While Warren Buffet has proclaimed that the recession is over and that we now need to keep investing in the US economy to help its recovery, Rupert Murdoch has bought a 9.09% stake in the Rotana Group. Rotana is a private company controlled by Saudi Prince Alwaleed bin Talal, who is looking to make it public. Playing with house money, bin Talal is now searching for a financial advisor to determine when he should go public, and Murdoch is a good guy to have on your side.
News Corp. will invest $70M with an option to double its shareholding within the 18 month span. The deal would bring in not only new technology and media to Saudi Arabia, but also expertise in the television and movie production business. Rotana is already broadcast in Saudi Arabia via satellite and owns the largest Arabic film library as well as running a retail movie store. Both Murdoch and the Prince are shareholders in each other’s companies, both under 10%. But what this also does is show good faith to the Middle Eastern country, something that we Americans have a difficult time perceiving.
Perhaps this agreement will help to ease anti-Arab sentiment which has developed since 2001. But I highly doubt this. In the end, the Kingdom will do whatever they please and will spend endless amounts of cash to do it. On the surface the $70M is an investment of good faith, to show that we are still allies with the country. But really, we don’t need them and they don’t need our money. So, this deal runs far deeper than just movies and satellite coverage…it’s a political statement.
Comments are closed.