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<\/p>\n\n\tOn a weekday night in Riyadh, close to 10 p.m., the lobby of a newly built multiplex hums with the low roar of a city that has discovered the movies. Teenagers cluster around concession stands, families drift toward escalators, and showtimes stretch deep into the early hours \u2014 1 a.m., 2 a.m., even later \u2014 timed to a climate that keeps life indoors until after dark. Inside one auditorium, a late screening of 28 Years Later: The Bone Temple unspools before a mixed crowd. The graphic, R-rated horror film embraces themes of satanism and references to a notorious British pedophile. But a woman in a burka settles into her seat, apparently unperturbed, balancing popcorn and a drink discreetly beneath the fabric. She watches without hesitation as the gore plays out onscreen. The only overt censorship involves nudity \u2014 a particularly well-endowed zombie, naked in the original, is given a discreet pair of digitally added cycling shorts.<\/p>\n
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\t\t\t\t\t\t\t\t\tIllustrated by Christopher Hughes<\/p>\n
\n\tThe scene feels jarring only to outsiders; for local audiences, it is simply another night at the movies. Eight years ago, there were no cinemas in Saudi Arabia<\/a>. Today, there are multiplexes, comedy festivals, esports arenas and a Red Sea International<\/a> Film Festival red carpet designed to rival Cannes.<\/p>\n \n\tEven the war in neighboring Iran, which has seen drone attacks directed at Saudi Arabia, has, so far, had little impact on Riyadh nightlife. Cinemas remain open and packed, evening moviegoing being a popular pastime during Ramadan for people after they break their fasts.<\/p>\n \n\tThat rapid cultural shift helps explain why Saudi Arabia is now spending billions far beyond its borders. The Kingdom\u2019s bet on entertainment at home has been matched by an equally ambitious push abroad \u2014 one that is rapidly reshaping Hollywood\u2019s balance sheet.<\/p>\n \n\t(Saudi-based investment extends to the parent company of THR; SRMG, a publicly traded media firm in Saudi Arabia, is a minority investor in PMC, co-owner of THR.)<\/p>\n \n\tEight thousand miles away, that same strategy may help finance one of the most consequential deals in entertainment history. Paramount Skydance\u2019s proposed $110 billion takeover of Warner Bros. Discovery \u2014 a merger that would unite Paramount\u2019s century-old IP library with HBO, CNN and Warners\u2019 global television assets \u2014 is being powered by $24 billion from Gulf sovereign wealth funds, including Saudi Arabia\u2019s Public Investment Fund (PIF), and capital from the Qatar Investment Authority and Abu Dhabi\u2019s L\u2019imad Holding Co. The filing by Paramount Skydance with the Securities Exchange Commission did not outline how much the funds planned to contribute, but sources familiar with the investment said the total amount was around $24 billion, with Saudi Arabia\u2019s PIF contributing about $12 billion, and sovereign wealth funds for Abu Dhabi and Qatar putting up around $6 billion each.<\/p>\n \n\tParamount declined repeated requests by THR for comment.<\/p>\n \n\tThe Saudis backing the Warner Bros. deal represents more than just another international investor taking a financial stake in Hollywood. For Riyadh, the deal offers the House of Saud proximity to American media power \u2014 and, potentially, to the political ecosystem that surrounds it.<\/p>\n \n\tOn paper, the investors are passive. The filing notes that the sovereign wealth funds will have no governance rights in Paramount-Warner Bros. It\u2019s a setup designed to help the Paramount-WBD merger secure regulatory approval without triggering an investigation by the Committee on Foreign Investment in the United States. Speaking to CNBC on March 3, on the sidelines of the Mobile World Congress in Barcelona, Spain, FCC chairman Brendan Carr confirmed he expected the merger to be approved \u201cpretty quickly.