AMC Theatres pursues Saudi expansion despite journalist's killing

LAS VEGAS (Reuters) - Theater operator AMC Entertainment Holdings is forging ahead with its expansion in Saudi Arabia, Chief Executive Adam Aron told Reuters, after a journalist’s killing six months ago clouded the future of the kingdom’s newly opened cinema market.

FILE PHOTO: Two Saudi men take a selfie at Saudi Arabia's first commercial movie theater in Riyadh, Saudi Arabia April 18, 2018. REUTERS/Faisal Al Nasser

Aron said his company reconsidered its plans to open dozens of theaters, which the company announced last spring, following the October murder of Washington Post writer Jamal Khashoggi in a Saudi consulate. The killing sparked an international outcry.

The CIA and some Western countries suspect Saudi Arabian Crown Prince Mohammed bin Salman ordered the killing just over six months ago. Saudi authorities vehemently deny he was involved.

“It certainly made us think in great depth,” Aron said in an interview this week in Las Vegas at CinemaCon, an annual convention for theater owners.

“What we concluded at AMC is that if we continued with the opening of theaters in the Middle East, that we were doing something very good for the people of the country,” he said. “And we decided that what was in the best interest of the people was the right course of action for us.”

AMC, the biggest cinema chain in the United States and the world, is working on the theaters through a partnership with Saudi Arabian sovereign wealth fund, the Public Investment Fund (PIF).

John Fithian, president of the National Association of Theatre Owners, said on Tuesday that at least three theater chains were moving forward with plans to add screens in Saudi Arabia. He declined to name the companies.

Fithian told reporters the killing of Khashoggi was “a tragic, awful human rights violation”, but added: “I don’t think it’s our business to make foreign policy as a trade association.”

“The idea of having the freedom to see movies in a country ... can only help to open up thinking in that country,” he said. “Movies have always been a sword for freedom.”

The Saudi government communications office did not immediately respond to a request to comment.

A year ago, Saudi Arabia lifted a nearly four-decade ban on cinemas. AMC screened the first film, Walt Disney Co’s superhero hit “Black Panther”, at a movie house in Riyadh, and other companies announced plans to operate theaters in the country.

But shortly after Khashoggi’s killing, cinema chain Vue International put on hold plans to open as many as 30 locations in Saudi Arabia, Chief Executive Officer Tim Richards told The Guardian newspaper at the time.

Hollywood talent agency and media company Endeavor also returned a $400 million investment to the Saudi Arabian government to protest the killing.

Aron said his company had a “significant number” of theaters under lease in Saudi Arabia and many will open in 2019. He also expects to have “50 theaters open four to five years from now”.

The AMC theater in Riyadh has shown dozens of films over the past year, he added.

“The theater has been immensely popular,” he said, “as you would expect in a city of 7 million people that now has two movies theaters, in a country that likes movies and saw movies frequently, just not in theaters.”

Reporting by Lisa Richwine; Editing by Bill Tarrant, Sonya Hepinstall and Muralikumar Anantharaman