A Frieze investor is still negotiating how to pull out of a $400 million deal with Saudi Arabia.
Paramount Pictures Studios will be the venue for the inaugural Frieze Los Angeles fair in February 2019. Photo courtesy of Paramount Pictures Studio.
In January, Datelinereported that the Public Investment Fund of Saudi Arabia was making a $400 million to $500 million investment—or a 5% to 10% stake—in the Hollywood talent agency Endeavor, the majority shareholder of the art fair and art magazine company Frieze. At the time, the Saudi government was looking to diversify its investments to get out of its dependency on oil, and had $2.67 billion to spend on entertainment properties. The Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud (MBS for short) was touted as a progressive who lifted the cinema ban in his country, and was roundly fêted upon his arrival to Los Angeles.
That perception changed when the journalist Jamal Khashoggi entered the Saudi Arabian consulate in Istanbul and did not come out alive. In October, U.S. intelligence intercepted information indicating that the Saudi government had planned to murder the writer, who was critical of the Crown Prince, when he entered the consulate to obtain divorce papers so he could remarry. As MBS has appeared more and more culpable, U.S. companies have distanced themselves from the Kingdom, with many pulling out of the business conference in Riyadh that was set to be “Davos in the Desert.” Soon, the Hollywood Reportercited sources saying that Endeavor was “monitoring” the situation and that they would pull out of the deal, despite the fact that it accounted for a big chunk of their future balance sheet—which involves launching the first edition of Frieze Los Angeles in February 2019.
In early December, a briefing by the CIA director Gina Haspel caused U.S. Senators to conclude that MBS was complicit in the grisly murder of the Virginia-based Washington Post reporter. President Trump said that the Crown Prince could have ordered the murder—”maybe he did and maybe he didn’t!”—but “in any case” he would stand by Saudi Arabia to support its arms deals with the U.S.
Despite the recent intelligence pointing to the Saudi government’s role in the murder, The Art Newspaper has anonymous sources saying that Frieze’s backer has still not yet given back the $400 million in Saudi money, but that it is “in process” of giving it back and that the deal is “complicated.” A spokesperson for Frieze said the company has consistently declined to comment on the nature of its deal with Endeavor.