AMC Entertainment Holdings, the world's biggest cinema chain, has decided to exit Saudi Arabia's fast-growing market in the face of intense competition.
The decision, announced Tuesday, comes less than five years after AMC opened the kingdom's first movie theater following a decades-long ban.
Saudi Arabia lifted the ban on movie theaters and other forms of public entertainment as part of Crown Prince Mohammed bin Salman's efforts to overhaul the economy and bring Western-style entertainment to the once-cloistered and ultra-conservative kingdom.
AMC marked its arrival by hosting a viewing of “Black Panther” in April 2018 that attracted a large crowd of men and women, a scene that would have been unimaginable just a few years earlier.
But in the years since it has faced stiff competition, including from homegrown operator muvi Cinemas and Vox Cinemas, part of the Dubai-based Majid Al Futtaim Entertainment conglomerate.
AMC will sell its $30 million investment to Saudi Entertainment Ventures, known as SEVEN, which is operated by the government's Public Investment Fund, AMC said in a press release.
The Leawood, Kansas-based company will continue to license the AMC name for the 13 theaters it opened around the kingdom and for future locations. It had initially planned to open up to 40 cinemas by 2023.
"During the last five years we’ve opened 13 beautiful theatres, hired and trained so many Saudi nationals, endured a global pandemic, and, perhaps most importantly, helped bring movies to the Saudi people," AMC Chairman and CEO Adam Aron was quoted as saying.
“In making this transition, we have enormous confidence in the team running these theatres and the venture is moving to the next stage exactly as we envisioned at the time we started.”
AMC, which operates some 950 theaters and 10,500 screens around the world, was hit hard by the COVID pandemic and the various lockdowns.
The crown prince, with the support of his father, King Salman, has moved to open the kingdom to foreign investors and tourists, hoping to build up the private sector and reduce the country's reliance on its vast oil reserves. Recent years have brought concerts, raves and major sporting events to the kingdom, where more than half the local population is under the age of 25.
Those plans have proceeded despite the global outcry over the 2018 killing of Saudi dissident and Washington Post columnist Jamal Khashoggi, which U.S. intelligence concluded was likely ordered by the crown prince. Saudi authorities say the agents who killed Khashoggi acted on their own and have been tried and sentenced to lengthy prison terms.
