| LOS ANGELES
LOS ANGELES Nov 27 Entertainment company
Insomnia Media Group said on Tuesday it is receiving a $550
million cash infusion from Egypt-based Borak Holding, the
latest in a growing list of Hollywood companies to obtain
Middle East funding.
Under terms of the deal, Insomnia, an independent
television and film and talent services company founded in 1994
by Bret Saxon and Jeff Bowler, will retain majority ownership
and use the money for acquisitions and additional film
Asset management firm Borak joins an expanding group of
companies from the region who are financing Hollywood as U.S.
private equity investors, who have pumped an estimated $10
billion into the industry in the last three years, have grown
"With oil now at about $98 a barrel, the money from that
region is creating enterprise for everything from real estate
to entertainment," said Insomnia's Saxon, who also serves as
chairman of Transactional Marketing Partners, a marketing
consultancy, in an interview.
Insomnia and Borak are currently collaborating on an
untitled $70 million war epic being shot in Egypt, Morocco and
Saxon has worked with Borak for 12 years outside the
entertainment sector on real estate and energy deals. "Now,
they're looking for more interesting places to put their
money," he said, adding foreign investors were more attractive
in some ways than U.S. investors in Hollywood.
"These investors are more aggressive and easier to deal
with," he said, noting U.S. bankers typically require specific
kinds of distribution deals and stars attached up front before
committing to film and TV projects.
In September, Warner Bros (TWX.N) set up a film and video
game firm with United Arab Emirates' Aldar Properties (ALDR.AD)
and a UAE media company, with the parties investing $500
million to develop films, and another $500 million on video
games. They will also develop a theme park, hotel and cinemas
in the Gulf Arab emirate.
In October, Abu Dhabi, capital of the UAE, hosted its
first-ever Middle East International Film Festival, bringing
together movie moguls like producer Harvey Weinstein and other
studio executives with Arab investors.
POLITICS A HURDLE
Veteran media analyst Hal Vogel, chief executive of Vogel
Capital Management, agrees that more money is flowing into
Hollywood from the Middle East, but said politics could be a
"These investors are more serious with oil prices being so
high, but it's generally difficult to reconcile the political
and cultural base of the region with Hollywood. So I don't know
how sticky this money is," he said, citing a recent controversy
involving the Israeli film, "The Band's Visit."
The film, about an Egyptian band that gets lost in Israel,
triumphed at film festivals around the world, but was banned in
Egypt after the Egyptian Actors' Union protested attempts to
show it as violation of a cultural boycott they support against
The union also pressured the Abu Dhabi festival to
disqualify its entry, according to the New York Times.
Egypt, once viewed as the Hollywood of the Arab world,
produced about 80 films a year at its peak in the 1950s, but
cutbacks in government subsidies brought on an industrywide
slump that is now attempting to reverse itself.
(Reporting by Sue Zeidler; Editing by Jeffrey Benkoe)