Hanover aims to gain from Bell Pottinger’s scandalous demise
Hanover aims to gain from Bell Pottinger’s scandalous demise
“It was serendipitous,” said Jonty Summers, managing director of the Middle East business of the London-based consultancy Hanover Communications, which took over Bell Pottinger’s regional arm last year.
The owners, shareholders and staff at Bell Pottinger would not use the same word to describe the collapse of the firm after a scandal in South Africa that involved allegations of racism, kleptocracy and social media manipulation.
The British PR firm was put up for sale after its client in the country, the Gupta family, were exposed as perpetrators of “state capture” — taking over the money-making institutions of South Africa in collusion with a corrupt government. It was the biggest scandal to hit the PR world for many years.
Hanover — which was started in 1998 by Charles Lewington, a former British government media adviser — saw an opportunity in the Middle East, where Bell Pottinger was one of the established names with a presence going back decades with some big clients, especially government-related corporates.
“The original plan was to grow the business for Hanover here just through hard work, but when Bell Pottinger came along it made sense,” Summers explained.
Summers is not concerned that any of the dirt from the Gupta scandal has stuck to Bell Pottinger in the region, nor that there will be any legacy at the merged entity. “Our London management does not suffer from the same traits that Bell Pottinger’s used to. We are decent people who believe in treating others in the way we would like to be treated,” he said.
“The critical difference between the two companies is our respective approach to ethics. The Bell Pottinger Middle East team was a separately run business, with a good client list, let down by poor leadership that did not operate to the same rigorous standards as Hanover. We have conducted extensive due diligence on their clients and are absolutely committed to operating the combined business to the highest ethical standards. We have a robust ethics and conflict policy,” he added.
The acquisition of Bell Pottinger’s Middle East arm gives Hanover an immediate quantum leap in size, adding 17 executives to its payroll for a total strength of 20 — half of them Arabs or Arabic-speaking — with Archie Berens, the former Bell Pottinger boss in the region, chairman of the new business.
It also adds big clients like Aldar, S&P and Senaat to the list of corporates it services in the region. “None of the Bell Pottinger clients in the region left because of the Gupta scandal,” said Summers.
The strategy is to focus on high-end corporate communications advice, with a particular emphasis on those sectors where Hanover already has expertise — health care, financial services, technology and sports — via its global business based in London, Brussels and Dublin.
There, it already services clients like Facebook, Apple and Goldman Sachs, all of which have a big presence in the UAE. One aspiration is that some of that global business might be persuaded to go with Hanover in the Middle East as well; another is to add to the select list of “crisis communication” clients it already has in the region.
Does all this add up to a sound commercial strategy in a highly competitive market? The Middle East has seen an influx of international communications firms over the past decade, especially in the UAE. The opening up of Saudi Arabia under the Vision 2030 strategy has added to this competition, with many firms using the Emirates as a base for operations in the Kingdom.
“It’s no more competitive than London or New York. People will always want advice from good consultants, especially on the top-end strategic side. There aren’t as many good ones as you’d think in that space,” said Summers.
“Our growth has been funded by the profit we make from client work. We have no debt. The big networks are reporting a slowdown but our growth is bucking this trend,” he added.
Summers sees Saudi Arabia as a part of the Hanover strategy in the region, though admitted there are no immediate plans to open an office in the Kingdom nor fly “armies of PR men into Riyadh every Sunday morning,” as he put it.
The London-based Lewington was involved in the 1990s at the tail end of the big privatization drive set in train by former Prime Minister Margaret Thatcher and continued by her successor, John Major, whom Lewington served, and was regarded as a specialist in privatization messaging, especially on the consumer benefits of state sell-offs.
“In Saudi Arabia, it’s likely that demand will rise for strategic corporate communications consultants with an understanding of the culture of the region who can help Saudi companies put plans in place to navigate some of the complexities of privatization,” said Summers.
Vox Cinemas brings popcorn and superheroes to 80 screens across Saudi Arabia
- Majid Al Futtaim (MAF), the Dubai-based operator of malls and leisure facilities, is preparing a big roll-out of new cinema screens in the Kingdom
- Cameron Mitchell, the chief executive of MAF Cinemas, revealed the plans in an interview with Arab News
DUBAI: Majid Al Futtaim (MAF), the Dubai-based operator of malls and leisure facilities, is preparing a big roll-out of new cinema screens in the Kingdom.
