Movie theater chain AMC Entertainment Holdings is exploring investing in Saudi Arabia in the wake of the kingdom lifting its 35-year-old ban on cinemas.
AMC announced Monday that it had signed a non-binding memorandum of understanding with the Public Investment Fund of Saudi Arabia. “In line with the Fund’s mandate to help unlock promising new sectors within the Kingdom of Saudi Arabia, PIF and AMC Entertainment will explore a range of commercial opportunities for collaboration that will support the growth of the Kingdom’s entertainment sector,” the company said.
AMC said the agreement builds on Monday’s announcement of the General Commission for Audiovisual Media’s decision to grant domestic licenses to cinema providers, and supports the Vision 2030 objective of growing household spending on entertainment from 2.9% to 6.0% of gross domestic product.
“PIF sees huge potential in the Kingdom’s entertainment sector,” the PIF said. “We look forward to working with AMC Entertainment Holdings to explore opportunities in developing an industry that is expected to be around USD 1Bn in size.”
Cinemas were banned in the 1980s as they were considered a threat to religious and cultural identity. Crown Prince Mohammed bin Salman has been driving a program of social and economic reforms under the Vision 2030 banner, and rescinding the cinema ban is part of that drive.
“This announcement is an historic moment for the theatrical exhibition industry and a tremendous opportunity to connect AMC’s movie products with the Kingdom of Saudi Arabia’s more than 30 million citizens, many of whom we know are movie fans based on their regular visits to cinemas in neighboring countries,” said AMC CEO and President, Adam Aron. “Saudi Arabia represents a lucrative business opportunity for AMC Entertainment, and no one does the cinema experience on a global scale better than AMC.
“As such we believe AMC is in a unique position to put the industry’s best foot forward in expanding the magic of the movies to an important country that is in the process of opening up entertainment opportunities for its citizens.”
AMC has approximately 1,000 theatres and 11,000 screens. It’s been owned by China’s Dalian Wanda Group for the past five years.