Rupert Murdoch's News Corp. is selling a controlling stake in three of its TV businesses in China to a government investment fund as the media conglomerate scales down its ambitions in a market where foreign investors have struggled to succeed.
The fund, China Media Capital, will become a partner in TV channels Xing Kong, Xing Kong International and Channel (V) Mainland China and the Fortune Star Chinese movie library, the two companies announced Monday. No financial details were released.
The sale marks a change in strategy for News Corp. in China's heavily regulated media market, where the communist government limits foreign ownership. Other media companies also have launched partnerships with Chinese entities to gain a bigger foothold.
News Corp. has pursued ventures in China for nearly two decades but has backed off its ambitious plans in recent years as the government tightened controls on media.
In 1993, Murdoch paid $950 million to acquire Star TV, a satellite broadcaster founded by Richard Li, son of Hong Kong billionaire Li Ka-shing. Its expansion into China was curtailed when Beijing banned use of home TV satellite dishes and barred most mainland cable systems from carrying the channel.
Murdoch faced criticism after Star TV dropped the British Broadcasting Corp.'s BBC World news channel. Critics said he was trying to appease Beijing in order to gain better access to China's market, where the government is quick to crack down on media content it deems as undermining its rule.
Murdoch's wife, Wendi Deng, was born in China and played a role in the 2007 launch of a Chinese service of News Corp.'s MySpace social networking Internet site.
China Media Capital is controlled by state-owned Shanghai Media Group and the government's China Development Bank. The fund says it has 5 billion yuan ($740 million) in assets and plans to target media investments in China and abroad.
"The entry of Chinese capital into international media market will help facilitate its changes and development," CMC chairman Li Ruigang said in a statement. "CMC will continue our efforts in developing operational and investment platforms for international media."
China has the world's most populous media market, with more than 400 million television viewers. The communist government wants foreign involvement to help develop the industry but wants the benefits to flow to state-owned companies and limits foreign ownership and use of foreign programming.
Flush with cash from its economic boom, the government is in the midst of a multibillion-dollar campaign to expand the presence of state television and other state media abroad in order to promote Beijing's views.
Chinese authorities also are pushing state-owned media companies to expand into profit-oriented ventures abroad.
News Corp. owns newspapers, TV stations and other media assets worldwide including The Wall Street Journal, the 20th Century Fox film studio and the Fox television network. It reported global revenues of $32 billion last year.
The CEO of Star China, Jack Gao, will be chief executive of the new venture, which will be headquartered in Beijing, the companies said.
Last year, the Fox Filmed Entertainment unit of News Corp. invested in its first Chinese film, the Chinese-language romantic comedy "Hot Summer Days" co-produced with Star and China's Huayi Brothers Media Corp.
The Australian-born Murdoch has openly expressed frustration about dealing with Chinese authorities.
In 2005, Murdoch complained at a New York conference that News Corp. had "hit a brick wall" in China. He said Chinese authorities were "paranoid" and no longer wanted foreign investors in their media market.
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