Culture

Saudi fund eyes stake in U.S. movie studio

NEW YORK/DUBAI: Saudi Arabia’s sovereign wealth fund, PIF, is exploring the acquisition of up to a $700 million stake in Legendary Entertainment, the U.S. movie studio behind films such as “Jurassic World” and “Interstellar,” according to people familiar with the matter. The deal would test Hollywood’s appetite for Saudi investments following widespread condemnation of Riyadh for its role in the killing of journalist Jamal Khashoggi. A critic of Saudi ruler Crown Prince Mohammad bin Salman, Khashoggi was killed in Saudi Arabia’s Istanbul consulate on Oct. 2. The Saudi regime has denied that the crown prince ordered the assassination.

The deal could face resistance from some Legendary executives concerned about the impact a PIF investment would have on the studio’s brand and its ability to attract top talent, according to the sources

Such pushback would be the latest illustration of how fallout from Khashoggi’s death is weighing on the ability of Saudi Arabia, the world’s largest oil exporter, to diversify its investments abroad.

Hollywood talent agency Endeavor is close to terminating an agreed $400 million investment from PIF, over concerns about the reputational impact on its business, according to sources.

Legendary has not had any formal discussions with PIF, sources say.

PIF believes Legendary’s majority owner, China’s Dalian Wanda Group, will be open to a deal, sources say, because it is under pressure from Beijing to divest overseas assets so it can trim its debt.

There is no guarantee the fund will make an offer for Legendary, the sources said, asking not to be named because the matter is confidential. PIF and Legendary declined to comment. Wanda and Endeavor did not respond to requests for comment.

Some Hollywood actors have already distanced themselves from Saudi Arabia. Gerard Butler, for example, canceled his appearance at a screening of his new film “Hunter Killer” in Riyadh last month.

PIF’s overtures to Hollywood, the world’s filmmaking capital, come as Saudi Arabia has been seeking to open up to foreign films, as part of ambitious economic and social reforms pushed by Crown Prince Mohammad.

Following the lifting of a ban on movie theaters last year, PIF signed deals with cinema operators such as AMC Entertainment Holdings (AMC.N), in which Wanda is also an investor, to build theaters in Saudi Arabia. Several Hollywood stars paid promotional visits to the country, including John Travolta and Jason Momoa.

Saudi Arabia had some cinemas in the ’70s, but its powerful clerics had them closed.

Saudi citizens remained avid consumers of Western media and culture. Despite the cinema ban, Hollywood films and recent television series were widely watched in the country.

 
A version of this article appeared in the print edition of The Daily Star on November 16, 2018, on page 12.

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