LONDON — While the U.S. wrestles with the threat of its economy going into recession, it seems you can barely go a week without hearing of yet another billion-dollar deal inked between a U.S. studio and a Middle Eastern company.
Ambitious Middle East mavens are showing they have the financial muscle to compete on a global scale across a broad spectrum of investments, with film and media increasingly high on the agenda.
“The Middle East is doing so much investment in a lot of things both in the region and outside, I think it’s natural that we’ll see some more film development,” says producer Hunt Lowry, who spent 10 months bringing execs from Abu Dhabi and Warner together and will serve as the L.A.-based CEO of their film venture.
The latest big deal was announced in January: DreamWorks Animation inked a megabucks strategic alliance with United Arab Emirates-based real estate company Tatweer to develop a range of tourism and leisure projects in Dubai.
The highlight of the partnership is a 5million-square-foot theme park, incorporating characters from DreamWorks properties such as “Shrek” and its upcoming pic “Kung Fu Panda.”
The DreamWorks/Tatweer deal is only one of a string of similar moves coming out of a Persian Gulf that is enjoying the benefits of high oil prices, a construction boom and expanding economies.
Last year, Dubai Intl. Capital, an investment company owned by Dubai ruler Sheik Mohammed Al Maktoum, acquired a 2%-3% stake in Sony Corp.
Abu Dhabi inked a multibillion-dollar multimedia deal in October with Warner that includes separate $500 million funds for film and vidgame production, a local Arabic-language production fund, and several real estate projects.
Abu Dhabi officials have tapped Ed Borgerding, former senior VP of Disney TV Intl., as CEO of the Abu Dhabi Media Co., the umbrella company that will oversee the Abu Dhabi/Warner fund as well as the oil-rich emirate’s other media operations.
“Shorts,” about a group of young outcasts who are swept into an adventure by a mysterious box, will be the first feature greenlit through the fund, with Robert Rodriguez helming.
The first projects to be greenlit by Abu Dhabi’s unlimited film fund, launched at Cannes last year by royal Sheik Sultan bin Tahnoon al Nahyan, are also set to be unveiled later this year.
Abu Dhabi officials have stressed their intentions to turn their recently launched Middle East Intl. Film Fest into the Davos of the film world.
Saudi mavens are getting into the film biz, too. Sheik Waleed Al-Ibrahim, chairman and founder of MBC, the Arab world’s first and most popular private satcaster, has invested heavily in Mark Gill and Neil Sacker’s production and finance shingle, the Film Dept., while rival Saudi tycoon Prince Al Waleed bin Talal is expanding the film division of his multimedia giant Rotana to move into English-language film production.
In January, bin Talal tapped former StudioCanal managing director Frederic Sichler president of Rotana Film to oversee its expansion into an international film operation. Bin Talal is already a significant shareholder in both Disney and News Corp.
It is the two Waleeds — both of whom began their expansive media empires from TV roots — who are fast becoming major players in the film world, their TV networks giving them ready-made distribution and marketing avenues to fully exploit their big-screen content.
Meanwhile, Viacom has expanded its interests in the region, forging a strategic partnership of its own with U.A.E.-based Arab Media Group to launch MTV Arabia and an Arabic-language Nickelodeon channel.
Viacom subsid Paramount also inked a licensing deal worth $2.5 billion with Ruwaad Holdings to turn Par properties such as “Mission: Impossible” and “The Godfather” into Dubai-based parks and rides.
Universal inked its own $2 billion pact with Tatweer last May to build Universal City Dubailand, replete with a 149-acre Universal theme park, hotels, restaurants and retail outlets. Marvel and Nickelodeon properties are also set to grace U.A.E. theme parks.
The moves aren’t just limited to the Persian Gulf. Egyptian brokerage firm Borak Holding has invested $550 million in U.S. shingle the Insomnia Media Group, founded in 1994 by Bret Saxon and Jeff Bowler, to finance future film-related activities.
Recent film fests in Abu Dhabi and Dubai have seen American and European execs attending in noticeably higher numbers, no doubt attracted by the prospect of meeting deep-pocketed investors. While such enthusiasm is understandable, and Mideast coin is seemingly plentiful, how much of it will make its way onto the bigscreen is far from certain.
The majority of the billion-dollar deals announced so far are primarily related to real estate, not film production.
Movie investment is still seen by many potential financiers in the region as risky, especially compared with construction. Similarly, sources close to the Dubai/ Sony deal were keen to stress the purely commercial nature of the investment as opposed to any cultural opportunities that may have arisen out of it.
“Investors are still distracted by real estate,” says Gianluca Chacra of U.A.E-based distrib Front Row. “The money is definitely there. In fact, it’s overflowing. It’s almost like Germany in the mid-’90s, but Germany had a film culture. Here it’s something totally new. It’s going to take time to develop that understanding and know-how of the way the film industry works.”
Encouragingly, the signs are there that education and development — both in terms of infrastructure and film-biz savvy — are being put into place.
Dubai’s long-awaited Studio City, envisaged as a one-stop-shop for production, may actually open the first of its anticipated three soundstages by the end of the year, following a number of design delays.
Abu Dhabi’s financing summit, the Film Finance Circle, which was keynoted by Harvey Weinstein last year, is also broadening its remit to ensure that both local and global film talent are catered to.
Only time will tell just how many of these projects come to fruition. “All of this is about testing the waters. There are discussions about investing in a slate of films, but I think we’re still a year away from seeing tangible productions,” says Tim Smythe, CEO of U.A.E.-based production services company Filmworks.