After an initial run of investments in Hollywood-inspired real estate projects, UAE investors are now being lured in by Western filmmakers as they look for new areas of revenue.
Western conglomerates such as Paramount, Universal, DreamWorks Animation, MGM and Marvel have inked megabucks deals to open a theme park in Dubailand, and they want to repeat their success in an upcoming film industry in the UAE on the back of diversification plans of the government and enough capital in the country.
However, investors from the country are being selective in choosing and opting for foreign projects that seem commercially viable to them. The aim is to have deals that are broader than simple film-financing and must be mutually beneficial.
"It's no longer about investing in just about anything. People will put their money in projects where it makes sense to them," Nayla Al Khaja, an Emirati film producer told Emirates Business.
"This time it's not the case of 1970s oil boom when rich Arab investors invested for getting to be with their favourite stars. The current generation of Arab businessman wants to see good returns on their investment. It has to be a two-way deal and the age of feeding on anything American or European is past. There has to be something that the viewers can relate to here," she said.
A recent production of Sonia Kriplani from the UAE, which won a silver peacock at Cannes Film Festival, has seen a number of investment firms warming up to the idea of seeing films as a business opportunity. "Following our recent accolades at the Cannes we received a very positive response from investors to finance movies and Hollywood tie-up productions," said Kriplani.
Abu Dhabi and Dubai – the two aspiring film industry hubs in the Arab world – look forward to long-term relationships with Hollywood big-wigs. But it's not just about investing in foreign projects. They look at the bigger picture and want Hollywood companies to share with them the nitty-gritty of filmmaking, right from talent management to film-crew staffing. And this also includes bringing US productions to their own territories. Representatives from the two emirates discussed deals with international filmmakers at the recently concluded Cannes Film Festival.
Both emirates are trying to promote film industry in their own ways. In Dubai, Hollywood startup Film Dept [from Mark Gill and Neil Sacker] has signed a deal with MBC to fund films and Sheikh Waleed is one of its board members. Dubai has been at the forefront in promoting itself as the ideal choice for Western filmmakers by bringing international celebrities such as George Clooney and Sharon Stone to its film festival.
An increasing number of filmmakers are coming to the region to establish film schools. The New York Film Academy has established a school to help train aspiring filmmakers, the most recent one being the Manhattan Film Academy-Dubai (MFA-Dubai), which has set up base in Dubai Studio City.
It has also been reported that Dubai is in talks with Disney executives about the possibility of establishing a multimedia fund that will provide finance for Pixar features based on Middle Eastern-themed stories.
However, the biggest boost to the industry will come once Studio City in Dubai is operational. The project is slated to be complete by the end of this year and once ready it may offer a regional rival to the studios in Morocco's Ouarzazate for international productions. Moreover, it will offer a foundation for the much-needed financial incentives that Dubai authorities will need to offer foreign productions to come here.
Abu Dhabi, a little low-profile in publicising its media growth, is just as serious as Dubai in setting up a film industry. Last year, the emirate signed with Time Warner a multi-billion-dollar multimedia deal that includes a $500 million (Dh1.8 billion) film fund and $500m vidgame fund, plus finance local-language production of three to seven films a year with budgets of less than $5m each. It also will entail production facilities and cinemas.
Last October, the emirate also unveiled the inaugural Middle East International Film Festival and Film Financing Circle and roped in Harvey Weinstein, Relativity's Ryan Kavanaugh and Hyde Park Entertainment's Ashok Amritraj to attend the event.
The emirate has also announced the appointment of former Disney international executive vice-president Ed Borgerding as chief executive of the Abu Dhabi Media Co. He will be responsible for overseeing the implementation of the Warner Bros deal. That's not all. There has been news flowing from the grapevine that a high-profile figure could become the head of Abu Dhabi's Film Commission and attract foreign productions to the emirate. The city is also venturing into financing projects with the establishment of Abu Dhabi Film Financing Circle. This will bring together international film executives with Middle Eastern investors.
With hopes for a relationship with Hollywood, the question, however, still lingers on if investors from the region are ready for the big leap – investing in foreign film projects or buying studios like France's Vivendi or Japan's Matsushita and Sony did. "Big players are already investing. From the UAE we have big players going ahead with such deals but it will take time before you can expect deals on the levels of Matsushita or Sony. The entire Arab world has immense potential and it has been largely left untapped. No way Hollywood would want to miss out," said Anu Mahal, a US-based Venture Capitalist involved in organising funding for Hollywood movies from outside America.
Indian company Reliance Big Entertainment (Rbel), the entertainment arm of the Anil Dhirubhai Ambani Group (Adag), is in negotiations to produce three major movies featuring mainstream Hollywood stars, it has been reported.
It is not clear if the company will sign deals with Hollywood studios or with the stars themselves. The estimated deal size is said to be around $300 million (Dh1.1 billion), one of the biggest forged by an Indian entertainment company.
It is being said Rbel could announce film projects with big names in Hollywood such as Tom Cruise, George Clooney and Will Smith.
The movies will target global audience and will be mainstream Hollywood releases. Adag has multiplex operations in the West Coast of the United States as well as DTH, animation and film production plans.