Tag Archives: News Corp

Hollywood-China Love Affair In Chengdu Spotlight

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Hollywood execs flock to Chengdu

Many of the usual global CEOs are in China this week for the annual Fortune Global Forum in the interior city of Chengdu, but what’s really interesting this year is the presence of many big Hollywood executives. I use the word “interesting” instead of “surprising”, because the presence of top executives from names like DreamWorks Animation (Nasdaq: DWA) and Time Warner (NYSE: TWX) isn’t really that unexpected considering the sudden love affair between China and Hollywood that’s developed rather rapidly over the last year and a half. Even the music industry is finally starting to believe in the huge potential of the China market, with the head of the US-based Recording Academy, organizer of the Grammy Awards, also attending the event in Chengdu. Read Full Post…

“Titanic” Director Splashes Into China 知名导演卡梅隆进军中国

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Hollywood’s growing love affair with China continues to steam ahead with word that James Cameron, director the blockbusters “Titanic” and “Avatar”, is setting up a joint venture in the city of Tianjin. Unlike the growing number of Hollywood companies that have flocked to China this year, Cameron’s venture won’t offer any mass-market products to consumers and instead will focus on supplying technology to Chinese filmmakers to help them make more 3D moves.

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Wanda’s AMC Buy: The Show Isn’t Over Yet 万达并购美国AMC影院：表演还未结束

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The headlines are buzzing today with word that China’s leading theater chain operator Wanda Group has agreed to buy struggling US chain AMC Entertainment, calling it a landmark cultural exchange for Chinese firms expanding overseas. But to those applauding the deal, I would quickly caution not to celebrate just yet, as I see a greater than 50 percent chance that the sale will never close due to opposition from US politicians in this presidential election year. Let’s look at the deal first, which looks benign enough and was actually first reported 2 weeks ago when talks were in advanced stages. (previous post) Under their agreement, Wanda will buy struggling AMC from its current private equity owners for $2.6 billion, in what foreign media are calling the largest ever buyout of a US company by a Chinese one. (English article) Chinese media are noting the deal comes just a week after Rupert Murdoch’s News Corp (Nasdaq: NWSA) agreed to buy 20 percent of Bona Film (Nasdaq: BONA), a leading Chinese film distributor, implying the doors are opening in both directions to cross-border investment in the sensitive media and entertainment sectors. But anyone who follows Chinese investments in the US will know that US politicians love to get involved in anything even remotely sensitive, and that is even more likely to happen in this election year as candidates look for votes by portraying themselves as tough on China. That kind of grandstanding has led to problems mostly in the telecoms space so far, with China Mobile (HKEx: 941; NYSE: CHL), Huawei and ZTE (HKEx: 763; Shenzhen: 000063) all running into recent obstacles in their attempts to expand in the US. Politicians have also attacked the banking regulator for recently allowing several of China’s top banks to set up branches and make small acquisitions in the US for the first time, again reflecting how candidates are seizing on fears of these kinds of Chinese investments to raise their profiles. (previous post) Considering that movies are such a central part of American culture and that movie theaters are clearly a part of that picture, I could very easily see politicians raising objections to this latest deal, questioning the wisdom of letting such an important company into Chinese hands. Never mind that AMC and the theater industry in general are struggling due to tough competition not only from other theaters, but also from DVDs and newer products that let people watch and download movies over the Internet. The politicians won’t care about any of that, and they probably won’t care if AMC goes bankrupt in the end because no other company wants to buy it. All they will care about is looking tough against China in order to gain votes. All that said, I predict we will hear the first political objections to this deal within 2 weeks and potentially much sooner, and that all the negative publicity will give the deal a greater than 50-50 chance of ultimately collapsing, to the benefit of no one except the politicians.

Bottom line: The planned purchase of struggling US theater chain AMC by a Chinese buyer is likely to collapse due to objections from vote-seeking US politicians.