\u201d<\/p>\n \n\tBut in Hollywood \u2014 and in Washington \u2014 few believe that $24 billion won\u2019t come with strings attached, particularly for a deal that will include CNN, HBO and a film catalog with rights to Batman, Superman and Harry Potter.<\/p>\n \n\tFor many analysts, the investments are best understood as part of a broader effort to reshape how the Kingdom is perceived abroad.<\/p>\n \n\t\u201cIt\u2019s very obvious, from my point of view, that this is not only about entertainment in the U.S., it\u2019s also about CNN. It\u2019s also about soft power,\u201d says Stephan Roll, a political economist who heads the Africa and Middle East Division at the German Institute for International and Security Affairs in Berlin. \u201cIt\u2019s about rebranding the image of Saudi Arabia in the West.\u201d<\/p>\n \n\tRoll argues the Saudis are following the same game plan as Qatar and the United Arab Emirates, which have spent years strategically investing in media and entertainment assets, in part to burnish their public reputations abroad. Qatar owns the news network Al Jazeera and the European soccer club Paris Saint-Germain and holds a majority stake in Miramax (the rest being held by Paramount). UAE\u2019s front-facing entertainment assets include Premier League club Manchester City and a 50 percent stake in the Jeff Zucker-run Redbird IMI, the group that just inked an $8 billion deal to merge Banijay (Peaky Blinders, MasterChef) and All3Media (The Traitors) to create the world\u2019s largest independent TV production house.<\/p>\n \n\tThe Saudi investments have followed a similar pattern. In 2021, PIF acquired Newcastle F.C., another Premier League team. Last year, the fund took full control of Saudi-based MBC Group and its news network Al Arabiya, a regional competitor to Al Jazeera.<\/p>\n \n\t\u201cIf anything, the Saudis are playing catch-up\u201d in the soft power game, notes Kristian Coates Ulrichsen of the Baker Institute for Public Policy in Texas.<\/p>\n \t\tBEYOND SOFT POWER\t<\/p>\n \t\t\t\t\t\t \t\t\t\t\tPlumes of smoke rose March 3 after a strike on the Iranian capital of Tehran.<\/p>\n \t\t\t\t\t\t\t\t\tATTA KENARE\/AFP\/Getty Images<\/p>\n \n\tBut not everyone is convinced soft power is the main incentive for Saudi investment.<\/p>\n \n\t\u201cThe image-refurbishing is less important, largely because it doesn\u2019t work,\u201d says F. Gregory Gause III of the Middle East Institute in Washington.<\/p>\n \n\tPublic opinion toward Saudi Arabia in the West has remained stubbornly negative despite years of high-profile investments in sports, entertainment and media, he argues, suggesting the real goal lies elsewhere: political influence in Washington and legitimacy at home, rather than a wholesale shift in Western perceptions.<\/p>\n \n\tThis rebranding effort became particularly important after the 2018 murder of Washington Post journalist Jamal Khashoggi, a killing, according to the CIA and a 2021 U.S. intelligence report, that was approved by Crown Prince Mohammed bin Salman \u2014 Saudi Arabia\u2019s de facto ruler, known as MBS. In the immediate aftermath of Khashoggi\u2019s killing, Hollywood briefly recoiled from Saudi-backed projects. Endeavor returned a $400 million PIF investment and Legendary Entertainment walked away from talks that would have seen the Saudis take a stake in the company. Top executives canceled trips to MBS\u2019 Future Investment Initiative conference in Riyadh, dubbed \u201cDavos in the Desert.\u201d<\/p>\n \n\tBut the corporate chill that followed Khashoggi\u2019s killing didn\u2019t last long. Hollywood quickly returned to Saudi Arabia, encouraged by Washington, which re-engaged with Riyadh during the Ukraine war to stabilize oil prices.<\/p>\n \n\t\u201cThat normalized things for business leaders,\u201d notes Ulrichsen.<\/p>\n \n\tThat rapprochement accelerated under Donald Trump, whose administration maintained unusually close ties with the Saudi leadership and encouraged deeper economic cooperation. Bin Salman\u2019s fullest return to America\u2019s good graces was sealed Nov. 18 when he was welcomed back to the White House for the first time since Khashoggi\u2019s murder. In the U.S.