Fox selling its huge stake in Star China media group
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.