Rupert Murdoch has closed his long-gestating deal for News Corp. to acquire a stake in Saudi Prince Waleed bin Talal’s Rotana media conglom.
Son James Murdoch has been personally involved in the negotiations, which have gone on for many months as the two sides bargained over Rotana’s value. Those talks recently came to a close in London.
The pact, first announced by Daily Variety at the 2006 Cannes Film Festival, will see News Corp. take a 10% stake in Rotana, with an option to acquire another 10%.
While Middle Eastern investors have been ramping up their involvement in Hollywood — witness Abu Dhabi’s $1 billion production arm Imagenation — the News Corp.-Rotana pact marks the most significant investment yet by a Western media company in the Arab world.
It also deepens the strategic partnership between Rupert Murdoch and Prince Waleed, who is a substantial investor in News Corp.
News Corp.’s Fox and Rotana have a long-standing relationship. The two companies launched two Fox-branded English language channels in the Middle East last summer and Rotana has also inked to distribute Fox fare on DVD throughout the Middle East.
Rotana is a multi-faceted media operation, with interests across film, TV and music. The deal with News Corp. will focus on the film and TV aspects of Rotana’s business.
Fox execs are believed to have held discussions with their Rotana counterparts about ways to improve the distribution and marketing of Arab films in the region and internationally.
A source close to the deal highlighted “Slumdog Millionaire” as the template for projects with cross-cultural appeal that the two companies could work together on for Arabic-language and international markets.
New Fox-Rotana TV channels are also set to be launched in the coming months as part of the pact.
The deal between News Corp. and Rotana will help ease Prince Waleed’s cash flow situation. While the billionaire maven remains one of the Middle East’s most successful businessmen, his investments have been hit hard by the global economic recession, particularly his large stake in Citi Group bank.
A stake in Rotana also helps News Corp. increase its presence in the Middle East as it seeks to exploit new markets and sources of revenue.
Fox is developing its first Arabic-language feature with Moroccan helmer Hicham Ayouch. “Samba” is about a Moroccan samba teacher whose mother hires an imam to cure her son’s obsession with a Brazilian telenovela star.