Rotana Media, the broadcast and music group owned by Saudi billionaire Prince Alwaleed bin Talal, is selling a $70 million stake to News Corp. Rotana said that News Corp had agreed to buy a 9.09 per cent stake with an option to take this up to 18.18 per cent. The deal creates a cross shareholding with one of the biggest stakeholders in News Corp.

The move will mark News Corp's most significant investment so far in the Middle East. “This is a qualitative leap not just for Rotana but for the whole Arab world,” Alwaleed told a press conference. “We are set to gain deep experience from News Corp … on television, movie production and technology,” he said. “They own MySpace … We can learn from this, the new media field.”

The acquisition will also ties Murdoch closer to one of their most important shareholders. Alwaleed's Kingdom Holdings owns 7 per cent of News Corp's class B stock and is the largest shareholder outside the Murdoch family. Alwaleed is not on News Corp's board of directors, but last month anointed James Murdoch as his father's eventual successor. “If he [Rupert Murdoch] doesn't appoint him, I'll be the first one to nominate him to be the successor.”

Rotana owns a variety of media assets from an online music video on demand site modelled on Hulu, to a large library of music from the region. It already shows programming from News Corp's Fox channels in Saudi Arabia through its free-to-air television network.

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