Fox sell­ing its huge stake in Star China me­dia group

China Daily (Canada) - - ACROSSAMERICA - By AMY HE in New York amyhe@chi­nadai­lyusa.com

US me­dia gi­ant 21st Cen­tury Fox is sell­ing its en­tire stake in Star China TV to pri­vate eq­uity fund China Me­dia Cap­i­tal, the com­pa­nies an­nounced on Thurs­day.

Shang­hai- based China Me­dia Cap­i­tal (CMC) and Star China’s man­age­ment team will be ac­quir­ing a 47 per­cent stake of Star China from 21st Cen­tury Fox, the me­dia cor­po­ra­tion formed when the Ru­pert Mur­doch’s News Corp split into two com­pa­nies in 2012. The stake is es­ti­mated to be val­ued at roughly $150 mil­lion, ac­cord­ing to the Lon­don Tele­graph.

CMC had been the ma­jor­ity owner of Star China since 2010 and the joint ven­ture op­er­ates three 24-hour Man­darin chan­nels — Xing Kong, Xing Kong In­ter­na­tional, Chan­nel [V] Main­land China — and the For­tune Star Chi­nese movie li­brary, ac­cord­ing to a state­ment.

“Over the past three years, the com­pany has achieved out­stand­ing per­for­mance thanks to the ded­i­cated ef­forts of its share­hold­ers and man­age­ment,” said Li Ruigang, chair­man of CMC, in a state­ment. “We are very grate­ful for the tremen­dous sup­port and un­der­stand­ing from Mr Ru­pert Mur­doch, Mr James Mur­doch and the 21CF team.”

James Mur­doch, deputy COO, chair­man, and CEO of 21st Cen­tury Fox’s in­ter­na­tional busi­nesses, and son of Ru­pert Mur­doch, said the deal is meant to sim­plify the com­pany. “To­day’s divest­ment un­der­scores our broader agenda of stream­lin­ing our af­fil­i­a­te­own­er­ship struc­tures,” he said.

The sell-off fol­lows 21st Cen­tury Fox’s sale of its re­main­ing stake in another Chi­nese broad­caster in Oc­to­ber last year. The cor­po­ra­tion’s sub­sidiary Star En­ter­tain­ment Hold­ings sold a 12.15 per­cent stake in Phoenix Satel­lite Tele­vi­sion to pri­vate eq­uity group TPG China for $213 mil­lion. It had sold a 5.3 per­cent stake ear­lier in March for $92 mil­lion.

21st Cen­tury Fox’s move away from the Chi­nese mar­ket runs con­trary to many other US me­dia cor­po­ra­tions’ strate­gies. Sohu Video an­nounced in De­cem­ber that it will stream Man­darin-dubbed and sub­ti­tled chil­dren’s pro­grams from Nick­elodeon, in­clud­ing Sponge­Bob Square Pants and Teenage Mu­tant Ninja Tur­tles.

Right be­fore Christ­mas, Sohu.com be­gan stream­ing episodes of sketch com­edy pro­gram Satur­day Night Live, with new episodes stream­ing online in China a week af­ter they air in the US, com­plete with Chi­nese sub­ti­tles that ex­plain joke ref­er­ences.

“We’ve seen a lot of ac­tiv­ity of get­ting into the mar­ket­place, as op­posed to step­ping away from it,” said Bren­dan Ah­ern, man­ag­ing di­rec­tor of as­set man­age­ment firm KraneShanes. “Know­ing the growth prospects for con­tent de­liv­ery in China, it must be more re­lated to

21st Cen­tury Fox’s fo­cus on their core busi­nesses and want­ing to ag­gre­gate re­sources to fo­cus on their pri­mary busi­nesses, rel­a­tive to the size of their busi­nesses.”

But Ah­ern said that he wouldn’t pre­clude fur­ther in­vest­ments from Fox down the road, “maybe on bet­ter terms that are more ad­van­ta­geous for Fox than they’ve en­tered into.”

Ru­pert Mur­doch set his sights on China in the 1990s when News Corp and en­tre­pre­neur Liu Changle started Phoenix, which op­er­ates sev­eral chan­nels, in­clud­ing Phoenix Chi­nese Chan­nel, Phoenix Hong Kong Chan­nel, and Phoenix Movies Chan­nel. Phoenix was New Corp’s ma­jor tele­vi­sion as­set in China and the sale of its re­main­ing stake in the com­pany marked to many the end of Mur­doch’s am­bi­tion in China.

Af­ter fail­ing to ac­quire land­ing rights that would have given a broader au­di­ence ac­cess to its chan­nels in China, the com­pany sold its con­trol­ling in­ter­est in Star China to CMC in 2010, re­tain­ing the group’s In­dian op­er­a­tions.

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