Jun 27, 2024 8 min read

SXSW ditches weapons sponsors to burnish brand - so why won’t it ditch its ties to Saudi Arabia?

SXSW has ditched its relationships with the US Army and a bunch of weapons manufacturers, which has been positively received across the industry. But if those sponsors are a problem, what about SXSW’s ties to the Saudi Arabian government via its majority owner Penske Media Corporation?

SXSW ditches weapons sponsors to burnish brand - so why won’t it ditch its ties to Saudi Arabia?

SXSW Austin has announced that it is ditching the US Army as a sponsor and won’t be taking sponsorship cash from weapons manufacturers. Or, at least, it won’t be doing that in 2025. So, that’s generally good news. 

What’s not such good news is that - as recently highlighted by CMU - the SXSW brand has deep connections to equally unsavoury money elsewhere. 

In 2018, $200 million dollars was pumped into its majority owner, Penske Media Corporation, by SRMG. That’s the ‘Saudi soft power’ organisation that is widely identified as part of Saudi Arabia’s ‘culture washing’ agenda, designed to improve the kingdom’s reputation in the West, and distract from its wide ranging abuses of human rights, including a proxy war in Yemen, which has resulted in the deaths of nearly 400,000 innocent civilians.

In a newly published FAQ on the SXSW website, the company says, “After careful consideration, we are revising our sponsorship model. As a result, the US Army, and companies who engage in weapons manufacturing, will not be sponsors of SXSW 2025”.

This year’s SXSW saw significant backlash from artists and speakers after the festival and conference jumped into bed with ‘super-sponsor’ the US Army, as well as having  relationships with a number of weapons companies, including BAE Systems and Collins Aerospace, a subsidiary of weapons conglomerate RTX Corporation.

More than 100 artists pulled out of music showcases at the event, citing the presence of the US Army and weapons companies as unacceptable, and in particular the relationships the weapons companies had with Israel, in light of the humanitarian crisis in Gaza, precipitated by Israel’s war with Hamas. 

Amongst the artists joining the boycott were Northern Irish rappers Kneecap who said that they were cancelling their planned appearance at SXSW “to highlight the unacceptable deep links the festival has to weapons companies and the US military who at this very moment are enabling a genocide and famine against a trapped population”.

They went on to say, “We cannot in good conscience attend an arts festival that has ‘The US Army’ as a ‘super-sponsor’ and is platforming RTX (formerly Raytheon), Collins Aerospace, and BAE Systems, the very companies selling the weapons that have murdered 31,000 Palestinians, over 21,000 of them women and children”.

At the time, SXSW justified buddying up with weapons companies by arguing that “the defence industry has historically been a proving ground for many of the systems we rely on today” and that they are “often leaders in emerging technologies”.

Saying that it was SXSW’s belief that “it’s better to understand how their approach will impact our lives”, it said that taking the Army’s money was “part of our commitment to bring forward ideas that shape our world”. Meanwhile, Collins Aerospace’s sponsorship of two SXSW Pitch categories gave “entrepreneurs visibility and funding for potentially game-changing work”.

Those opportunities for “game-changing work” are highlighted by the websites of BAE Systems and Collins Aerospace.

BAE Systems boasts of a “wide range of munitions, explosives, gun systems and artillery systems” on its website, including its 81mm mortar ammunition - which BAE cheerfully describes as “highly accurate, giving enhanced fragmentation” - and its APKWS laser guidance kit which it describes as “delivering critical lethality when it matters most”.  

Collins’ “core capabilities” include “Connected Battlespace” products that enable “seamless data sharing and autonomous, intelligent connectivity that reduces decision-making timelines to machine speeds”, which sounds like a tech bro way of saying “our technology helps you kill more people faster, without having to think about it too much”.

As highlighted by Kneecap’s statement when they pulled out of SXSW, a key part of artists’ outrage with SXSW’s sponsors was that they were enabling a humanitarian crisis in Gaza, as Israel uses weapons manufactured by these companies in its current war with Hamas - in which tens of thousands of innocent civilians have been killed.

