Saudi’s New Investment Strategy in Media & Entertainment

Saudi Arabia's Crown Prince Mohammed bin Salman media strategy
Saudi Arabia's Crown Prince Mohammed bin Salman. Image: The Media C-Suite; original photo credit Alastair Grant/AP.

Saudi Arabia’s investment activities point to a determined strategy to make use of the Media & Entertainment industry’s massive soft power. 

In what appears to be a well-designed strategy, the Kingdom’s massive sovereign wealth is backing ambitions to consolidate a regional media market with over 400 million Arabic language speakers and bridge the Arab world to the next generation of global audiences.

So far this year, Saudia Arabia has quietly invested at least US$15.3 billion into carefully selected Media & Entertainment assets. These investments increase participation in a global industry worth over US$2.4 trillion in annual revenues. On the surface, this seems like prudent investing of sovereign wealth. However, such sums of capital also provide a stake in, and influence over, an industry with the proven ability to change global public perceptions. 

In filings submitted to the US Securities and Exchange Commission on August 15, 2022, investments made by one of Saudi Arabia’s largest sovereign wealth vehicles are reported to have increased the Kingdom’s holdings in key Media & Entertainment companies.  The disclosure of Q2 activity by the Saudi Public Investment Fund (PIF) show over US$7.63 billion was invested into the industry via Activision Blizzard (US$2.9 billion), Alphabet (US$464 million), Amazon (US$432 million), Electronic Arts (US$1.94 billion), Live Nation Entertainment (US$1 billion), Meta Platforms (US$474 million) and Microsoft (US$473 million). 

See PIF’s full SEC filing here.

The PIF has previously disclosed direct investments into Disney (US$495 million).  Additional indirect investments into Media & Entertainment globally are thought to be held by PIF capital involvement in large private equity funds such as Black Stone.

These public disclosures of investment into the global Media & Entertainment ecosystem may be the tip of the iceberg in terms of Saudi Arabia’s ambitions to awaken a more positive and globally constructive Arab world for the sake its own national economy.  

What Saudi Arabia requires most, to do both, is to overcome a difficult public perception. 

To say that Saudi Arabia has a public relations issue is an understatement of global proportions.  Engaging expensive political lobbyists and mind bending PR firms can only do so much, and as often as not, backfire spectacularly.  Global perception of an ultra-conservative population having little in common with, and hostile to, the rest of the world remains pervasive.  Deeply embedded public consciousness of ties to religious extremism, global terrorism and the 2018 killing of journalist Jamal Khashoggi in Istanbul are monuments to the Kingdom of Saudi Arabia’s challenge to open its peoples, and its economy, to a more globally connected future. 

A combination of foreign lobbying disclosures and a series of corporate investment announcements indicate that the centrally-directed economy of Saudi Arabia may have aligned its substantial advantages onto a strategy that finally offers some hope for a true renaissance.  That potential is backed by the PIF, one of Saudi Arabia’s pools of sovereign wealth with an estimated US$620 Billion in available capital. 

The Public Investment Fund is overseen directly by Saudi Crown Prince Mohammed Bin Salman Al Saudi as Chairman.  Known colloquially as MBS, the Chairman of PIF is also the head of the Kingdom’s Council of Economic and Development Affairs and is the primary political influence in the Kingdom.  His official economic development plan, known as Vision 2030, is focused on the establishment of several industries new to the Saudi economy, with one in particular gaining strategic prominence.

See the official Saudi Arabia Vision 2030 presentation here.

Working through the PIF supported development organisation known as NEOM, Saudi efforts to open the Kingdom to the rest of the world are focused on a 25,000 square kilometre gateway city being built on the shores of the Red Sea.

That city is destined as the heart of a new media and entertainment production industry offering next-generation employment opportunities within the Kingdom’s 34.9 million people and a regional content market spanning over 400 million people with common language and cultural references.  But jobs are only a piece of the pie.  The rehabilitation of the Kingdom’s image on the global stage and its positive participation in global affairs would seem to lay at the heart of a recent strategy to take a leading role in the wider Media & Entertainment industry.  Such an objective would provide influence over that industry’s exercise of “soft power” far in excess of anything paid Lobbyists or PR agencies could ever offer. 

Indications of this strategy emerge in the form of foreign lobbying disclosures in the US providing information on Saudi Arabia’s initial efforts to influence US public opinion through the production of news content. 

In filings reviewed by the Media C-Suite and submitted under the US Foreign Agents Registration Act on June 7, 2021, a Saudi company named Tagnia ETS paid a Lebanese media consultant based in the US named Mr. Elie Nakouzi over US$150,000 to help establish an English-language news production platform under Nakouzi’s US company, Prime Time Media. 

Read the full Foreign Agent Registration filing.

