Rupert Murdoch’s News Corp said yesterday that it will sell control of its three Chinese TV channels to a fund backed by China’s second-largest media company, in a pullback from the market after years of difficulty.
The deal would see China Media Capital acquire a controlling stake in News Corp’s Xing Kong, Xing Kong International and Channel Mainland China channels, along with its Fortune Star Chinese movie library, News Corp said in a statement.
Established in 2009, China Media Capital is a private equity fund with 5bn yuan (£463m) in assets under management and a focus on investments in the media industry.
It is backed by Shanghai Media Group (SMG), the dominant player in Shanghai, as well as China Development Bank and China Broadband Capital.
The move could mark the beginning of a wind down for News Corp in China’s tightly controlled media market, which has proved highly frustrating to the company and its Western peers after numerous limitations and restrictions by Beijing.
The terms of the deal were not disclosed, but the three channels combined were generating no more than $50m (£31.4m) annually in revenue at the time of the deal, said Vivek Couto, a media analyst at Media Partners Asia.
“News Corp, after two decades in China, has done the inevitable in the
last few years,” Couto said. “They see the best option to grow in the market is to make
sure the business is in control of local hands.”
News Corp and global rivals like Time Warner and Viacom held out great hopes for China when they launched TV channels there starting in the late 1990s.
City A.M. Reporter