California-based Endeavor talent agency is putting its money where its geopolitical mouth is, returning a $400-million investment from Saudi Arabia by way of protesting the murder of Saudi journalist Jamal Khashoggi in October.
As reported by the New York Times, Endeavor returned the money and canceled its contract with the kingdom.
Many would have found it unexpected given the fanfare that came along with this funding in the first place. That included a high-profile Hollywood party last spring—the culmination of Endeavor’s efforts to help organize a Hollywood party for Saudi Crown Prince Mohammed bin Salman (aka MBS).
Essentially, Endeavor is returning money to no less than the Saudi sovereign wealth fund, the Public Investment Fund (PIF), which manages at least $250 billion in assets. The deal had also taken some time to negotiate.
Endeavor--which also owns IMG, Ultimate Fighting Championship, Professional Bull Riders and the Miss Universe organization—would have used the money to finance growth. From the Saudi side, it’s all about diversifying and reducing financial dependence on oil. That means they’ve been hitting up everything from electric cars to TV and film production. The bigger the flash, the bigger the splash, so Hollywood fits into that perfectly, even if the Crown Prince’s human rights record right now doesn’t exactly jive with the swelling #MeToo movement.
Trading Harvey Weinstein and company for MBS and his rounding up of female activists at a time when he’s trying to portray the image of a modern reformer to Washington should go over well in Hollywood.
Under MBS, the kingdom is trying to shake off its ultra-conservative image, but so far it’s been cosmetic, and backtracking at the best of times. Recently, they lifted the 35-year-long ban on cinema. The Kingdom has also ended its ban on women driving, but then proceeded to arrest female activists who had pushed for the ban. And Saudi men put to good use an app that keeps track of their women and makes or breaks their ability to travel.
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But when it comes to entertainment, if they can keep women under control, the Saudi Vision 2030 program would very much like to increase cultural and entertainment offerings and create new employment opportunities. The citizens of Saudi Arabia—70 percent of whom are under the age of 30--are spending $20 billion overseas every year on the hunt for entertainment.
At the same time, the PIF is looking to invest in entertainment outside the Kingdom.
In late 2017, it was reported that the PIF was developing a new branch with an initial $2.6 billion capitalization to focus on entertainment investments. According to the Vision 2030 reform program, Saudi Arabia will invest a total of $64 billion in developing its entertainment industry over the next decade.
During his visit to the US last spring, besides the deal with Endeavor, a Saudi delegation led by MBS also sealed a deal with AMC, America's biggest movie theater company and World Wrestling Entertainment, which sold out Jeddah's 60,000-seat stadium last spring.
But Khashoggi—murdered by government officials--has touched more than a few nerves. For that, the U.S. sanctioned 17 Saudis said to have been involved, but MBS remains untouched.
This has led to international outcry and calls to boycott Saudi Arabia. Alas, Saudi cash remains too alluring and it’s managed to retain most of its partnerships. For now, only Richard Branson, founder of the British media and technology conglomerate Virgin Group, has suspended talks with the Saudi fund over potential investments in his space-travel businesses.
Just last month, Saudi Arabia’s General Entertainment Authority, a government body set up to develop the entertainment industry, signed a variety of deals in the UK for the development of the sector.
By Fred Dunkley for Safehaven.com