Addressing the artist boycott, SXSW said at the time, “We fully respect the decision these artists made to exercise their right to free speech. Across the globe, we are witnessing unspeakable tragedies, the rise of repressive regimes, and the increasing spread of violent conflict”.

The rise of repressive regimes is definitely problematic, and is an issue that is painfully close to home for SXSW. One of the most effective artists of repression and promulgators of violent conflict is the Saudi Arabian regime, which comes close to the bottom of the various indices that track human rights and freedom around the world.

SXSW’s majority owner, Penske Media Corporation, has received hundreds of millions of dollars from the Saudi Research and Media Group, or SRMG, a Saudi state-backed media company.

SRMG is widely acknowledged to have close ties to the Saudi Royal family and in particular Mohammad Bin Salman - often referred to as ‘MBS’ - the country’s crown prince, prime minister, and now de-facto leader. PMC also owns a stable of entertainment publications, including Billboard and a 50% stake in the UK’s Music Business Worldwide. 

After he consolidated power in the Saudi Kingdom, Bin Salman began a programme of “economic diversification, global engagement, and enhanced quality of life” known as Vision 2030, designed to transition Saudi Arabia beyond its oil-based economy. Vision 2030 was  also seen by many as a way to present MBS “as a reformer and moderniser”.

According to the organisation Human Rights Watch, Saudi Arabia’s Vision 2030 plan “explicitly lays out” the kingdom’s strategies with commitments to “enhancing the role of government funds… creating partnerships with international entertainment corporations”. 

HRW also said that the Saudi government had spent “billions of dollars hosting major entertainment, cultural, and sporting events as a deliberate strategy to deflect from the country’s image as a pervasive human rights violator”. 

As an example of that activity, in 2021, prominent dance music publication Resident Advisor ran an opinion piece written by Joe Siltanen with the headline “MDLBeast Festival is ‘culture-washing’ Saudi Arabia’s authoritarian regime”. 

A Guardian investigation in 2018 showed that the Saudi state had spent millions on burnishing its reputation, in an attempt to detract from its terrible human rights record, and in particular its involvement in the Yemeni war. 

The UN estimated that, by late 2021, the war in Yemen had resulted in the deaths of 377,000 people, with the UK’s Centre Against the Arms Trade blaming the humanitarian catastrophe on “the strategies and tactics adopted by parties other than the conflict, especially the Saudi-led coalition”, which “targeted hospitals, clinics and vaccination centres”.

As part of its investigation, The Guardian highlighted that Freud Communications, the London PR agency, which is now the PR firm representing SXSW’s London edition, had “provided PR support for the kingdom’s Vision 2030 relaunch under Bin Salman during 2016”.

This PR drive was significantly derailed by the murder and dismemberment of journalist and prominent Saudi critic Jamal Khashoggi in 2018. That murder was later confirmed by the CIA to have been directly ordered by MBS - something the crown prince still denies.

It was just months before Khashoggi’s murder that Penske inked its deal with SRMG, in February 2018.

In the wake of Khashoggi being murdered and dismembered, other companies who had received substantial investment from Saudi sources handed back the money. This included Endeavor, the parent company of super-agents WME, which returned $400 million that it received from Saudi Arabia’s Public Investment Fund

Penske, however, did not hand back its investment from SRMG. 

In April 2020 the Public Investment Fund purchased a 5.7% stake in Live Nation, the US-based publicly listed live giant. Live Nation also recently apparently decided that a key sponsor was attracting more negative publicity than its money was worth, dropping Barclays after significant pressure from artists in the UK.

More recently, former CEO of UK indie label trade body AIM Paul Pacifico, who had championed diversity and equality during his tenure at AIM, hopped the fence to become CEO of the Saudi Music Commission - working directly for former SRMG chair and now Saudi Minister of Culture, Prince Bader bin Abdullah Al Saud. In 2017 Bader was identified by US intelligence as having acted as an intermediary for MBS to purchase Leonardo da Vinci’s Salvator Mundi, paying $450 million dollars for the painting.

