Entertainment is only the latest industry to benefit from a recent outpouring of Middle Eastern money. Gambling and strip clubs may be haram (forbidden) by Islamic law, but Arab investors have spent at least $10 billion on top Vegas and Hollywood brands in the last year. Universal Studios and Dubai property-developer Tatter are building a $2.2 billion, 22 million-square-foot theme park in the city-state; Warner Brothers and Aldar (Abu Dhabi’s largest real-estate firm) have cut a $2 billion deal to build another local megastudio and coproduce a series of films and videogames in both English and Arabic. While Arab players are following a trail of foreign money that has often ended in the red (the Japanese lost billions in Hollywood in the 1980s and the Germans did the same in the 1990s), they don’t want only cash returns: they’re looking for expertise, soft power and (controversially) global cultural legitimacy.
The investments are part of long-term plans to build international entertainment hubs for tourists and the domestic market alike. Already, the Gulf boasts such destinations as The World, a man-made globe of mini-islands, and there are plans for Arab outposts of both the Louvre and the Guggenheim. Teaming up with American media magnates takes the strategy to the next level. American media analyst Harold Vogel says the return is partly measured in acquired technical expertise that build “indigenous entertainment industries.”
The Arab market could be huge. Sixty percent of people in the Arab world are under the age of 25 and the appetite for entertainment is exploding. Over the next five years, PriceWaterhouseCoopers predicts, the Arab world’s entertainment and media market will grow by almost 60 percent to $10 billion annually—outpacing growth in markets like Brazil and Russia.
Next month Viacom and Dubai’s Arab Media Group (AMG) will launch MTV Arabia to 35 million households. And Showtime Arabia, the largest pay-television network in the Middle East and North Africa, has plans to roll out Arabic-language soap operas and talk shows.
Clearly, though, there is an element of vanity at work in some of these projects. Dubai’s deal with MGM is widely seen as a savvy business choice, since the Vegas gaming market has been exceptionally hot, but ego is always in play in Vegas. “If you are Middle Eastern royalty, it is nice to be able to say ‘Next time you’re in Vegas, I’m going to put you up in my five-star hotel’,” says hotel-industry expert Chris Daly. And many industry specialists are skeptical that Dubai or Abu Dhabi will be able to sustain their grandiose theme parks. “It is a ruse to think they can support projects worth several billion dollars,” says Dennis L. Speigel, president of International Theme Park Services, who has worked with both Universal and Paramount. He notes that Hong Kong Disney, a $3 billion investment with 5 million visitors per year, is still not breaking even. “Theme parks need a core local market in order to succeed. Even if every one of Abu Dhabi’s 1.8 million people visited a $2 billion property, they would lose so much money it would be phenomenal,” Speigel says. “There is this frenzy of who can land the biggest fish.”
But for Arab investors, there is another upside to buying into Hollywood—the ability to influence the way Muslims are shown in the movies. Christopher Davidson, a Middle East expert at Britain’s Durham University, predicts Arab money will bring “more and more Arab heroes in Hollywood movies.” Vogel says the Middle Eastern investments “are already influencing” plots and projects, noting that Peter Berg’s new thriller about Islamic extremism, “The Kingdom,” is the first Hollywood blockbuster to gain permission to film in Abu Dhabi, and features Palestinian actor Ashraf Barhom as a heroic Saudi Arabian police officer alongside Hollywood star Jamie Foxx. Warner Bros. confirms that Abu Dhabi will have a say in projects financed by the $1 billion joint fund. “All you hear about in this region in movies is war, fundamentalism and terror,” says Riyad al-Mubarak, chief executive of the new Abu Dhabi Media Co. “If we come across a good movie about Arabs, and it is a good investment, then why not?”
There is also the issue of how Western entertainment deals will go down in the Arab world itself. Plans to open a Dubai branch of the restaurant chain Hooters, known for its waitresses’ revealing outfits, are already causing upset. And Dubai World’s investment in MGM gambling operations are so “controversial” (in the words of one DW spokesperson) that the company refused to comment on how it reconciled (or didn’t) with Islamic law. “The investment in MGM was definitely non-Islamic Sharia-compliant,” says one Dubai-based banker who specializes in Sharia-compliant investments. “That’s Islam 101—no investment in casinos, pork or alcohol.” Some worry about what such moves will provoke. “People in Dubai are beginning to see their own government as non-Islamic,” says Durham University’s Davidson. “This will have serious domestic implications in terms of terrorism in the coming years.”
For now, these Arab nations are still chasing the stars. At last week’s first-ever Abu Dhabi film festival, Hollywood producer Harvey Weinstein was on hand to give the opening speech. Speaking about the best films ever made, Weinstein remarked: “If it’s great, it travels.” Clearly, Gulf media moguls are counting on it.
