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Empire Entertainment Makes Bold Moves Into Saudi Market

A century after Georges N. Haddad opened the Arab world’s first movie theater in the heart of downtown Beirut, the Haddad family’s pioneering spirit is at the forefront of the latest new frontier in the dissemination of cinema across the region.

These days, Empire Entertainment is a multi-pronged operation with offices in Lebanon, the Gulf, Iraq, Egypt and recently, Saudi Arabia.

Roughly two years ago, when word got out that the kingdom would end its 35-year ban on cinemas, they “started scouting for the ideal partner,” says Gino Haddad, who operates the family-run company’s exhibition side. A good match was mutually found with another family with a similar origin story —Saudi Arabia’s prominent Al-Rashed conglomerate.

Both companies were launched by an entrepreneur with two sons — and Empire forged a partnership with Al-Rashed.

In December 2017, the Al-Rashed Empire Cinema Consortium was among the first to be granted licenses to build movie theaters in Saudi. The consortium now has nine facilities in different stages of construction and is hoping to inaugurate at least one before the end of 2019, to coincide with its centennial. Initial plans are for 30 venues, at least 20 opening during the first five years, for a total of at least 300 screens.

In terms of screen locations, the strategy is to focus on secondary cities where other exhibitors aren’t going and where Al-Rashed has malls.

The first cinema will be in Jizan, a seaside town close to Yemen, followed by Abha, a popular Saudi summer destination, and then Khobar, on the Persian Gulf.

“People know Empire; they know that they are an institution in Lebanon,” says Gianluca Chakra, head of Dubai-based distributor Front Row Filmed Entertainment. So “going into Saudi was a natural step for them” when the market opened up.

But Saudi Arabia poses a risk for business ventures, as evidenced by several entertainment companies pulling out following the October assassination of journalist Jamal Khashoggi. Though most exhibitors, after some hesitation, are now moving forward.

“You just don’t know how far the government is going to go in terms of wanting to control things,” says a Middle East operator, speaking on background, who notes there is a steep 30% tax in Saudi on entertainment revenues.
In Saudi it’s extremely important to know your limits, says Gino, “to know how to deal with things that will arise; how to respect the culture.”

It’s part of what he learned during the past year-and-a-half traveling from Beirut to Riyadh. “Money is not an issue … but understanding where to step at every turn and staying humble and low-key” are important in order to succeed there.”

Developing a chain of cinemas and becoming a big Saudi exhibition player is Empire’s top priority and also a major opportunity for the company’s distribution arm. But besides possibly being the last big untapped market
for Hollywood, Saudi needs to develop, and cater to, an audience with an appetite for Arab movies.

Increased demand for local content is what prompted Empire to recently team up with Front Row and Egypt’s Film Clinic on an Arabic remake to hit Italian movie “Perfect Strangers,” one of several local productions now in Empire’s pipeline.
This aspect of Empire Entertainment falls under the purview of Mario Haddad Jr., who operates the distribution side, which is totally separate.

“I know how flavoring for popcorn works; I know how a ticketing system works,” says Gino, who is 45 and has been with Empire since he was 24. He does not even “pretend to understand” the “more artsy” aspect of the biz handled by his brother.

But after more than two decades of experience “in construction, in picking the right suppliers, meeting new architects and learning from competitors’ mistakes,” he feels ready for the Saudi challenge.

Gino wishes he were operating in a more stable region and that during its century of ups and downs in the biz, Empire had accumulated more resources. But it’s never too late. “Now we’ve got our chance,” he says.

The hope is that Empire will expand exponentially just as “cinema becomes part of the culture over there.”

But Gino also points out that the Middle East “will always be five to 10 years behind the rest of the world.” So that if moviegoing ever declines, this will happen later in his part of the world. Also, there are other underdeveloped markets in the region.

“I mean, look at Syria. Syria is coming out of a war now,” he says. “You still have another 10 years to develop cinemas for them.”

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