© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: June 8, 2006 6:54 pm
Rupert Murdoch’s News Corp is to sell a 20 per cent stake in Phoenix Satellite Television, its Hong Kong-based Chinese TV joint venture, to China Mobile, the state-controlled wireless operator, in an apparent shift in group strategy towards China.
The sale, worth $185m based on the most recent close of Phoenix’s shares, cuts News Corp’s stake to less than 18 per cent, making China Mobile its second biggest shareholder.
The deal marks a dramatic reduction in News Corp’s involvement in what has been its most successful foray into the fast-growing Chinese media market – and appears to highlight Mr Murdoch’s frustration at Beijing’s tight media controls.
Like most other foreign media companies, News Corp has found it difficult to make money in China due to tight controls. The Financial Times reported in February that News Corp had held discussions about a withdrawal from Phoenix and one person familiar with the situation yesterday said a total exit was possible “in the longer term”.
The person said the stake sale reflected in part an awareness that Phoenix’s relative success in China was not doing much to help the development of News Corp regional unit Star TV, which has struggled to establish a significant presence.
However, Michelle Guthrie, Star chief executive officer, said she looked forward to continued involvement in Phoenix.
“Today’s partnership represents an important new media growth opportunity for Star,” she said, adding that China Mobile would “allow us to expand the Star brands and services in the largest wireless market in the world”.
For Phoenix, the investment by China Mobile opens up potential future co-operation using the wireless operator’s huge subscriber base and the possibility of delivering TV content over its network.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in