Prime Time Media was issued a purchase order from Tagia ETS with a stated payment figure of US$1.6 million for “English Content” intended to be disseminated over a new “news Platform”.  

The foreign agent disclosures further report that Tagnia ETS, acting as Prime Time Media’s foreign principal, was being supervised and financed by the Saudi Ministry of Information.  Tagnia ETS is an engineering solutions subsidiary of the Saudi Technology Development and Investment Company and is wholly-owned by the Public Investment Fund. 

The story was picked up on by US broadcaster CNBC in July of 2021, but received little other coverage.

Read the full CNBC article.

At some point afterwards, the optics of using “agents of a foreign government” to influence the hearts and minds of the US population by means of Saudi-sponsored news content may have seemed ill-advised. A new strategy was likely welcomed in the lead up to a political thawing of relations with official Washington D.C.

Saudi Crown Prince Mohammed bin Salman greets US President Joe Biden in Jeddah on July 15, 2022.
Saudi Crown Prince Mohammed bin Salman greets US President Joe Biden in Jeddah on July 15, 2022. Photo credit: The Saudi Press Office.

Enter the MBC Group. 

The Middle East Broadcasting Centre, operating as the MBC Group, is the largest media conglomerate in the Arab world with full vertical integration across content production, distribution and delivery to an expansive Arabic language market.  It was privately owned before the ascent of MBS, but is now majority owned by Saudi Telecom Company, or STC. STC is majority owned by the Public Investment Fund.  The MBC Group has held its headquarters in Dubai since 2002, but is rumoured to soon be re-locating its executive offices to Riyadh. 

The MBC Group has been on a buying spree.  In March of this year, the MBC Group acquired a 30% stake in the Antenna Group, a Greek media conglomerate focused primarily on the Greek language content market and focused on Eastern Europe.  The MBC Group invested US$249 million for its 30% stake in Antenna.  On the surface, this makes sense for the MBC Group’s strategy to enlarge and improve its production capacity by supporting the Antenna Group’s production infrastructure investments in Greece.  By shifting some production of its own content to an EU country, it also qualifies for expansion of its streaming services to the EU market, which has strict quotas on local EU production of streaming libraries viewed within the EU’s content market. 

In an unlikely coincidence, the New York Times reported on July 29th, that the Antenna Group is now the lead contender for acquisition of Vice Media, the Canadian-based publisher that is a growing producer of award-winning English-language news and television content with offices in Los Angeles, New York, London and Paris.

Read the full New York Times article here.

On August 2, 2022, Reuters reported that Forbes had hired Citigroup to find a buyer. The opportunity for the Kingdom of Saudi Arabia to indirectly own controlling stakes in influential news, current affairs and cultural publications with global reach is maturing.  Such publishers have a decisive influence on the perception of commercial activities undertaken by the wider Media & Entertainment industry.

Read the Reuters article.

Earlier, in February, the MBC Group and NEOM announced a joint venture to develop a AAA-rated video game development centre in Saudi Arabia for “high-production-value” games targeting local, regional and international gamers. 

Read the NEOM Press Release here.

The Kingdom’s multi-billion dollar equity stakes in the industry’s leading gaming publishers, including Electronic Arts, Activision Blizzard and Microsoft elevate both lucrative and influential prospects for shifting development of gaming content to new state-of the-art facilities sponsored by very deep pockets; in Saudi Arabia.

The apparent strategy to propel the peoples and economy of Saudi Arabia into a globally open future would seem to be underway.  With a rich tapestry of history and culture, stories from the Arab world offer valuable content for dissemination across global audiences.  Financial stakes in the content distribution and delivery mechanisms of global media conglomerates offer a means to push such content out, while stakes in the MBC Group would retain production of such content within Saudi Arabia and its adjacent regions (which now include Greece). 

The continuing convergence between film, television and video games seems to be a component of the Kingdom’s strategy.  Influence over, and potential content rights, to highly popular video games offer additional global reach to a nation with the money and ambitions to grow beyond its insular reputation.  The ability to report on these developments in a positive manner through influential news and current affairs platforms may be the deciding tactic in a broader strategy to change global perspectives on the wider Arab world, with Saudi Arabia at its core.  

(A version of this article was first published on August 19, 2022)

2 Comments

    • I would think they are targeting both Saudi subjects inside the country and the rest of the world, albeit in different ways. If (and it’s a big IF) they can start a proper, quality production market inside Saudi, then it would mean lot’s of jobs and a booming push toward modernisation. They can throw money at that all year long and get nothing if international film-makers won’t go Saudi to shoot.

      But, if they can influence international film-makers to both tell Saudi neutral or Saudi positive stories and push the vast Arab story-telling traditions into international markets, then attitudes toward Saudi at the public-level may improve. Politics will then follow.

      Smart, if its actual strategy.

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