- and Israel-led war on Iran, the Kingdom is a prime ally, not least because the attacks are targeting the Saudis\u2019 main adversary in the region.<\/p>\n \t\t\t\t\t\t \t\t\t\t\tMohammed bin Salman listened to President Trump\u2019s speech at the U.S.-Saudi Investment Forum in Washington in November. With his support, the Saudis have poured billions of dollars into an array of Hollywood projects.<\/p>\n \t\t\t\t\t\t\t\t\tBRENDAN SMIALOWSKI\/AFP\/Getty Images<\/p>\n \n\tFor Hollywood, with domestic financing tight, the Saudis\u2019 ability to write giant checks appears to override any moral objections to working with a government accused of silencing dissent and widespread human-rights abuses.<\/p>\n \n\t\u201cSaudi can make multibillion-dollar commitments that you just can\u2019t get in the United States,\u201d observes Andrew Leber, a Tulane professor specializing in the U.S.-Saudi relationship.<\/p>\n \n\tThat financial pull is already visible across the entertainment industry. In September, Kevin Hart, Bill Burr, Dave Chappelle and Pete Davidson were among the headliners of the inaugural Riyadh Comedy Festival, performing for packed crowds as Saudi Arabia continued its push to position itself as a regional cultural hub. The Soundstorm music festival outside Riyadh in December featured headline performances by Cardi B, Post Malone and Pitbull. The Red Sea Film Festival in Jeddah, also in December, attracted the likes of Sean Baker, Ana de Armas and Dakota Johnson.<\/p>\n \t\t\t\t\t\t \t\t\t\t\tDave Chappelle experienced backlash when he performed at the Riyadh Comedy Fest in September.<\/p>\n \t\t\t\t\t\t\t\t\tRosalind O\u2019Connor\/NBC\/Getty Images<\/p>\n \n\tCelebrity appearances are only the most visible layer of a much deeper wave of investment. On Sept. 29, a PIF-led consortium that includes Jared Kushner\u2019s Affinity Partners and Silver Lake agreed to acquire video game giant Electronic Arts for $55 billion, one of the largest deals in that industry\u2019s history. In October, former Lionsgate executive Erik Feig unveiled a $1 billion studio partnership with Saudi\u2019s PIF that will pair his new indie label, Arena SNK Studios, with Saudi broadcaster MBC Group and Japanese gaming company SNK, itself owned by MBS-controlled Misk Group.<\/p>\n \n\tFor critics of Saudi influence in Hollywood, the willingness to accept that money reflects the industry\u2019s broader moral compromises. \u201cMoney is money and power is power,\u201d notes Bryan Fogel, the Oscar-winning filmmaker whose 2020 documentary The Dissident traced Khashoggi\u2019s murder. After major streamers and studios refused to acquire the film \u2014 wary, Fogel said at the time, of jeopardizing business ties with the Kingdom \u2014 it was ultimately released independently. Yet even as one of the most outspoken critics of Saudi influence in Hollywood, Fogel says he doesn\u2019t condemn those who take Saudi cash.<\/p>\n \n\t\u201cIf you say no to the Saudis and take money from UAE or Qatar, or from Peter Thiel, is that better? I\u2019m not so sure. We don\u2019t live in an ideal world. I don\u2019t think we will ever see real justice for the murder of Jamal Khashoggi, but there is a lot of positive change coming out of Saudi now. You always have to move forward.\u201d<\/p>\n \n\tIn truth, Hollywood never truly stopped courting Saudi money. AMC Theatres expanded into the Kingdom, top agencies kept pitching clients for local work, and private-equity deals continued quietly, even in the immediate wake of Khashoggi\u2019s killing. \u201cEvery major A-list player has gone to find funds or work on projects,\u201d says one Hollywood executive with deep ties to the region. \u201cEvery single top agency is trying to get their clients involved in Saudi.\u201d<\/p>\n \t\t\t\t\t\t \t\t\t\t\tA cyclist rode past an art installation of MBS, spotlighting the murder of journalist Jamal Khashoggi, near the Hollywood sign in 2021.