A Look at Saudi Arabia’s Billion-Dollar Gamble on Hollywood

According to the CinemaDrame news agency, Saudi Arabia is investing billions of dollars in the massive Paramount Skydance merger with Warner Bros. — and this is only the latest move in a broader wave of Hollywood acquisitions that, at its core, is seen as an effort to gain favor with Trump, purchase influence in Washington, and provide entertainment for the country’s young and restless population instead of focusing on human rights.

On a weeknight in Riyadh, around 10 p.m., the lobby of a newly built cinema complex is alive with the quiet buzz of a city discovering film. Teenagers gather around snack counters, families move toward escalators, and screening times extend into the late night — 1 a.m., 2 a.m., and even later — adapted to a climate that pushes life indoors after dark. Inside one of the theaters, a late screening of “28 Years Later: The Bone Temple” plays before a diverse audience. The adult-rated horror film touches on themes such as Satanism and references to a notorious British sex offender. Still, a woman in a burqa sits calmly in her seat, seemingly unfazed, holding popcorn and a drink beneath her garment. She watches the violent scenes without hesitation. The only visible censorship is nudity — a zombie with exposed genitalia in the original version is digitally covered with athletic shorts in the screened copy.

This scene may seem unusual to outsiders, but for local audiences it is simply a normal night at the cinema. Eight years ago, there were no cinemas in Saudi Arabia. Today, the country has multiplexes, comedy festivals, esports arenas, and the Red Sea International Film Festival red carpet, which aims to rival Cannes.

Even the war in neighboring Iran, which included drone strikes on Saudi Arabia, has so far had little impact on Riyadh’s nightlife. Cinemas remain open and busy, and moviegoing at night, especially during Ramadan after iftar, has become a popular form of entertainment.

This rapid cultural transformation explains why Saudi Arabia is now spending billions beyond its borders. The country’s bet on entertainment at home is matched by an equally ambitious push abroad — one that is rapidly reshaping Hollywood’s financial balance.

(Saudi investments include THR’s parent company; SRMG, a Saudi public media company, is a minority investor in PMC, THR’s co-owner.)

Eight thousand miles away, this strategy may help finance one of the most significant deals in entertainment history. The $110 billion Paramount Skydance bid for Warner Bros. Discovery — a merger that would combine Paramount’s century-old intellectual property archive with HBO, CNN, and Warner’s global television assets — is backed by $24 billion from Gulf sovereign wealth funds, including Saudi Arabia’s Public Investment Fund (PIF), as well as capital from Qatar’s Investment Authority and Abu Dhabi’s IMI.

In filings submitted by Paramount Skydance to the U.S. Securities and Exchange Commission, it is not specified how much each fund will invest, but informed sources say the total is around $24 billion, with Saudi Arabia contributing approximately $12 billion, and the UAE and Qatar each contributing about $6 billion. Paramount declined to comment.

Saudi support for the Warner Bros. deal goes beyond a typical foreign investment in Hollywood. For Riyadh, the deal provides the Saudi royal family closer proximity to American media power — and by extension, the political ecosystem surrounding it.

On paper, these investors play a passive role. The filings state that the sovereign wealth funds will have no management rights in Paramount-Warner Bros. The structure is designed in a way that allows regulatory approval without triggering a review by the Committee on Foreign Investment in the United States. Brendan Carr, chairman of the U.S. Federal Communications Commission, said in a March 3 interview with CNBC on the sidelines of the Mobile World Congress in Barcelona that he expects the merger to be approved “quickly.”

However, in Hollywood — and in Washington — few believe that $24 billion comes without consequences or political influence, especially in a deal involving CNN, HBO, and an archive including Batman, Superman, and Harry Potter.

For many analysts, these investments are part of a broader effort to reshape Saudi Arabia’s image abroad.

Stefan Roll, a political economist and head of the Africa and Middle East division at the German Institute for International and Security Affairs in Berlin, says: “To me it is completely clear that this is not just about entertainment in the U.S., but also about CNN. It is about soft power. The goal is to rebuild Saudi Arabia’s image in the West.”

Roll believes Saudi Arabia is following the path of Qatar and the United Arab Emirates, countries that have long used targeted investments in media and entertainment to improve their global image. Qatar owns the Al Jazeera network and Paris Saint-Germain football club, and also holds a majority stake in Miramax (with Paramount owning the remainder). UAE entertainment assets include Manchester City in the English Premier League and a 50% stake in Jeff Zucker’s RedBird IMI, which recently signed an $8 billion merger deal between Banijay (Peaky Blinders, MasterChef) and All3Media (The Traitors), creating the world’s largest independent television production company.

Saudi investments have followed a similar pattern. In 2021, the Public Investment Fund (PIF) purchased Newcastle United. Last year, it took full control of the Saudi media group MBC and the Al Arabiya news network — a regional rival to Al Jazeera.

