News Corp sells stakes in Chinese TV channels
August 10th, 2010 - 9:09 UTC
by Andy Sennitt.
Rupert Murdoch’s News Corp said it will sell a controlling stake in three Chinese TV channels to a fund backed by China’s number two broadcaster, marking a major retreat after years of difficulties. News Corp will sell a stake in Xing Kong, Xing Kong International and Channel [V] Mainland China, along with its Fortune Star Chinese movie library, to China Media Capital, the US media giant said on its website yesterday.
Rupert Murdoch, whose wife Wendi Deng is Chinese, has pulled back from China in recent years as Beijing tightened its stranglehold over the broadcast industry, thwarting the media mogul’s ambitions. “Due to the restrictions, foreign media companies cannot make much money in China,” said Yuan Fang, a professor at the Communication University of China, was quoted by the official China Daily as saying.
The terms of the agreement were not disclosed. The deal marks the first transaction for China Media Capital, a five billion yuan ($739 million) investment fund set up in 2009 to invest in the media industry. It is backed by state-owned Shanghai Media Group and China Development Bank
Under the deal, CMC and News Corp will set up a joint venture that will be headquartered in Beijing and have offices in Hong Kong, Shanghai, Guangzhou in the south and Chongqing in the southwest. Jack Gao, Vice President of News Corp and Chief Executive of Star China, will run the new company.
“The agreement with CMC recognises the value we have created in Star China and enables us to continue to grow it for the future,” said James Murdoch, Chairman and Chief Executive of News Corp Europe and Asia.
The transaction comes as China steps up efforts to expand its influence in the global media industry.
Beijing has earmarked 45 billion yuan to fund the expansion of groups including Xinhua, state television station CCTV and China Radio International, according to media reports - at a time when the industry is facing a major money crunch elsewhere.