<\/p>\n \t\t\t\t\t\t\t\t\tRingo Chiu\/AP Images<\/p>\n \t\tTHE ARAB STREET \t<\/p>\n \n\tFraming Saudi Arabia\u2019s Hollywood investments purely as a soft-power campaign to polish the Kingdom\u2019s image abroad misses a crucial part of the story. Much of the strategy is aimed not at international audiences but at the Arab street.<\/p>\n \n\tWhen MBS unveiled Vision 2030 in 2016 \u2014 his sweeping plan to shift the Saudi economy away from oil and toward technology, tourism and media \u2014 the project was as much political as economic.<\/p>\n \n\t\u201cHe was offering something to his people,\u201d says Roll. \u201cNot political freedom, of course, but entertainment.\u201d<\/p>\n \n\tIt appears to have worked. Attend one of the big showcase cultural events in the Kingdom and you\u2019ll find packed crowds of young Saudis, proud of how their nation has become a regional cultural magnet.<\/p>\n \n\tAcross the capital\u2019s malls, gaming caf\u00e9s buzz with competition. Young men \u2014 and increasingly women \u2014 sit shoulder to shoulder in glass-fronted rooms, battling on consoles while friends watch from behind. In a country where traditional nightlife options are limited, gaming, cinema and concerts have become substitutes, social rituals replacing the bar culture of the West.<\/p>\n \n\t\u201cIt\u2019s really ridiculous to see how much Saudi Arabia has changed over time. This completely closed society now is very open. You can go to the cinema, you can go to coffee shops. There\u2019s street life, there\u2019s art,\u201d says Roll. \u201cAs part of a ruling strategy, giving people entertainment opportunities so they don\u2019t ask for political participation makes pretty good sense.\u201d<\/p>\n \n\t\u201cIt\u2019s bread and circuses,\u201d notes one U.S. expat, a former industry executive now living in Riyadh. \u201cThe comedy festival, the concerts, the football \u2014 they keep the public distracted.\u201d<\/p>\n \n\tViewed from Riyadh, seeing entertainment as a substitute for political participation, the Warners and EA acquisitions look like more than just soft power plays. Domestic spectacle requires content. And increasingly, Saudi Arabia is trying to own the global franchises that supply it.<\/p>\n \n\tMore than 60 percent of Saudis are under 35. Many grew up on superheroes and Harry Potter, on FIFA and Madden \u2014 on the very intellectual property now sitting inside the Paramount-Warner and EA portfolios. Securing access to that IP is partially a financial play and a way to funnel global brands back into the Kingdom as tentpole productions, theme park attractions and prestige shoots to fill Saudi soundstages \u2014 new facilities were just set up in Qiddiya City outside Riyadh and in the semi-autonomous region of AlUla \u2014 all sold back to the Saudi public as proof that the country has arrived.<\/p>\n \t\t\t\t\t\t \t\t\t\t\tThe MDLBEAST Soundstorm music festival on the outskirts of Riyadh in December.<\/p>\n \t\t\t\t\t\t\t\t\tFayez Nureldine\/AFP\/Getty Images<\/p>\n \t\tTHE WASHINGTON PLAY\t<\/p>\n \n\tThe investments also carry a harder geopolitical logic: cultivating influence in Washington at a moment when Saudi Arabia can no longer rely on oil alone for leverage.<\/p>\n \n\t\u201cThe Saudis really invest in persons related to the Trump administration. They are successful in influencing Trump\u2019s policies more than other countries are,\u201d Roll says. He points to the web of business ties linking the Saudi leadership, and the bin Salman family, to figures close to POTUS, particularly Trump\u2019s son-in-law, Kushner.<\/p>\n \n\tThe bulk of funding for Kushner\u2019s investment firm Affinity Partners comes from the same group of Gulf states backing the Paramount deal, with PIF alone allocating $2 billion to the group, solely owned by Kushner. Affinity was part of Paramount\u2019s initial bid for Warners, but the company pulled out in December amid increased political scrutiny of the deal. Some observers, however, see signs of Kushner\u2019s influence in the new agreement, in particular the unusual collaboration among the Saudis, Qatar and Abu Dhabi, which traditionally view one another as rivals in the region.