According to specialist publication Intelligence Online, Faisal Bin Salman - a brother of MBS - was, in 2015, “thought to still have partial control of Saudi Arabia’s biggest media group SRMG”. In 2023, according to the FT, SRMG “contacted media consultancies to study the feasibility and scope” of launching an international English-language news channel to “expand its global media influence” with funding “likely to be ‘off the scale’”.

The Guardian investigation also revealed that “sources at Vice said the company had a team working on material to promote Saudi Arabia in conjunction with Saudi publishing group SRMG, which has close ties to the Saudi ministry of information”.

SXSW’s ties to Saudi money appear to run deep. As CMU recently reported, SXSW London has been licensed from SXSW by Ali Munir - a director of SXSW parent Penske Media Corporation - via an opaque network of offshore companies, including Jersey-based entity The Panarae Partnership.

Munir keeps an incredibly low profile, with very little biographical information available about him. However, CMU has been able to obtain documents showing that he paid £8 million for a London mansion in 2018 - which has apparently sat empty for the past few years while a major refurbishment is carried out. 

In addition, we obtained documents and photographs that confirmed that he is the son-in-law of prominent Tunisian-born financier Kamel Lazaar, whose fortune comes from Swicorp, “one of the first investment banks in Saudi Arabia”.

Privately educated in the US, Munir was Terra Firma’s ‘man in the Middle East’ operating out of the UAE. In 2010, in an article about the “bright prospects for the private equity industry in Saudi Arabia”, Munir talked enthusiastically about the opportunities to raise cash for private equity investments, saying that he believes “family groups will be in a good position to be PE market players because they have the capital, banking relationship and are well-entrenched in the business”.

Across a number of recent conversations a Freud Communications spokesperson representing SXSW repeatedly and strenuously denied to CMU that there was any Saudi money involved in Panarae - or in SXSW London - but when asked for proof that this was the case was unable to provide any evidence other than vague assurances. 

The same spokesperson also strenuously objected to Freuds being referred to as a Saudi-associated PR company “because it was work that took place eight years ago”. However, when asked whether they could confirm that Freuds had not carried out any work for Saudi-state associated entities since then, they admitted that they did not actually know.

By the time this article was published, that spokesperson had still not been able to confirm whether Freuds worked, or had worked for, Saudi state entities since the work on Vision 2030.

Freuds was also unable to provide a direct contact at Panarae to provide proof that its funding did not include money from Saudi Arabia.

To recap that: SXSW London is run through an offshore company run by Ali Munir, the son-in-law of the owner of a prominent Saudi investment bank. It’s impossible to determine the true backers of that offshore company, or its sources of funding, because it is domiciled in a jurisdiction that is notoriously opaque. 

Its founder Ali Munir has talked about the opportunities to raise private equity funding in Saudi Arabia, and the Saudi-associated PR firm working for SXSW London denies that there is any Saudi money involved in SXSW London, but can’t provide any proof. 

SXSW itself is owned by Penske Media Corporation, which has taken hundreds of millions of dollars from Saudi’s SRMG, which is closely linked to the Saudi royal family and MBS, who has waged a proxy war in Yemen on behalf of the Saudi state, precipitating one of the worst humanitarian disasters the world has seen.

It’s obviously far harder for SXSW to cut its close ties with Saudi Arabia than it is for it to drop a couple of sponsors, when they own a chunk of its parent company. 

But as more scrutiny is turned on the commercial relationships that companies like SXSW and Live Nation have, it seems somewhat hypocritical for SXSW to trumpet its change of heart - which only happened in the face of significant negative publicity - whilst its parent company was provided with hundreds of millions of dollars of money from equally problematic sources. 

Ultimately, this seems to be a fairly cynical move by SXSW in response to widespread public criticism, and a case of “this money is bad, we’ll ditch it - but let’s not mention the other bad money we’ve got”. Let’s stop cheering on the arrival of SXSW in London, and instead ask SXSW London to be truly transparent about the way it is funded. 

UPDATE 27 Jun 2024, 7.30pm:

A spokesperson for Freud Communications clarified that Freuds has not worked for Saudi state entities since its work on Vision 2030 in a brief statement that said "I have now checked and can confirm that Freuds has not worked with Saudi Arabia since the project you cited eight years ago."

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