Shanghai Media Group, Softbank ink deal
China's No. 2 b'caster teams with Japanese Internet companyBEIJING --The Shanghai Media Group, China's No. 2 broadcaster, and Japanese Internet company Softbank Group signed a strategic partnership on Monday, SMG sources told The Hollywood Reporter.
SMG president Li Ruigang and Softbank founder Masayoshi Son, Japan's fifth-richest man, signed the framework agreement in Shanghai Monday evening, marking the start of their cooperation, two SMG officials said, declining to be named.
No specific deals were inked, one SMG source said.
SMG, which is controlled by the government of Shanghai, China's largest city and financial hub, is restructuring to reduce its reliance on advertising revenue as China's media monitors in Beijing gradually experiment with an opening up of the sector.
Li said last month that SMG was seeking funding from private equity investors in several of its businesses, rebranding its youth-related content and planned to take them public over the coming two years (HR 26/5).
Softbank, which owns Japan's No. 3 wireless carrier Softbank Corp. and venture capital businesses, is seeking investment opportunities in China's fast-growing digital media industry.
A source at a Softbank unit confirmed the presence in Shanghai on Monday of senior Softbank executives from Tokyo but declined knowledge of the agreement with SMG.
SMG, whose 2008 revenues of 6 billion yuan ($878 million) came mainly from advertising, is expanding beyond traditional broadcasting into digital media and content publishing.
SMG's ambitious plans could put it up against state-run China Central Television, the country's flagship broadcaster.
Softbank has invested in Tao Bao, China's largest auction site operator and a unit of Alibaba Group, and has established a joint research center with China Mobile to develop mobile Internet services.
Softbank's founder Son has an estimated net worth of $3.9 billion and was ranked by Forbes magazine as Japan's fifth-richest person this year.
Reuters contributed to this report.