<\/p>\n \n\tDespite the tentative ceasefire, the Iran war creates a new series of unknowns and could potentially impact current Saudi and Gulf state investments and future commitments. It has caused shipping traffic to slow to a halt through the Strait of Hormuz \u2014 the crucial waterway through which a fifth of the world\u2019s oil and gas passes. Under increasing economic strain, the Gulf states could invoke force majeure clauses to exit current contracts or put future investment plans on hold. On March 4, Qatar declared force majeure on liquefied natural gas delivery contracts after Iranian strikes on its large Ras Laffan complex. One of Saudi Arabia\u2019s largest oil refineries also has been struck.<\/p>\n \n\t\u201cIt\u2019s really too early to say what the impact of the war will be [on Saudi investments],\u201d says Roll. \u201cIf a more unstable situation leads to higher oil prices [long-term], that\u2019s something the Saudis want, because the price of oil has been far too low for them now. But they still have to get the oil out, and if the war keeps the Strait of Hormuz closed, they will be impacted.\u201d<\/p>\n \n\tAgainst that backdrop, the Paramount-Warners transaction looks less like a vanity investment and more like a node in a larger strategy: Anchor American cultural infrastructure with Gulf capital, cultivate proximity to political power brokers, and secure the IP that fuels both domestic spectacle and international clout.<\/p>\n \t\t\t\t\t\t \t\t\t\t\tSaudis gathered at a cinema in Riyadh Park mall after its opening in April 2018.<\/p>\n \t\t\t\t\t\t\t\t\tFAYEZ NURELDINE\/AFP\/Getty Images<\/p>\n \t\tTHE REALITY\t<\/p>\n \n\tYet translating Saudi Arabia\u2019s sweeping entertainment ambitions into a functioning production ecosystem has proved far harder than writing nine-figure checks. For all the splashy announcements surrounding Vision 2030, Hollywood\u2019s track record working inside the Kingdom remains uneven at best. Since MBS unveiled the plan in 2016, the industry has had relatively little to show for billions promised and millions spent.<\/p>\n \n\tWhat the moral debate about taking Saudi money often misses are the practical risks that working with Saudi capital can bring, including chronic cost overruns, mismanagement and projects that rarely deliver as envisioned.<\/p>\n \n\tKandahar, a Gerard Butler action movie shot in Saudi Arabia, grossed less than $10 million worldwide (though it hit No. 2 on Netflix U.S. on its streaming debut). Desert Warrior, starring Anthony Mackie and directed by Rupert Wyatt, saw its budget balloon from $70 million to $150 million amid delays and costly reshoots. The film premiered at the second-tier Zurich Film Festival and was eventually acquired by small indie distributor Vertical Entertainment for the U.S., with a minor release planned this spring.<\/p>\n \n\tThere is also a \u201cmistaken expectation\u201d from U.S. producers that Saudi funding would mean lots of \u201cstupid money being sent out,\u201d says Ali Jaafar, head of film at Riyadh-based MBC Studios. Instead of signing big blank checks, he says, the Kingdom has been careful to focus on building its local industry \u201cto make sure that the partners were not just simply interested in taking resources, but were also [interested in] knowledge transfer.\u201d Feig\u2019s Arena SNK deal, for example, is structured as a series of tranches, with significant cash up front but the full $1 billion dependent on the studio hitting certain targets involving local production and investment.<\/p>\n \n\tA three-year, $350 million deal between Greg Silverman\u2019s Stampede Ventures and regional agency Film AlUla was meant to deliver 10 films. But progress has been slow. In December, Film AlUla said the Stampede deal had been \u201crecalibrated\u201d to focus on initially producing a specific slate of four films. When THR visited AlUla\u2019s state-of-the-art studios, located in the middle of a John Ford-esque epic landscape in the country\u2019s northwest, the first Stampede feature, Chasing Red, an adaptation of Isabelle Ronin\u2019s YA romance web novel, was shooting.