News Corp. sells Chinese-language channels to CMC
Xing Kong, Channel V China sold to fund run by SMG's LiHONG KONG – China’s first media-focused private equity fund China Media Capital has acquired a controlling stake in News Corporation’s Xing Kong, Xing Kong International, Channel V Mainland China and the company’s Fortune Star Chinese movie library, the companies announced on Monday.
No financial details were disclosed. The deal with News Corp. marks the first investment project of CMC, and will provide new growth opportunities in China for the international media conglomerate. The News Corp.-run general entertainment channel Xing Kong and music-based Channel [V] Mainland China are now broadcast in China, while the Fortune Star Chinese movie library owns and manages the rights to 757 Chinese-language titles, some of which are worldwide perpetual rights.
The channels never reached the potential News Corp. planned for them. They were never granted full landing rights for all of China, limiting their viewership to higher-end hotels that cater to foreign visitors, diplomatic residence complexes and other housing areas that access the signal without official government permission.
News Corp.’s other broadcast channels in China, Star Movies and National Geographic Channel, are not part of this deal. The company also owns Chinese WSJ.com and MySpace China, a 17.6% stake in the China-based Phoenix Satellite Television, which runs Phoenix Chinese Channel, Phoenix InfoNews and Phoenix Movies Channel, as well as Mandarin-language sports channels ESPN and Star Sports through its 50% owned ESPN Star Sports joint venture.
The joint venture will be headed by Jack Gao, present VP of News Corp. and CEO of Star China, as CEO. Headquarters of the new company will be in Beijing, with offices in Shanghai, Guangzhou, Chongqing and Hong Kong.
“This partnership is an extension of our long-term cooperation with News Corp. The entry of Chinese capital into international media market will help facilitate its changes and development. Today’s agreement represents a first step into that direction. CMC will continue our efforts in developing operational and investment platforms for international media,” said CMC chairman Li.
Established in April 2009, CMC was backed by the Chinese National Development and Reform Commission and chaired by Li Ruigang, president of Shanghai Media Group. It has assets of 5 billion yuan ($739 million) to strategically invest in culture and media businesses both in China and overseas, providing equity in growth capital, corporate restructuring, management buyouts and strategic acquisitions.
In June, CMC raised $294 million from five state-owned investors, including China Development Bank and affiliates of SMG.
-- Steven Schwankert in Beijing contributed to this report.