A bid by a Hollywood power player to return a $400 million investment to the Saudi Abrabian government after an outcry over the murder of Saudi journalist Jamal Khashoggi has been fulfilled, a person with knowledge of the talks told The Washington Post. The person spoke on the condition of anonymity because of the matter’s sensitivity.
Endeavor, the Hollywood talent agency and content company, had accepted the money last spring from Saudi Arabia’s Public Investment Fund after, Ari Emanuel, the company’s co-chief executive, became enamored with the idea that Saudi Crown Prince Mohammed bin Salman was on the path to reform. The capital was quickly spent as Endeavor looked to pay down debt on a host of corporate acquisitions, which in recent years have included mixed martial arts and professional bull riding leagues.
But Emanuel had a change of heart after the murder of The Washington Post contributor at the Saudi Consulate in Istanbul in October. Emanuel spoke of his displeasure at the reports during a television conference in France — calling Khashoggi’s killing “very, very concerning” — and it appeared he was looking for ways to return the money.
Sources in Hollywood subsequently said Endeavor was raising capital from other sources so it could pay back the $400 million. As months wore on with no news, some in the entertainment world speculated that Endeavor was quietly hoping the controversy would pass. But the negotiation was completed several weeks ago, according to the person who spoke to The Post.
Representatives from both the Saudi Public Investment Fund and Endeavor did not comment.
Khashoggi was killed and dismembered after entering the consulate in Istanbul on Oct. 2. The Senate passed a resolution pointing a finger at Prince Mohammed, and the CIA and U.N. human-rights specialists believe Khashoggi was the victim of a state-sponsored murder,
"Evidence collected during my mission to Turkey shows prime facie case that Mr. Khashoggi was the victim of a brutal and premeditated killing, planned and perpetrated by officials of the State of Saudi Arabia,” U.N. human-rights expert Agnes Callamard said last month after a fact-finding mission to Turkey.
The kingdom has disputed the claims as “unsubstantiated” and in December lashed out at the Senate for interfering in its affairs. President Trump has flouted an obligation to report on the murder to the Senate, prompting outrage from Republicans and Democrats.
Details of the financial transaction by Endeavor were not available, but experts said the company likely paid a large premium to extricate itself from the agreement.
“Unwinding a deal like this is a lot easier said than done,” Jonathan Bender, a partner at the law firm Wilk Auslander, told The Post when reports of the pullout became public. Generally speaking, he said, investors have rights that make a return of capital difficult.
Some Western firms, such as Richard Branson’s Virgin Atlantic, declined future investments from the Saudi fund in the wake of the Khashoggi murder. But none of the other major American entities that had already accepted funds, including several Silicon Valley and Wall Street giants, is known to have returned them. Ride-hailing company Uber accepted a $3.5 billion investment in 2016 to buttress itself against competitors like Lyft.
Endeavor is in a slightly easier position to give back the money. It received a smaller amount than some of the other entities and, as a private company, is also able to change spending and investment strategy without fear of blowback from Wall Street.
The Endeavor investment came about as part of a whirlwind tour by Mohammed through Hollywood nearly a year ago, in which he met with an array of media and entertainment players. They included well-known liberals such as Brian Grazer and conservatives such as Rupert Murdoch, both of whom hosted star-studded events for the crown prince.
Mohammed had positioned himself as a reformer, easing the country’s infamous restrictions on women driving and allowing the first public movie theater to open. He also sought to invest the country’s oil profits in a range of global entities in a bid to reduce the country’s dependence on its core asset.
The news about Endeavor is unlikely to quell criticism of the funding of Hollywood companies, which have a history of entering financing arrangements with countries with checkered human rights records. In recent years, a range of studios and production firms have received billions from China even as the country faces numerous protests over reported human rights abuses.
As Endeavor was returning the money, data on casualties in the Saudi-led war in Yemen was emerging. A new report found that airstrikes from the Saudi- and UAE-led coalition, led by the Saudis and the United Arab Emirates and supported by the United States, had killed 203 people and injured at least 749 more in the four-year-old conflict, often with American- and British-made weapons.
On Thursday, the European Union chastised Saudi Arabia at the U.N. Human Rights Council, with all 28 member states of the continental bloc calling on Riyadh to cooperate with a U.N. inquiry into Khashoggi’s death and to release nearly a dozen imprisoned activists.