By Margherita Stancati and Ben Fritz
LOS ANGELES -- Saudi Crown Prince Mohammed bin Salman has
courted a slew of American tech and entertainment heavyweights to
bring everything from data centers to cinemas to Saudi Arabia, part
of his push to transform the country into a more open and dynamic
society,
Over the past week, he has met top business executives -- from
Amazon.com Inc.'s Jeff Bezos and Microsoft Corp.'s Satya Nadella to
Walt Disney Co.'s Robert Iger.
In the midst of a nearly three-week tour of the U.S., he is on a
mission to reshape a Saudi-U.S. business relationship that was long
based on oil sales and military contracts. The prince wants to win
foreign investment to build a new Saudi Arabia, one less dependent
on oil, with a more vibrant, open economy.
"Our focus in the past was only on oil and gas and commercial
activities" in sectors like defense, said Ahmed Khateeb, a senior
Saudi official in charge of deals in both the defense and
entertainment sectors. "But now we have expanded the relationship
and started to talk about social change -- culture, entertainment
and tourism."
Prince Mohammed even aims to bring Disney to an Arab kingdom
that is home to Islam's holiest sites and best known for its
austere religious practices. The outfits of Disney princesses
wouldn't be permitted on the streets of Riyadh, where women are
required to wear head-to-toe gowns known as abayas.
"Entertainment is the new oil for Saudi Arabia," Faisal Bafarat,
chief executive at Saudi Arabia's entertainment authority, said on
Wednesday, as the kingdom announced a series of new partnerships
with U.S. companies.
Among them: AMC Entertainment Holdings Inc. said it would open
Saudi Arabia's first movie theater in over three decades later this
month.
Prince Mohammed, who is Saudi Arabia's day-to-day leader, has
sought to project a softer image of the kingdom. He has become a
patron of Saudi artists, whose work is being exhibited during his
tour. He has in appeared in public wearing suits with no ties, and
even stopped at a New York Starbucks for coffee with Michael
Bloomberg.
But the kingdom remains one of the world's most conservative
countries, and the opaque nature of a far-reaching corruption probe
last year spooked the corporate world. The old image of Saudi
Arabia is hard to overcome.
When President Donald Trump last month used colorful cardboard
posters to illustrate the billions of dollars of military equipment
the Saudis are buying from the U.S., Prince Mohammed, who sat next
to him, looked visibly uncomfortable.
"It's peanuts for you," Mr. Trump told the prince, who shook his
head and smiled.
Privately, many Saudis seethed over the president's comments,
which they felt blunted the kingdom's message. "They think we are
only about oil, military and camels," said a Saudi close to the
official delegation.
To be sure, the bulk of Saudi business with the U.S. remains oil
and weapons. Over the weekend, Saudi Arabia signed a $450 million
joint venture with Boeing Co. to maintain and repair military
aircraft in the kingdom, part of a broader plan to create over
40,000 domestic defense jobs by 2030.
Broadening Saudi Arabia's commercial ties with the West has
become a top priority in the past two years since Prince Mohammed
unveiled a plan to diversify its economy away from the oil reserves
that built its wealth.
The kingdom is planning to publicly list its state oil giant,
known as Aramco, to raise capital for investments in other sectors.
At the same time, American shale-oil companies have vaulted U.S.
crude output ahead of Saudi Arabia's production for the first time
this year since the early 1990s, changing the economic relationship
between the two countries.
Prince Mohammed's team is negotiating a stake in the world's
largest talent agency, Endeavor LLC, and working on deals to build
data centers with Amazon and Google's parent company Alphabet Inc.
Saudi Arabia's sovereign-wealth fund has taken big stakes in tech
companies like Uber Technologies Inc.
On Tuesday, Saudi officials showed up at Disney's offices with a
once-unthinkable idea: a Disney presence in Saudi Arabia. They want
Disney to be part of several entertainment hubs being planned in
their country, according to people with knowledge of the
matter.
Saudi Arabia "is keen in building a strategic partnership with
these companies that include theme parks, resorts, live shows and
everything in between," said a spokesman for Saudi Arabia's General
Entertainment Authority, singling out Disney, Warner Bros. and
Universal.
Disney has given no indication it will support the Saudi
pitch.
"Like so many places in the world, they are interested in
exploring the idea of having a Disney park," a Disney spokeswoman
said before Tuesday's meeting. "They will be presenting some
concepts and we will respectfully hear them out."
Saudi officials have also discussed film and television
partnerships with top executives from Netflix Inc., Time Warner
Inc.'s Warner Bros. and Comcast Corp.'s NBCUniversal, some of whom
attended a dinner Monday for Prince Mohammed hosted by 21st Century
Fox Inc. and News Corp. chairman Rupert Murdoch. News Corp. owns
the Wall Street Journal.
Among the prominent businessmen and royals detained on
undisclosed charges of corruption was Prince al-Waleed bin Talal,
one of the world's richest men and a prominent Disney investor.
Prince al-Waleed, who bailed out the financially troubled Euro
Disney resort in 2014, first approached the entertainment giant
last year about a theme park in Saudi Arabia, but talks halted
after his detention in early November, according to people familiar
with the matter.
Prince al-Waleed, who has since been released and maintains his
innocence, wasn't available for comment, a spokesperson said.
Saudi Arabia's finance minister, Mohammed al-Jadaan, who is
traveling as part of the delegation, said would-be investors have
nothing to worry about -- and that the corruption crackdown has
created new opportunities for them.
"We are basically creating a level-playing field" for investors,
Mr. Jadaan said.
--Benoit Faucon contributed to this article.
Write to Margherita Stancati at margherita.stancati@wsj.com and
Ben Fritz at ben.fritz@wsj.com
(END) Dow Jones Newswires
April 05, 2018 08:48 ET (12:48 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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