Angeles Times. Six months ahead of Khashoggi’s death, Hollywood was happy to host Saudi Crown Prince Mohammed bin Salman on his visit to LA to promote the efforts.
“They are looking to be a large travel destination in a short period of time,” said Dara Kaplan, co-founder and president of PR firm Wunderlich Kaplan Communications, whose growing work in the region has included bringing an Alicia Keys concert and pop-up roller-rink to the city of AlUla, where rapper Swizz Beatz performed.
That ancient city is a focus of Saudi Arabia’s culture transformation efforts and has flooded Instagram with stunning photos; Gerard Butler-starring “Kandahar” made history as the first major Hollywood film shot entirely in Saudi Arabia, mostly in AlUla.
Elsewhere, Qatar pulled out all the stops to burnish its image as the host of the largely successful FIFA World Cup last winter, even as Western media threw a spotlight on the treatment of migrant workers who built tournament venues. Also at issue were the obstacles to showing public support for LGBTQ+ representation during matches.
Who’s connecting Mid East money with US media and Hollywood
Saudi Arabia is leaning on established institutions and connectors to build its sports, media, and entertainment portfolio. These conduits include longtime Middle East go-between Sandy Climan, the low-profile president of Entertainment Media Ventures; and Amanda Stavely, a British businesswoman who brokered Saudi Arabia’s 2021 purchase of Newcastle United.
There are sports figures like Gary Davidson, COO of golf marketing consultancy Performance 54 (which in turn enlisted PR giant Edelman); and Ioris Francini, a former longtime IMG Media exec, who helped launch LIV Golf.
Through the PIF and entities with ties to the government, Saudi Arabia is leaning on people like Wayne Borg, a longtime media exec who’s had roles at 20th Century Fox, Universal, Warner Bros., and others; Charlene Deleon-Jones, executive director of Film AlUla, to promote filming in the region by international productions; and US producer Christina Wayne, known for “Mad Men” and “Breaking Bad,” who was drafted to run the studio of MBC Group, the media giant part owned by the Saudi government.
But there are tensions that come with doing business in a region whose history of human rights abuses and ultra-conservative values clashes with liberal Hollywood. Indeed, many entertainement executives who were contacted by Insider, even those who’ve sought or taken investments from Saudi Arabian funds, declined to discuss the topic at all — and those who did would only comment on background for fear of a backlash. “It’s an incredibly touchy subject,” said one film agent.
One movie investor told Insider, “The ice has thawed a little bit.” People are still trying to distance themselves — saying, for example, their money came not from the kingdom itself but from an investor that’s Saudi-backed. “If you can put a buffer between you and MBS,” this investor said, “the further you are the better.” MBS are the initials of Mohammed bin Salman, the Crown Prince and Prime minister of the Saudi Kingdom, whom the US government implicated in the murder of Khashoggi.
‘If anything, American companies in Saudi will push them along with human rights’
Some stakeholders also argue it’s hypocritical to not do business with the Middle East when many countries in other regions commit human rights abuses. Making deals across these divides can promote Western values and harmony with the US, proponents say.
“If anything, American companies in Saudi will push them along with human rights,” a second film investor said. “Female and queer execs are likely going to work there and the Saudis are unlikely to persecute them unless they blatantly flaunt their ‘otherness.’”
Jay Penske’s PMC, which owns a swath of Hollywood trade news destinations, pushed back on criticisms about taking Saudi money. The company said it had received a minority investment worth a reported $200 million from SRMG, a publicly traded Saudi entity with close ties to the Saudi government that also partnered with Bloomberg in 2017 to launch Bloomberg Al Arabiya. The connection with SRMG came after PMC acquired luxury magazine the Robb Report, the company said, adding, “Post investment from SRMG, PMC publications continued to report aggressively on issues related to Saudia Arabia.”
Financially troubled Vice Media, which has an office in Riyadh, made a pact with MBC to help train journalists in the region to produce content earlier this year. Over the years, Vice has been involved in organizing a music event in Saudi Arabia and once had a deal to make promotional films, according to The Guardian.
Navigating the ‘completely opaque’ channels of Mid East funds to the US
Not everyone is rushing to take investment from the Arab world, though, as the shadow of Khashoggi’s murder still looms. “If you don’t have to take it, why would you?” said one media observer.
But even those shunning the cash may end up taking it from other sources who are in business with big Middle Eastern government entities, including big US banks, private equity players, and limited partnerships. “It’s completely opaque,” said the media observer, referencing the varied channels for investment. BlackRock, for instance, has a partnership with the Saudi sovereign wealth fund; the asset-management giant has investments in the biggest media companies, including Disney, Fox, and GE.
Even those media players that are comfortable with invetment from the Middle East may not find funds flowing, one Hollywood veteran said. This person explained that there’s often a mismatch of expectations: The Gulf States want positive representation — for example, they want to be seen as woman-friendly — and they also want to sustain their own cultural parameters — for example, by not participating in movies that feature gambling or alcohol.
Netflix has lately come under fire from Saudi Arabia and five other Gulf Arab countries that ordered the streamer to remove content they say breaches government regulations; local media and officials have said gay characters and sexual themes were the target of the directive. Netflix did not immediately respond to a request for comment.
Regardless, many players have figured out a way to make business work across these cultural divides. A spokesperson for the Qatar Investment Authority, which invested $150 million in Peter Chernin and Providence Equity’s production venture The North Road, explained their investment rationale in a statement shared with Insider. “In terms of our investment mandate, QIA’s mission is to safeguard the well-being of future generations of Qataris through long-term responsible global investment. We do this through a diversified approach, focused on sectors that are shaping the future global economy.”
‘Money always comes with strings attached. Is the price worth it?’
Sports is another key arena where the Gulf States are trying to win attention and influence on the world stage.
Vince McMahon’s WWE has a long-term partnership with the Kingdom of Saudi Arabia, and sports blogs like Bleacher Report are filled with rumors that the PIF is a potential acquirer of the wrestling company. A major live WWE event in Saudi Arabia is slated for May.
Meanwhile, Saudi football club Al Nassr just signed Cristiano Ronaldo, for $200 million a season, making him the world’s highest-paid soccer player. Last year a TPG-backed fund acquired the Middle East’s biggest online soccer destination.
These kinds of investments are often criticized as sportswashing, though in a sports world rife with scandal and corruption, such activity doesn’t make huge waves. The game is a little different when it comes to films, news, and documentaries, where censorship threatens to undermine free expression and the integrity of the work — and where the choices that creators and executives don’t make are as important as the ones they do.
Bryan Fogel’s movie “The Dissident,” about Khashoggi’s murder, was shunned by the global streaming companies including Netflix, Apple, and Amazon, Fogel claimed to Variety in 2021. “The decisions not to acquire ‘The Dissident’ had nothing to do with its critical reviews, had nothing to do with a global audience’s appetite to watch a docu-thriller, but had everything to do with business interests and politics and who knows, perhaps pressure from the Saudi government.”
One executive at the top of a news company said there are a couple of questions to ask when considering whether to accept an investment from a controversial player. “Any money always comes with strings attached,” this person told Insider. “Is the price worth it? What are you giving up in order to do it? What will be the consequences on the society that you are serving?”
Of the growing ties between US entertainment and media and Middle East investors, this person added, “Presumably media organizations got into this to help society make better decisions.”