Abu Dhabi pumps oil money into media projects

An Emirati technician and his colleague talk at a TV studio in the TwoFour54 media complex in Abu Dhabi. (AP)

By ADAM SCHRECK | AP

Published: Mar 8, 2010 22:37 Updated: Mar 8, 2010 22:37

ABU DHABI: With an economy based on pumping oil and landmarks that include one of the Mideast's grandest mosques, Abu Dhabi has little obvious in common with freewheeling media magnets like Hollywood or midtown Manhattan.

This week, the emirate is hoping the world takes another look. The city-state, best known of late for bailing out its flashier neighbor Dubai, is bringing together some of the industry's biggest names for a summit that will temporarily shift much of the world's media and entertainment elite to a luxury hotel on the Arabian Gulf.

Headliners at the event starting Tuesday include News Corp.'s Rupert Murdoch and Google Inc. chief Eric Schmidt. The idea is to entice "the best and the brightest media minds," said Edward Borgerding, a former Walt Disney Co. executive who is now CEO of the state-owned Abu Dhabi Media Co., the event's host. But the gathering is also a coming-out party for Abu Dhabi, which has seen its own star rise as nearby Dubai's fades, serving as a reflection of the emirate's growing weight in the media industry.

The UAE capital has increasingly been using its immense petroleum wealth to extend its media reach overseas, even as it shows little sign of easing restrictions on journalists or Internet users at home.

It has set up a company to bankroll Hollywood films, built an office park to house foreign news agencies, and spent billions to invest in microchips that power the electronic gadgets that increasingly serve as platforms for media consumption.

It is also partnering with established Western brands, including National Geographic and Comedy Central, to develop Arabic-language programming, and is splashing out on big-name concerts for eager audiences at home. Recent shows featured Rihanna, Aerosmith and Beyonce.

The investments are part of a broader push by the government to diversify the economy away from oil and provide a broader range of jobs for locals.

They serve another purpose too -- to establish Abu Dhabi as a tolerant, cultured and internationally relevant Arab society.

"We work to promote a more progressive point of view of this region," said Mike Fairburn, director of marketing and planning at Flash Entertainment, a government-created concert and events promoter. "A big part of popular entertainment is about challenging certain perceptions."

Officials insist they are creating something unique. A big part of that effort revolves around a project called TwoFour54, named after the city's geographical coordinates.

The project's sand-whipped office park in a rapidly developing corner of the city has already lured a number of international news agencies, including CNN, which also maintains an office in Dubai. The broadcaster is using its Abu Dhabi site to produce a daily news show for its international channel.

TwoFour54 also includes a media training academy primarily offering short skills-based courses, as well as production facilities and a venture capital arm to invest in promising Arabic media startups.

"We see ourselves ... as providing an environment that is supportive and conducive and stimulating for creative people to want to be here," said Wayne Borg, chief operating officer of TwoFour54.

Other state-backed projects are aiming further afield.

Earlier this year, Abu Dhabi's Flash Entertainment bought a 10 percent stake in the parent of Ultimate Fighting Championship, the Las Vegas-based mixed martial arts producer that makes most of its money through pay-per-view sales and video game licenses.

Meanwhile, Abu Dhabi Media set up a film production and financing arm called Imagenation that aims to pump more than $1 billion into feature films over five years.

The company produced last year's family adventure film "Shorts" by director Robert Rodriguez, and has since announced co-production deals for a number of other movies, including the upcoming political thriller "Fair Game" starring Sean Penn.

The venture is symbiotic. Hollywood gets money it needs after funding sources like investment banks and hedge funds tightened purse strings amid the global meltdown. Abu Dhabi gets international cachet.

"If you can just get the brand out there with the name Abu Dhabi in it, it promotes Abu Dhabi as a decent, legitimate business partner," said Christopher Davidson, a professor at the University of Durham who has written extensively about the UAE.

He said one goal might be to persuade a studio to set part of a major film in the city, though he added that freedom of expression remains a concern.

"The reality is it's still a traditional political system, and there are limits," he said.

Davidson estimates the state will spend at least $2 billion to $3 billion over five years just on physical infrastructure and seed money for the media sector. But there is always more should things really take off.

"This is small change for Abu Dhabi," he said. "They can throw such massive resources at this." ¬