Disposal completes Murdoch's broadcast retreat from China
It announced that subsidiary Star Entertainment Holdings had sold its 12.15% stake to TPG China Media, part of private equity group TPG. The shares were sold at HK$2.73 each, implying a gross transaction value of $213 million (HK$1.66 billion). In March, the former News Corp unit, sold a 5.3% stake for $92 million.
Phoenix was started in 1996 as a joint venture between News Corp. and entrepreneur Liu Changle, who still heads the Hong Kong stock market-listed company. It operates a bouquet of Mandarin-language channels, including Phoenix Chinese Channel, Phoenix Movie Channel and Phoenix InfoNews Channel.
The Phoenix disposal marks the apparent end of Rupert Murdoch and News Corp./21st Century Fox’s ambitions as a broadcaster in China. Three years ago News Corp. broke up its pan-Asian broadcast group STAR TV, retaining the Indian operations but selling off a controlling interest in its Chinese channels to China Media Capital, a Chinese state-owned equity group.
Like most western-owned channels, STAR failed to get the ‘landing rights’ that it sought in China that would have made it freely accessible to the mass mainland Chinese population. Instead it had to be satisfied with a position that made its channels available only in privileged locations, such as top tier apartments, hotels and foreigners’ residences.
While the disposal appears to be a setback in China – and it comes at a time when Murdoch and 21st Century Fox are pushing ahead in India through the recently announced sports deal with IMG-Reliance – a changing media landscape may cushion the blow. Widespread, high speed internet access and fast developing online video platforms make individual shows more important than linear TV channels.
In China, 21st Century Fox still retains a 19.9% stake in the NASDAQ-listed Chinese film producer and distributor Bona Film Group.