Christian Coates Ulrichsen from the Baker Institute in Texas says: “If anything, Saudi Arabia is catching up in the soft power game.”

Beyond soft power

But not everyone is convinced that “soft power” is the main motivation behind Saudi Arabia’s investments.

F. Gregory Gause III of the Middle East Institute in Washington says: “The effort to improve image matters less, largely because it basically doesn’t work.”

He argues that public opinion in the West remains stubbornly negative toward Saudi Arabia despite years of high-profile spending in sports, entertainment, and media, suggesting that the real goal lies elsewhere: political influence in Washington and domestic legitimacy, rather than fundamentally changing Western perceptions.

This image-rebuilding effort gained particular significance after the 2018 killing of Washington Post journalist Jamal Khashoggi, a killing that, according to the CIA and a 2021 U.S. intelligence report, was approved by Saudi Crown Prince Mohammed bin Salman — the kingdom’s de facto ruler, widely known as “MBS.” Immediately after the killing, Hollywood temporarily distanced itself from Saudi-backed projects. Endeavor returned a $400 million investment from the Saudi Public Investment Fund (PIF), and Legendary Entertainment withdrew from talks that could have led to Saudi ownership stakes in the company. Senior executives also canceled trips to the Future Investment Initiative conference in Riyadh, known as “Davos in the Desert.”

But this cooling of corporate relations after Khashoggi’s murder did not last long. Hollywood quickly returned to Saudi Arabia, encouraged by Washington, which engaged again with Riyadh during the Ukraine war in an effort to stabilize oil prices.

Christian Coates Ulrichsen says: “That normalized things for business leaders.”

This rapprochement accelerated during the Donald Trump era, an administration that maintained unusually close relations with Saudi leadership and encouraged deeper economic cooperation. The full return of Mohammed bin Salman to Washington’s inner circle was cemented on November 18, when he was received at the White House for the first time since Khashoggi’s killing. In the ongoing war led by the United States and Israel against Iran, the kingdom is considered one of the key allies, not least because the strikes target Saudi Arabia’s main regional rival.

For Hollywood, at a time when domestic financing is increasingly constrained, Saudi Arabia’s ability to provide massive checks appears to outweigh any ethical concerns about working with a government accused of suppressing dissent and widespread human rights violations.

Andrew Leber, a professor at Tulane University who specializes in U.S.–Saudi relations, says: “Saudi Arabia can offer multi-billion-dollar commitments that you simply cannot access in the United States.”

This financial appeal is now visible across the entertainment industry. In September, Kevin Hart, Bill Burr, Dave Chappelle, and Pete Davidson were among the headliners of the first Riyadh Comedy Festival, performing to large crowds as Saudi Arabia continued its push to become 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 International Film Festival in Jeddah also that month attracted figures such as Sean Baker, Ana de Armas, and Dakota Johnson.

The rise of celebrity appearances is only the most visible layer of a much deeper wave of investment. On September 29, a consortium led by Saudi Arabia’s Public Investment Fund (PIF), including Jared Kushner’s Affinity Partners and Silver Lake, reached a deal to acquire the video game giant Electronic Arts for $55 billion — one of the largest transactions in the industry’s history.

In October, Eric Figueroa, the former Lionsgate executive, unveiled a $1 billion studio partnership with the Saudi Public Investment Fund, a project linking his new independent venture Arena SNK Studios with Saudi broadcaster MBC Group and Japanese gaming company SNK, which is itself owned by the Misk Foundation, an organization controlled by Mohammed bin Salman.

For critics of Saudi influence in Hollywood, the acceptance of this money reflects broader ethical compromises within the industry. Bryan Fogel, the Oscar-winning filmmaker whose 2020 documentary “The Dissident” explores the killing of Khashoggi, says: “Money is money and power is power.”

After major streaming platforms and studios refused to acquire the film — according to Fogel, due to concerns about damaging business relations with Saudi Arabia — it was ultimately released independently. However, even he, one of the most outspoken critics of Saudi influence in Hollywood, says he does not necessarily condemn those who take Saudi money.

He says: “If you say no to Saudis and take money from the UAE or Qatar or from Peter Thiel, is that better? I’m not sure. We don’t live in an ideal world. I don’t think we will ever see true justice for the killing of Jamal Khashoggi, but a lot of positive changes are happening in Saudi Arabia. You have to keep moving forward.”

In reality, Hollywood never truly stopped seeking Saudi money. AMC Theatres expanded its operations in Saudi Arabia, major agencies continued packaging clients for local projects, and private equity deals quietly continued even in the immediate aftermath of Khashoggi’s killing. One senior Hollywood executive with deep regional ties says: “Every A-list actor has been there trying to find financing or projects. Every single major agency is trying to get their clients into Saudi deals.”