Following the first film viewing for nearly four decades in April and the opening of four Vox screens in Riyadh Park Mall, MAF is on the verge of a more ambitious initiative to create 80 screens in the Kingdom by the first quarter of next year.
Cameron Mitchell, the chief executive of MAF Cinemas, revealed the plans in an interview with Arab News.
“By the spring of 2019 we will have invested $100 million in cinema in Saudi Arabia, and by the end of next year we expect to have 200 screens. It is one of the fastest programs of openings anywhere in the world. There’s a lot happening very quickly,” he said.
The latest initiative is part of MAF’s $550 million strategy for cinemas in the Kingdom, and will see screens in Riyadh, Jeddah, in the Eastern Province and eventually many other smaller cities. Mitchell, who has been working in cinema in the region for the past 12 years, said the Saudi Arabian market is potentially huge.
“Saudi Arabia has such a young population and a big demand for entertainment, so the potential is enormous. For example, in Australia the average per capita number of cinema visits is five times a year. Even if every Saudi visits a cinema just once a year, that’s 30 million new visits per year,” he said.
MAF is planning to open 600 screens in Saudi Arabia by 2030, but Mitchell said that could be a “conservative” target. Cinemas in the Kingdom will eventually account for 50 percent of MAF’s regional cinema business, he estimated.
Mitchell said that MAF’s experience so far in Saudi Arabia had been very good. “We think we know what will appeal to Saudi audiences. Black Panther was the first, and the reception was fantastic. Movies such as the Avenger series, Ferdinand, Jurassic Park, X-Men all play well there.The big blockbusters go down really well, but there will also be Arabic films, and Hindi films at other times. Jurassic Park was a real hit — it was the first time some Saudis had ever seen a 3D dinosaur on a big screen,” he added.
The four screens in Riyadh are divided into “family” and “bachelor” venues, and films are chosen to be suitable for the particular audience. “Aside from the segregation of bachelors and families, it’s no different from Dubai. Perhaps over time, that segregation will change too,” Mitchell said.
The reintroduction of cinema has gone very smoothly, he said. “There have been no real challenges regarding content. We’ve been working closely with the censors, but there have been no problems so far.
“We’ve learned a lot from how the UAE censors films, and advances in technology allow us to do it in a more subtle way, for instance zooming in on one subject in a controversial scene. We can avoid (bits) ... rather than cutting the whole scene.
“Areas to avoid are pretty obvious — religion and nudity, and we don’t really show films that have that kind of content anyway. It is mainly action films and family films. We will have lots of screens, so we can match whatever the demand is and the law allows,” he said.
MAF wants to make cinema one of the main forms of entertainment in the Kingdom as it goes through Vision 2030 transformation plans aimed at diversifying the economy and allowing a more liberal lifestyle.
“It is not just about a movie. We want it to be the favorite form of all-round entertainment, and so far it has been a great success. We’ve been selling tickets a couple of days in advance. There have been multiple sold-out sessions, and we’ve had a lot of positive feedback on the popcorn and the nachos,” he said.
One of the biggest cinema hubs will be in the Mall of Saudi, which MAF is planning in the Saudi capital, complete with an indoor ski slope.
“Our cinemas win awards for being among the best in the world, quite an achievement for a Middle East company. The Mall of Saudi will be an entertainment hub, equipped for gaming as well,” Mitchell said. Other new screens will be located in existing malls but there will also be some standalone venues.
“We’re spending a lot of money to develop cinemas quickly, so returns will be consistent with what we normally get from cinemas,” he said.
Mitchell said MAF was open to discussions with existing developers, and would be interested in projects in places such as King Abdullah Economic City and Qiddiya, the huge leisure complex planned outside Riyadh.
“We like to see ourselves as the local developer. Of course, there is competition, but we always build the best in the region, and we run the best malls in the region too. We don’t do cheap, we do best in class and we won’t cut corners,” he said.
MAF plans to employ 3,000 mostly Saudi staff in its cinema business, and wants to recruit a Saudi to run the distribution business in which it partners with 20th Century Fox.
The boost to KSA cinema entertainment is also expected to have a big effect on film-making in the region, Mitchell said.
“We’re looking for some big Saudi film premieres in the autumn. I was at the Cannes Film Festival recently, marketing the product and looking at how we can support the film industry in Saudi Arabia.
“Regionally, there is not a lot of locally made content, but we expect a lot more in years to come. We want local content and we see lots of Saudi films in coming years. We will work with the government to help that along. Cinema in Saudi Arabia is a government-backed and endorsed initiative as part of 2030,” he said.