ESPN, Star Sports on thin ice in China

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BEIJING -- ESPN and Star Sports may be booted from Chinese TV in March after executives skipped a key licensing meeting with state regulators this past fall, an official at their host pay TV package operator said Wednesday.

Known as ESS, the Singapore-based joint venture between Disney and News Corp. was still carrying English Premier League soccer and other world sports events to TVs in upper-tier hotels and residence compounds this week -- as it has been since the 1990s. But now, analysts say both channels in the joint venture risk being taken out of the game just as China's sports-related TV advertising market warms up ahead of the 2008 Beijing Olympics.

"Their license needs annual renewal at the end of the year and ESS failed to get it done in the right period, when they were asked to," an official at China International Television Corp. said when referring to an invitation from the State Administration of Radio Film and Television that ESS turned down last year. CITVC is a unit of state flagship broadcaster China Central Television.

The imported channels that did have their annual landing rights licenses renewed by SARFT for 2007 include CNN, HBO, CNBC and Bloomberg, among others; but the 31-channel list recently posted to the SARFT Web site does not include ESPN or Star Sports.

Executives from Disney and News Corp. declined comment. Public relations officers from Disney in Hong Kong and from ESS at its headquarters in Singapore issued identical statements.

"ESPN Star Sports is still in the renewal process of its landing rights and is actively working to conclude the arrangements," the companies said. Added a Disney spokeswoman in Hong Kong: "We are not off the air."

This would not be the first time News Corp. and Disney have clashed with SARFT, a huge bureaucracy that answers ultimately to communist party propaganda chiefs.

Last year, CEO Rupert Murdoch got News Corp. in trouble for dealing with a Chinese provincial satellite television station without Beijing's approval. In 2005, Disney CEO Robert Iger was rebuffed by Beijing when he tried using the idea of building a Disneyland in Shanghai as incentive for SARFT to grant landing rights in China to the Disney Channel.

Meanwhile, a Beijing-based media analyst's editorial distributed to select industry subscribers last week summed up what both Western media giants could face as the result of their ESS joint venture's gaffe with SARFT.

"Since the channels are not included on the official list, it has to be 50/50 as to whether SARFT will make ESPN/Star Sports wait a full year to rejoin and that would be a painful experience with the Olympics coming up," China Media Monitor Intelligence said in its monthly newsletter.

"Apart from handing SARFT an easy way to make a point about who is in charge, ESPN's cloud also has a silver lining for one other player. It is smiling faces over at Eurosport, set to become the only foreign sports channel in China," CMMi said referring to the French sports channel.

Janine Stein in Singapore contributed to this report.
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