Arab Society

Framing Saudi Arabia’s investments in Hollywood purely as a soft power project aimed at improving the country’s image abroad overlooks a significant part of the story. A large portion of this strategy is not aimed at international audiences, but at the “Arab society” itself.

When Mohammed bin Salman introduced “Vision 2030” in 2016 — a sweeping plan to transform Saudi Arabia’s economy away from oil toward technology, tourism, and media — the project was as political as it was economic.

Stefan Roll says: “He was essentially offering something to his people; not political freedom, of course, but entertainment.”

The policy appears to have worked. Attending major cultural events in Saudi Arabia, one encounters crowds of young Saudis proud that their country has become a regional cultural hub.

In shopping malls in the capital, gaming cafés are alive with loud competitions. Young men — and increasingly women — sit in glass rooms playing on consoles, while friends watch from behind. In a country where traditional nightlife options are limited, video games, cinemas, and concerts have become substitutes for social life — rituals that replace the bar culture of the West.

Roll says: “It is incredible to see the extent of change in Saudi Arabia. This once very closed society has become much more open. You can go to the cinema, you can go to cafés. There is street life, there is art.” He adds: “As part of a governance strategy, providing entertainment so that people do not seek political participation makes perfect sense.”

One American expatriate living in Saudi Arabia, a former entertainment industry executive, says: “It is really remarkable to see how much Saudi Arabia has changed over time. This once very closed society has become much more open. You can go to the cinema, go to cafés. There is street life, there is art.” He says: “It is bread and circuses. Comedy festivals, concerts, football — they keep people entertained.”

From Riyadh’s perspective, if entertainment is seen as a substitute for political participation, the acquisitions of Warner Bros. and Electronic Arts become more than soft power projects. Domestic spectacles require content. And Saudi Arabia is increasingly seeking ownership of the global franchises that supply that content.

More than 60 percent of Saudi Arabia’s population is under 35. Many grew up with superheroes and Harry Potter, with FIFA and Madden — the same intellectual properties now sitting in the Paramount-Warner and Electronic Arts portfolios. Securing access to these IPs is partly a financial investment, but also a way to bring global brands back into the country through high-budget productions, theme park attractions, and large-scale filming projects in Saudi studios — facilities recently established in Qiddiya near Riyadh and in the semi-autonomous AlUla region — all of which are presented to Saudis as signs that the country has “arrived” on the global stage.

The Washington Game

These investments also carry a harder geopolitical logic: creating influence in Washington at a time when Saudi Arabia can no longer rely on oil as its sole leverage tool.

Stefan Roll says: “The Saudis are really investing in people connected to the Trump administration. They are more successful than many other countries in influencing Trump’s policies.” He points to the network of business ties between Saudi leadership and members of the bin Salman family with figures close to the U.S. president, particularly Jared Kushner, Trump’s son-in-law.

Much of the funding for Kushner’s investment firm, Affinity Partners, comes from the same Gulf countries supporting the Paramount deal, with Saudi Arabia’s Public Investment Fund (PIF) alone allocating $2 billion to the firm, which is fully owned by Kushner. Affinity was initially part of Paramount’s bid for Warner, but withdrew in December following increased political scrutiny over the deal. However, some observers still see traces of Kushner’s influence in the new arrangement, particularly in the unusual cooperation between Saudi Arabia, Qatar, and Abu Dhabi, which are traditionally regional rivals.

Despite a fragile ceasefire, the Iran war has created a new set of uncertainties that could affect Saudi and Gulf investments, as well as future commitments. The conflict has brought shipping through the Strait of Hormuz — a vital route for one-fifth of the world’s oil and gas — almost to a halt. Under increasing economic pressure, Gulf states may activate force majeure clauses to exit existing contracts or suspend future investment plans. On March 4, Qatar declared force majeure on liquefied natural gas delivery contracts due to Iranian attacks on the massive Ras Laffan complex. One of Saudi Arabia’s largest oil refineries has also been targeted.

Stefan Roll says: “It is still too early to draw firm conclusions about the impact of the war on Saudi investments. If greater instability pushes oil prices up in the long term, that is something the Saudis would want, because prices are currently too low for them. But they still need to export oil, and if the war keeps the Strait of Hormuz closed, they will be affected.”

In this context, the Paramount–Warner deal looks less like a symbolic investment and more like a node in a broader strategy: anchoring America’s cultural infrastructure with Gulf capital, building proximity to political power brokers, and acquiring intellectual property that fuels both domestic entertainment and international influence.

Reality

However, turning Saudi Arabia’s broad ambitions in entertainment into a functioning production ecosystem has proven far more difficult than issuing nine-figure checks. Despite all the glossy announcements tied to Vision 2030, Hollywood’s track record of practical collaboration within the country has been, at best, uneven. Since Mohammed bin Salman introduced the plan in 2016, the industry has delivered relatively little in return for billions of dollars promised and spent.