Related postings 相关文章:

◙ Welcome to the US Dollhouse, China Mobile 中移动和万达进军美国料将失败

◙ News Corp Makes New Play for China 新闻集团入股博纳影业集团

◙ Disney, Tencent Tie-Up to Animate China 迪斯尼、腾讯合作研发动漫

News Corp Makes New Play for China 新闻集团入股博纳影业集团

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Rupert Murdoch isn’t giving up on China’s difficult media market despite his numerous setbacks there, with word that his flagship News Corp (Nasdaq: NWSA) is buying 20 percent of Bona Film (Nasdaq: BONA), one of the nation’s few privately held movie distributors. But if past experience is any indicator, this latest tie-up could also be doomed for disappointment due to the nature of the investment. Murdoch was once one of China’s most bullish media investors, seeing huge potential in its market of 1.3 billion viewers. But the company, now at the center of an unrelated hacking scandal in Britain, largely abandoned the market 2 years ago after many failed ventures, mostly caused by News Corps’ own overzealousness and Beijing’s equally strong reluctance to open the sensitive sector. The main difference this time seems to be strong signals from Beijing that it’s finally preparing to liberalize the sector, including a big new opening to foreign investment. Let’s look at the actual news, which says that News Corp will acquire the stake from Bona’s chief executive. (English article) No other terms were given, but based on Nasdaq-listed Bona’s latest market value, that would translate to a purchase price of about $75 million. From an investor’s perspective, this deal does indeed look like an interesting play into a sector that could soon see rapid expansion. China’s movie market is already the world’s second largest after the US, with the majority of revenue coming from US films. What’s more, the market could soon be set for big new growth, following China’s relaxation earlier this year of a strict quota that previously only allowed the import of 20 foreign films each year. Under the new quota, the number will rise to 34, or about 40 percent higher than the previous total. If ticket sales rise by a similar amount, that could translate to nearly a $3 billion box office next year, a healthy boost from the $2.1 billion for 2010. This latest tie-up follows a number of previous failures for News Corp, including its operation of a TV station that never gained an audience and which it sold a couple of years ago. Other News Corp investments in Internet company NetEase (Nasdaq: NTES) and Phoenix Satellite Television (HKEx: 2008) were successful in terms of financial returns, but were also largely failures in helping News Corp gain access to China. Frankly speaking, this latest tie-up looks most similar to the earlier Phoenix one, which saw News Corp also sign on as a strategic minority investor, only to be largely ignored by the company’s charismatic founder and chief executive Liu Changle. I suspect the same will happen in this latest tie-up, since founders of Chinese companies often like to run their own shows and don’t seem to like listening to so-called strategic investors, regardless of how much experience those investors bring. If that’s the case, look for another frustrating tie-up for News Corp in terms of expanding its China presence, though it will probably earn a nice return on this modest investment.

Bottom line: News Corp’s return to China with a new investment in a film distributor is likely to earn good financial returns, but will ultimately end in frustration in terms of as a strategic tie-up.

Related postings 相关文章:

◙ Disney, Tencent Tie-Up to Animate China 迪斯尼、腾讯合作研发动漫

◙ More Media IPOs From People’s Daily, Shopping Channel 电视购物，继人民日报后又一计划上市的媒体

◙ QVC Opens Shop in China QVC与中央人民广播电台合作运营电视购物频道

News Digest: May 16, 2012 报摘： 2012年5月16日

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The following press releases and media reports about Chinese companies were carried on May 16. To view a full article or story, click on the link next to the headline.