<\/p>\n \n\tIt\u2019s never been easy to make movies in Saudi Arabia. On paper, the country has a competitive 40 percent uncapped tax rebate, but the rebate process remains complicated and largely untested. Any tax benefits may be wiped out by the extra costs of shooting in the country, which lacks the wide below-the-line talent base, from equipment rental firms to assistant DPs, required to support a healthy production business. Big productions, of the kind that would benefit most from the rebate, have to fly in crew. There\u2019s a reason why Dune: Part 2 skipped Saudi to shoot in the UAE and Jordan instead.<\/p>\n \n\t\u201cFilmmaking is a bottom-line-driven business, and [Saudi Arabia] is still not the cheapest place to shoot,\u201d Jaafar admits. \u201c[But] that\u2019s happening slowly \u2026 you need to film more to bring [these costs] down so you can increase your skill level.\u201d<\/p>\n \n\tThere are also concerns about corruption. Business Insider this year cited a 2022 internal audit of MBC Studios that allegedly found massive overspending and conflicts of interest. (Jaafar said he was unaware of any such audit.) The company has also seen churn in its C-suite: Longtime CEO Peter Smith resigned in 2023, succeeded by former Amazon and AMC exec Christina Wayne, who stepped down soon after MBC Group\u2019s $222 million IPO and was replaced by production director Samar Akrouk.<\/p>\n \n\tThe pattern repeated across the Kingdom\u2019s splashiest entertainment projects: fast expansion, followed by retrenchment and turnover. Saudi\u2019s other big entertainment bet, Neom Media, the entertainment arm of Saudi\u2019s $500 billion, massively hyped megacity project, was hit by scandal in September with allegations of racism, misogyny and inappropriate workplace behavior by its top execs, including CEO Wayne Borg, who was replaced by Michael Lynch.<\/p>\n \n\tSaudi Arabia\u2019s push to become an entertainment hub competes with flashier national goals \u2014 Expo 2030, the 2034 World Cup and a raft of infrastructure projects that dwarf billion-dollar studio deals. Even within the entertainment space, film and TV production are second-tier to gaming, where megadeals often escape the political scrutiny that accompanies media deals.<\/p>\n \n\t\u201cThe EA acquisition is the second-largest in video game history,\u201d notes Joost van Dreunen, a professor of gaming at the NYU Stern School of Business. \u201cEA has a player network of 500 million people globally. But it\u2019s not like the audience for EA games are lying awake at night thinking about human rights conditions in Saudi Arabia or boycotting EA games because of their new owners.\u201d<\/p>\n \n\tDespite Hollywood\u2019s soft-power fascination, Saudi spending \u2014 from Paramount-Warners to EA to Riyadh Comedy Festival headliners \u2014 isn\u2019t just, or even mainly, about Western approval. It\u2019s about proximity to Trump and influence in Washington and about keeping a young, restless population engaged at home. The prime audience isn\u2019t in Los Angeles or London, it\u2019s in the White House and among those late night crowds at the Riyadh multiplex.<\/p>\n \n\tBehind the sovereign wealth funds, the merger financing and the billion-dollar gaming acquisitions, the strategy ultimately runs through a single set of priorities \u2014 those of the Crown Prince himself.<\/p>\n \n\t\u201cMBS is a massive fanboy \u2014 anime, comic books, video games,\u201d says one producer. \u201cHis dream is to watch something Saudi and be proud. But he\u2019s running a country. When he focuses on entertainment, things move. When he doesn\u2019t, they stall.\u201d<\/p>\n \n\tGary Baum, Dan Bilefsky, Patrick Brzeski and Abid Rahman contributed to this report.<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n