If you can’t beat ’em, join ’em.
Rupert Murdoch’s News Corp. has sold a controlling stake in its Star China TV business to state-backed media investment fund China Media Capital for an undisclosed sum.
The move is one way of getting around the difficulties of breaking into the Chinese market because of strict controls on the media.
But it now appears to have partially solved that problem.
James Murdoch, chairman and CEO of News Corp. in Europe and Asia, said, “The agreement recognizes the value we have created in Star China and enables us to continue to grow it for the future.”
The Star China TV group includes the Xing Kong and Xing Kong Intl. general entertainment channels, the Channel [V] music channel and the Fortune Star Chinese movie library, which has 757 Chinese-language titles.
Last year, News Corp. restructured its business to focus more on India amid long-term frustrations over the Chinese restrictions, which meant that its Star channels were only distribbed in the southern province of Guangdong.
Jack Gao, News Corp. VP and CEO of Star China, will continue as CEO of the joint venture, which will be based in Beijing with offices in Shanghai, Guangzhou, Chongqing and Hong Kong.
Star is the first acquisition by CMC, which was established in April 2009 with the backing of the National Development and Reform Commission, the government’s state planning organization.
The fund has total assets under management of $740 million and is part of China’s effort to boost its media profile by identifying investment opportunities domestically and abroad with the aim of providing backing through growth capital, corporate restructuring, management buyouts and strategic acquisitions.
“This partnership is an extension of our long-term cooperation with News Corp.,” CMC chairman Li Ruigang said in a statement. “The entry of the Chinese capital into international media market will help facilitate its changes and development.”