What is often overlooked in the ethical debate around accepting Saudi money is the practical risk of working with Saudi capital — including chronic cost inflation, mismanagement, and projects that rarely deliver as expected.

The film “Kandahar,” starring Gerard Butler and shot in Saudi Arabia, grossed less than $10 million globally (though it reached No. 2 on U.S. Netflix upon release). “Desert Warrior,” starring Anthony Mackie and directed by Rupert Wyatt, saw its budget balloon from $70 million to $150 million after delays and costly reshoots. The film screened at the second-tier Zurich Film Festival and was eventually picked up by small independent distributor Vertical Entertainment for a limited U.S. release in spring.

There is also a misconception among American producers that Saudi capital means “easy, no-strings-attached money,” says Ali Jaffar, head of film at MBC Studios in Riyadh. He says that instead of writing blank checks, the country is carefully focused on building a domestic industry “to ensure partners are not just extracting resources but also contributing to knowledge transfer.” For example, Eric Figueroa’s Arena SNK deal is structured in phases: with significant upfront cash, but the full $1 billion only released if the studio meets specific investment targets.

A three-year $350 million agreement between Stampede Ventures, led by Greg Silverman, and the regional agency Film AlUla was expected to deliver 10 films, but progress has been slow. In December, Film AlUla announced the deal was being “reset” to focus initially on four specific productions. When The Hollywood Reporter visited AlUla’s state-of-the-art studios — set against a cinematic landscape resembling a John Ford Western in the northwest of the country — the first project under the partnership, “Chasing Red,” an adaptation of Isabel Ronin’s young adult romance novel, was in production.

Filming in Saudi Arabia has never been simple. On paper, the country offers an uncapped 40% tax rebate, but accessing it remains complex and largely untested. Any tax benefit can be offset by additional production costs in a country still lacking experienced technical crews, from equipment rental companies to assistant camera operators. Large-scale productions — which benefit most from incentives — must import much of their workforce. This is why “Dune: Part Two” was filmed in the UAE and Jordan rather than Saudi Arabia.

“Filmmaking is a cost-of-marginal-analysis business, and Saudi Arabia is not yet the cheapest place to shoot,” says Ali Jaffar. “But that is gradually changing… more productions need to happen so costs can come down and skill levels can rise.”

There are also concerns about corruption. Business Insider this year pointed to a 2022 internal audit at MBC Studios that allegedly flagged extensive spending and conflicts of interest. (Ali Jaffar has said he was unaware of such an audit.) The company has also seen multiple leadership changes: longtime CEO Peter Smith stepped down in 2023; he was succeeded by Christina Wayne, a former Amazon and AMC executive, who later resigned following MBC Group’s $222 million IPO, and was replaced by production chief Samar Akrouk.

This pattern has been repeated across Saudi Arabia’s major entertainment ventures: rapid expansion followed by retrenchment and management turnover. Another flagship project, Neom Media — part of the $500 billion NEOM mega-city project — faced allegations in September of racism, sexism, and inappropriate workplace conduct by senior executives, including then-CEO Wayne Borg, who was also replaced by Michael Lynch.

Saudi Arabia’s push to become an entertainment hub competes with even more ambitious national goals — Expo 2030, the 2034 World Cup, and a series of infrastructure projects that dwarf even billion-dollar studio deals. Even within entertainment, film and television rank below video games, where massive deals often avoid the political scrutiny that media acquisitions face.

Game scholar Joost van Dreunen, a professor at NYU Stern School of Business, says: “The EA acquisition is the second-largest deal in gaming history. EA has a network of 500 million players worldwide. But EA players are not staying up at night thinking about human rights conditions in Saudi Arabia or boycotting games because of ownership changes.”

Despite Hollywood’s fascination with soft power narratives, Saudi spending — from Paramount-Warner to EA and Riyadh Comedy Festival stars — is not only, or even primarily, about Western approval. It is about proximity to Trump and influence in Washington, as well as keeping a young, restless domestic population entertained. The primary audience is not in Los Angeles or London, but in the White House and in the late-night crowds of Riyadh cinemas.

Behind the sovereign wealth funds, the financing of billion-dollar mergers and video game acquisitions, the strategy ultimately reflects a single set of priorities — those of the Crown Prince himself.

One producer says: “Mohammed bin Salman is a huge fan — anime, comic books, video games. His dream is to see something Saudi and feel proud of it. But he is running a country. When he focuses on entertainment, everything moves. When he doesn’t, everything stops.”

Gary Baum, Dan Bilefsky, Patrick Brzeski, and Abid Rahman contributed to this report.

This report was published in the April 8 issue of The Hollywood Reporter magazine.