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◙ Sina (Nasdaq: SINA) Reports Q1 Financial Results (PRNewswire)

◙ News Corp (Nasdaq: NWSA) to Acquire 20 Pct of Chinese Film Distributor (English article)

◙ SouFun (NYSE: SFUN) Announces Unaudited Q1 Results (Businesswire)

◙ NetEase (Nasdaq: NTES) to Launch Smartphone – Source (English article)

◙ Suntech (NYSE: STP), Krannich Solar Announce 120MW Sales Agreement (PRNewswire)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

Bona Opens New China Back Door 博纳欲与美国同行合拍电影 中国同好莱坞恋情升温

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The growing new love affair between Hollywood and China is taking yet another step forward, with news that New York-listed movie maker Bona Film (Nasdaq: BONA) is in talks with several major US studios to co-produce films for the China market. (Chinese article) In fact, such co-productions aren’t completely new, and many of the other studios have used them in recent years to circumvent a strict quota system that limits the number of foreign films that can be imported to China each year. But Bona’s plan looks particularly aggressive, presenting a potentially interesting proposition for foreign investors looking to buy into the China film story. According to the reports, Bona is talking with a number of major studios, including 20th Century Fox, Universal, Sony Pictures (Tokyo: 6753) and Paramount (NYSE: VIAb) about co-producing movies for the Chinese market. Furthermore, the company’s chief executive says his ultimate goal is to make 2 such co-productions a year. Such a large number would mark a big opening into China for the foreign studios, which until recently were only allowed to collectively export 20 of their films each year into China, now the world’s second largest movie market. Beijing recently increased the total by saying it would allow another 13 movies into the market each year using high-tech formats like 3D. Still, the appetite and potential for high-quality films in China is clearly capturing Hollywood’s attention, leading to a recent flurry of moves into China by the major studios. One of those moves, in fact, saw 20th Century Fox’s parent News Corp (Nasdaq: NWSA) take a 20 percent stake in Bona Film itself last month (previous post); accordingly, I wouldn’t be surprised if 20th Century Fox ends up signing the first co-production deal with Bona in this new round of tie-up talks. Bona’s talks come as other major studios are making their own new moves into China, amid increasing signs that Beijing wants to open the industry to more outside investment. Disney (NYSE: DIS) and DreamWorks Animation (NYSE: DWA) both announced new animation joint ventures in China earlier this year (previous post); and HNA Group and Wanda Group have both discussed major new moves to open and expand their domestic theater operations to accommodate the expected big influx of Hollywood-quality movies. (previous post) Another name to watch could be Huayi Brothers (Shenzhen: 300027), one of China’s other major privately held film studios with foreign experience, though that company has tended to focus more on co-productions with other Asian firms. Either way, these foreign-focused Chinese studios could make an interesting investment play into the market as it prepares for major expansion, with the potential to perhaps someday rival some of the major US entertainment giants.

Bottom line: Bona Films’ aggressive pursuit of foreign co-productions reflects the recent opening of China’s film industry, which is forging growing ties with Hollywood.

Related postings 相关文章:

◙ News Corp Makes New Play for China 新闻集团入股博纳影业集团

◙ China-Hollywood Lovefest Continues With Latest Deal 小马奔腾携手数字王国 中国与好莱坞恋情继续

◙ Wanda’s AMC Buy: The Show Isn’t Over Yet 万达并购美国AMC影院：表演还未结束

Internet Investors Seek Refuge in Big Names 互联网投资者选择性支持中国市场领头羊

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Financing for Chinese web firms may have slowed as the country’s Internet bubble starts to burst, but a couple of major new deals show it certainly hasn’t stopped, with investors simply becoming more selective about who they support. The latest deals have seen Internet heavyweight Tencent (HKEx: 700) raise a hefty $600 million in its first US dollar bond offering, while leading clothing retailer Vancl has reportedly raised $230 million in new venture funding. Let’s look at the Tencent deal first, whose $600 million was at the lower end of its original plan to raise anywhere from $500 million to $1 billion. (English article) The fact that the figure came in at the low end shows investors are still somewhat wary of Chinese Internet firms, which have been the source of a series of recent accounting scandals on Wall Street. Concern is also no doubt high that China’s overheated Internet sector could be nearing a correction. Lastly, some investors might also be concerned about potential overseas acquisitions that Tencent might be eying for this new money. The company has previously courted dubious overseas acquisitions including News Corps’ (Nasdaq: NWSA) faded MySpace social networking service, even though it ultimately lost out in that bidding war. But that doesn’t mean that Tencent won’t bid for more troubled overseas Internet assets. Meantime, Vancl’s securing of this latest funding probably comes as a welcome relief for a company that has had to repeatedly delay a planned US initial public offering due to very weak sentiment towards China Internet stocks amid the recent string of reporting scandals. (English article) Several companies have gone ahead with IPOs despite the current negative climate, mostly with poor results. Vancl clearly isn’t as badly in need of cash as these other companies, and its receipt of these new funds should help it to buy more time until the IPO climate hopefully improves next year. All this shows that investors are still willing to support premium Chinese Internet names, though don’t look for many start-ups to receive major funding or make public offerings in the next 6 months.

