Abu Dhabi starts $1 bil film financing fund
Adds to UAE capital's growing global portfolioDUBAI, United Arab Emirates -- As Hollywood looks toward India for a sign that Steven Spielberg has cinched his DreamWorks deal with Reliance Big Entertainment, the industry's ever-shifting global focus finds itself again on the Middle East.
Government-owned Abu Dhabi Media has said it will spend more than $1 billion making feature films over the next five years. ADM unit Imagenation Abu Dhabi aims to partner on international film projects and invest in regional talent to create Arabic- and mixed-language content with crossover appeal.
The deal adds to ADM's growing global portfolio, which includes a previously announced film and video deal with Warner Bros. as well as plans for theme park and movie theater projects. ADM's first film under its Warner deal -- the Robert Rodriguez-helmed "Shorts" -- recently went into postproduction.
Based in the UAE capital of Abu Dhabi, Imagenation will assume oversight of the Warners deal, launched last year with twin $500 million funds covering film and video productions. The latest ADM funding is expected to cover 40 projects toting budgets of up to $50 million.
ADM CEO and one-time Disney executive Edward Borgerding said he hopes the project will help spur indigenous film production.
"The idea behind Imagenation is to create a relationship with the filmmaking community so we can develop the skills in Abu Dhabi to grow an industry," he said.
Several films have been shot in the UAE, most notably "Syriana" and "The Kingdom."
"Abu Dhabi has established itself as a major player in the global economy," said Mohamed Khalaf al Mazrouei, chairman of Imagenation and ADM.
Hollywood has been turning to new funding markets like the Middle East and Asian countries in the past couple of years. Any day now, word is expected that Spielberg has secured upward of $500 million from Mumbai's RBE to finance a new, privately operated version of DreamWorks.
Richard Philipps, partner in the London law firm Reed Smith, said Abu Dhabi's move into media assets was inevitable.
"Now that private equity and some of the banks are moving out of Hollywood, oil money was an obvious source to look to," he said. "It was obvious that sooner or later the oil-rich states -- which have been investing heavily in leisure-related assets -- would turn their attention to the media industries."
Speculation quickly arose that Disney could benefit from Borgerding's continuing relationship with the studio.
"He spent so many years at Disney and is still extremely connected with them," a well-placed industryite said. "It would seem reasonable to think Disney will be in line to partner in this cash cow somehow."
Borgerding has stressed that the enterprise aims to link not just with Hollywood but also entertainment companies working in Bollywood, the U.K. and the Middle East.
Stuart Kemp in London contributed to this report.