AMC Entertainment Holdings Inc., controlled by China's Wanda Group, was granted the first cinema license in Saudi Arabia and plans to open 100 theaters with the country's Public Investment Fund.
AMC, the world's largest exhibitor, and the Development & Investment Entertainment Co., a subsidiary of Saudi Arabia's Public Investment Fund, plan to open as many as 40 cinemas within five years and 60 more by 2030, according to a statement Wednesday from the Leawood, Kan., company.
There are no commercial theaters in Saudi Arabia and plans to open them present challenges for the conservative kingdom, such as whether men and women can sit together and what types of movies will play. The partners are aiming for "50 percent market share of the Saudi Arabian movie theater industry," the parties said. The first AMC in Saudi Arabia is scheduled to open April 18 in the capital, Riyadh.
The announcement coincides with the U.S. visit by Crown Prince Mohammed bin Salman, who is looking to burnish his image as the leader of a more open Saudi economy.
The goal is to open 30 to 40 movie theaters in 15 cities in the next five years, and up to 100 in the next decade in 25 cities, Adam Aron, AMC's chief executive officer, said on a conference call. Cinemas won't initially be segregated by sex, though some show times may be exclusive for women or men, he said.
"The rules of operation are in formation as we speak," Aron said.
In terms of the types of films, Aron said AMC will exhibit all major releases from Hollywood studios that "are appropriate for the Middle East." Saudis are likely to see Hollywood's major hits coming out in the second quarter, he said, as well as homegrown fare.
"I expect to see a Saudi film industry emerge out of this," Aron said. The company is working on which movie will be the first to open in the country.
The executive estimated the local movie market could generate $1 billion annually in the next five years. The company expects its revenue split with studios to be in line with other countries in the region. Tickets are likely to cost $16 including taxes, Aron said.
The Saudi crown prince met with Los Angeles Mayor Eric Garcetti and media industry leaders including Rupert Murdoch and Warner Bros. chief executive Kevin Tsujihara. The Public Investment Fund is poised to take a $400 million stake in the Hollywood talent agency Endeavor as part of plans to diversify the kingdom's oil-based economy.
In March, Saudi Arabia said it was ending a three-decade-long ban on cinemas and planned to open more than 350 theaters by 2030. The industry is expected to contribute about $24 billion to the economy and add more than 30,000 permanent jobs.
Imax Corp. is also interested in opening theaters in the country -- it operates the only cinema screen, which is in a science museum.
Business on 04/05/2018