Film effects company DDMG plans Abu Dhabi studio

The American special effects company that brought the "Transformers" movies to life and recently wowed concertgoers with a performing hologram of late rapper Tupac Shakur is setting up a studio in oil-rich Abu Dhabi.

The deal signed Monday between Digital Domain Media Group and Abu Dhabi's government-backed twofour54 deepens the Emirati capital's ties to Hollywood as it accelerates its efforts to become a media hub.

Port St. Lucie, Fla.-based Digital Domain plans to establish an animation, visual effects and motion-capture studio and a media school in Abu Dhabi as part of the deal. The wealthy emirate is providing $100 million in grants for the project.

Although several movies have been filmed in the Middle East — including last year's "Mission: Impossible — Ghost Protocol," set partly in Dubai — it is the first time an international studio is laying down such deep roots in the region, said Wayne Borg, twofour54's deputy CEO and chief operating officer.

"I think it's a real game changer for the region in terms of giving us a seat at the table," he said by phone from the Cannes Film Festival, where the deal was signed. "Historically we've never had the access and exposure to a company like that in the region."

Digital Domain expects to begin hiring immediately and start work at the studio by early next year. The aim is to produce animated feature films, visual effects and other content both for the region and for international productions.

Over time, it plans to employ about 500 people in Abu Dhabi. A 150,000 square foot (14,000 square meter) production center is slated to open in twofour54's main media campus by the end of 2015.

Borg doubts Abu Dhabi's conservative Islamic culture will influence Digital Domain's work in the region, saying the U.S. company will be producing "mainstream content ... for the international market."

Neither company disclosed how much Digital Domain is kicking in. But Digital Domain Chairman and CEO John Textor said in an interview his company would make "a material capital expenditure" to the project.

"Travelling around the world and collecting grants is not a business model," he said. "We're not going to Abu Dhabi just to say we've got our toe in the water," he added, saying the planned Gulf center could end up employing roughly as many people as its Florida headquarters.

Digital Domain has worked on more than 90 films, including "Titanic," ''TRON: Legacy," and "The Curious Case of Benjamin Button," where it digitally added decades to Brad Pitt's character. Filmmaker James Cameron helped found the company in 1993.

It recently made waves for producing an eerily lifelike hologram of late rapper Tupac Shakur that appeared to perform alongside Snoop Dogg at the Coachella Valley Music and Arts Festival in California.

It has studios in Los Angeles, San Francisco, Florida, Vancouver, Mumbai and London, and is setting up operations in Beijing.

Among its shareholders is Flag Holding, a little-known investment company in Abu Dhabi. Flag's managing partner, Ahmed Ali al-Sarkal, said the private equity house is about two years old and consists of a small group of unnamed fellow investors.

Abu Dhabi controls the bulk of the oil in the seven-member United Arab Emirates, OPEC's third-largest producer. It is investing hundreds of millions of dollars to carve out a niche in the global media industry.

It set up a company in 2008 to partially bankroll Hollywood films, and has wooed major media brands such as CNN, the Financial Times and Cartoon Network to set up operations in the emirate. Sky News Arabia, a new pan-Arab news channel, began broadcasting from Abu Dhabi last month.

The sheikdom now wants to entice more filmmakers on the ground. It is launching a new program this week to offer producers a rebate of up to 30 percent of what they spend on making movies, television shows, commercials and music videos in the emirate.