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Saudi Arabia and its sovereign wealth fund have quietly — and in some cases, not so quietly — built a multibillion-dollar foothold in Hollywood, four years after much of the industry cut ties with the country in response to the murder of Washington Post columnist Jamal Khashoggi.
This time around, Saudi Arabia’s Public Investment Fund, overseen by Saudi Crown Prince Mohammed bin Salman Al Saud, and other Saudi-affiliated firms appear to be betting that live entertainment, rich financial investments and sports can be the gateway to the American market.
In January alone, the PIF-backed LIV Golf scored a critical U.S. broadcast TV agreement with The CW, while the government-owned Middle East broadcast giant MBC Group cut a deal with Vice Media to create Arabic-language content. Earlier, Saudi soccer team Al Nassr signed Portuguese superstar Cristiano Ronaldo for $200 million a year. And if the second edition of the Red Sea Film Festival, held in the coastal city of Jeddah in December, was anything to go by, the country’s time in the cold in terms of its relations with Hollywood has come to a close. Sharon Stone, Guy Ritchie, Spike Lee, Michelle Rodriguez, Henry Golding, Lucy Hale, Andrew Dominik and Scott Eastwood were among the attendees, while the opening red carpet welcomed enough stars to have impressed Cannes. Searchlight’s The Banshees of Inisherin and Empire of Light, Neon’s Triangle of Sadness and MGM’s Bones and All were among the films screening.
One film not on display was Kandahar, the Gerard Butler actioner from director Ric Roman Waugh that in 2021 became the biggest Hollywood feature to shoot entirely in Saudi Arabia. Although the film — about an undercover CIA operative who must fight his way out of Afghanistan — might not sound like typical festival fare, The Hollywood Reporter understands that programmers had been hoping to bring the Open Road title to Jeddah to help showcase the country’s fast-rising filmmaking aspirations, but the dates didn’t work out. (Kandahar was just given a Memorial Day release date in the U.S.) As a small indicator of how the tide has turned, Butler — who produces via his G-Base banner — was one of the first Hollywood names to cancel a trip to Saudi Arabia in the aftermath of the Khashoggi murder in October 2018.
Another film now in postproduction is the Anthony Mackie-starring Desert Warrior with a reported budget north of $120 million, which mostly shot in the Neom region (home to the country’s much-hyped $500 billion megacity). Kandahar predominantly shot in AlUla, an area of natural beauty now being heavily promoted as a filming destination.
While Desert Warrior and Kandahar are the flag-bearers for Saudi Arabia’s emergence from the cinematic darkness and — very well funded — hopes to usurp the likes of Jordan, Morocco and Abu Dhabi as the de facto shooting destination for any producer needing a few sand dunes, more major Hollywood projects are practically inevitable.
Or consider the big win for one of the country’s most high-profile U.S. efforts: LIV Golf, the PGA Tour rival fully funded by the PIF to the tune of billions of dollars. LIV has poached high-profile PGA stars like Phil Mickelson, Dustin Johnson, Brooks Koepka and Bryson DeChambeau, lured by guaranteed eight- or nine-figure paydays. The tour had only a YouTube channel available in the U.S. before it struck a Jan. 19 deal with the Nexstar-owned CW to air 14 LIV tournaments annually.
It’s a “win-win” for both the network and tour, says Guggenheim analyst Curry Baker. LIV should benefit from the national distribution and exposure the deal provides, while Nexstar gets hours of content on what is believed to be a revenue-sharing basis. (Nexstar will get live sports on what is believed to be a revenue-sharing basis, and hours of content to fill its schedule.) While The CW is no ESPN, CBS or NBC, it is still a national broadcast network and a major improvement for the tour.
Of course, the growing presence of Saudi money in the entertainment industry has also drawn the attention of groups that believe the country has not accounted for the circumstances of Khashoggi’s murder. (To note: SRMG, a publicly traded media firm in Saudi Arabia, is a minority investor in THR owner PMC.)
The LIV-CW deal returned those concerns to the forefront, especially with Nexstar firmly in the news business with its local TV stations and cable channel NewsNation.
“We are deeply disappointed that a company that makes money from news like Nexstar would agree to participate in such a shameful PR stunt as LIV Golf, which is fundamentally designed to rehabilitate the Saudi reputation,” National Press Club President Jen Judson said. “We are left to wonder what if anything Nexstar stands for. You cannot have a brand in news and act this way…. We urge Nexstar to do the right thing and cancel their bloody golf show. And if they don’t drop the program here is what we can do: don’t watch it; and write each sponsor asking them not to sponsor.”
LIV CEO Greg Norman appeared Jan. 20 on NewsNation to respond to the controversy. Pressed by anchor Dan Abrams on whether he thought the Saudis had “learned from their mistakes,” Norman responded, “Yes, I do.”
“I’ve been over there building a golf course in Saudi Arabia. Now, this is way before any of this hoo-ha-ha erupted,” Norman added. “I was there for a reason because they see the value in what golf is as a force for good, and it’s proving it out in their country today.”
But LIV is only a small piece of the puzzle being constructed by the PIF. The sovereign fund has been cited as a potential buyer for the WWE, which is exploring its strategic options (the WWE already hosts a major event in Saudi Arabia each year called Crown Jewel), or as a potential financier, if another buyer (like, say, Endeavor or CAA), were interested.
If the WWE is sold to a private firm “in the current marketplace, I would assume that to be sovereign wealth money as raising debt for private equity, is it’s not the best time for that given [interest] rates,” one Wall Street observer said, adding that the PIF may be more willing to put up with the notoriously difficult to work with Vince McMahon.
And the PIF has used the public markets to quietly amass significant stakes in a wide-range of companies with Hollywood connections. In addition to stakes in tech giants like Alphabet, Amazon, Meta Platforms Inc. and Microsoft, the fund owns a nearly $1 billion stake in Live Nation entertainment (about 5.5 percent of the company), making it one of the largest shareholders after Liberty Media.
And video games appear to be an area of interest to the fund, with the PIF owning a more than $1.2 billion in Take-Two Interactive stock, more than $2 billion in Electronic Arts shares, and $2.8 billion in Activision Blizzard stock. And the PIF acquired a majority stake in the virtual reality/augmented reality tech firm Magic Leap late last year.
After Khashoggi’s murder in 2018, many American companies — including those in Hollywood — disengaged from dealmaking with the PIF and other Saudi entities. In early 2019, Endeavor, the owner of WME and UFC, returned a $400 million investment from the fund.
But while its public presence in Hollywood dwindled after that moment, the PIF used the pandemic to dramatically expand its investment in the U.S., according to a review of its public holdings, which were filed with the Securities and Exchange Commission. In Oct. 2019, the PIF’s only U.S. public company investments were in Tesla and Uber.
A year later in October 2020, taking advantage of the pandemic-battered economy, it had acquired its stake in Live Nation, and by October 2021, it had added its massive video game and tech holdings.
With a film festival that attracts Hollywood power players, content dealmaking with U.S. companies, and an investment list that includes some of the most powerful companies in gaming and tech, the country’s persona non grata status appears to be over. As one industry source tells THR, in just the past few months, it felt as if Hollywood companies that would have been concerned about a potential PR hit are “suddenly now much more open to doing deals with Saudi Arabia.
A version of this story first appeared in the Jan. 27 issue of The Hollywood Reporter magazine. Click here to subscribe.
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