News Corporation announced a deal to sell a controlling stake in Star China’s TV business to China Media Capital (CMC). The seller, however, will retain a stake in the joint venture and News Corp. still hopes to participate in the Chinese TV market and continues to have other media investments in the country as well.
The Star China TV business consists of Xing Kong, Xing Kong International and Channel [V] Mainland China, along with its Fortune Star Chinese movie library.
CMC, China’s first private equity fund with a focus on investment in the media industry, was established in April 2009 with the backing of the National Development and Reform Commission. The agreement with News Corporation represents CMC’s first investment project.
Xing Kong and Xing Kong International are general entertainment channels while Channel [V] Mainland Channel is a popular music brand among the youth audiences. The Fortune Star Chinese movie library has a total of 757 Chinese-language titles, a number of which have worldwide perpetual rights. The partners say the content reaches Chinese communities across the globe.
Jack Gao, Vice President of News Corporation and CEO of Star China, will be the CEO of the new company. The joint venture will be headquartered in Beijing with offices in Shanghai, Guangzhou, Chongqing and Hong Kong.
“This partnership is an extension of our long-term cooperation with News Corporation. 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 Li Ruigang, Chairman of China Media Capital.
“The agreement with CMC recognizes the value we have created in Star China and enables us to continue to grow it for the future,” said James Murdoch, Chairman and Chief Executive, Europe and Asia, News Corporation.
In addition to Xing Kong and Channel [V], News Corporation’s other broadcast channels in China include Star Movies and National Geographic Channel. News Corporation also owns 17.6% of Phoenix Satellite Television which runs Phoenix Chinese Channel, Phoenix InfoNews and Phoenix Movies Channel. Additionally, it broadcasts Mandarin-language sports channels EPSN and Star Sports through its 50% owned ESPN Star Sports joint venture. News Corporation’s other investments in China include Chinese WSJ.com and MySpace China.