Bottom line: New major fund raising by Tencent and Vancl show investors are willing to fund premier Internet names, though younger firms are likely to see far less investor interest in the next 6 months.

Related postings 相关文章:

◙ China Internet Bubble Sees Vancl Dressing Down 中国互联网泡沫见证凡客裁员

◙ 360Buy $5 Bln IPO Plan Looks Like Desperation 京东商城50亿美元上市计划凸显绝望

◙ Xiu.com Funding Puts Glamor in Online Fashion 服饰类网站前景看好

Hulu Makes First Global Stop in Japan, China Next?

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And the winner is … Japan. That’s the word coming from Hulu, the popular video streaming site backed by 3 top Hollywood studios, which has just announced that Japan will be the first stop in its international expansion. (company announcement) The fact that China wasn’t chosen isn’t all that surprising, as Japan and most of Western Europe boast far wealthier consumers to buy the mostly paid programming services offered by Hulu, whose primary backers include Disney (NYSE: DIS), News Corp (Nasdaq: NWS) and Comcast’s (Nasdaq: CMCSA) NBC Universal. But what’s interesting for China watchers is the language towards the bottom of the announcement, where Hulu describes itself as a company with offices in “Los Angeles, New York, Chicago, Seattle, Tokyo and Beijing.” That’s the exact wording, with Tokyo and Beijing listed as Hulu’s only offices outside the US, in that order. Does that mean that China will be the next stop on Hulu’s global expansion? I would say there’s a good chance the answer is “yes”, given the recent flurry of Hollywood deals to provide content to the growing number of Chinese video and music sites under growing pressure from Beijing to delete illegal content and offer legal material instead. Top online video site Youku (NYSE: YOKU) has been a leader in the recent trend, signing deals with Warner Brothers (NYSE: TWX) and Philips Electronics (Amsterdam: PHG) (previous post), while leading search site Baidu (Nasdaq: BIDU) also recently signed a deal with several major record labels to offer legal copies of their music. (previous post) The timing also looks particularly good for Hulu, as it could offer its programs not only over the Internet, but also potentially over a state-of-the-art digital home cable network being rolled out soon by China Telecom (HKEx: 728; NYSE: CHA) or via a future similar network being created through an ongoing national cable TV consolidation plan. If the Japan roll-out goes smoothly, I’d look for a Hulu announcement in China possibly as early as the end of this year, but more likely in 2012.

Bottom line: Hulu’s move to Japan presages a move into China for the second stop on its global expansion, most likely in 2012.

Related postings 相关文章:

◙ Youku’s New Formula: Sponsored Programs 优酷“新配方”：赞助项目

◙ After Years, Baidu Does the Right Thing 百度多年来的一个正确之举

◙ TV Programers Dial Up Success on Internet 电视电影制片商迎来网络商机

 

Xunlei’s Shrinking IPO Disappears 迅雷无限期推迟IPO时间

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Yesterday I wrote that video- and music-sharing site Xunlei’s New York listing plan was fast shrinking, and today it looks like it’s disappeared completely, the victim of a perfect storm of market- and company-related factors. In a tersely worded statement, Xunlei said simply that it had delayed the offering “due to market conditions”. (company announcement) The offering’s downfall came swiftly, and marks a stunning turnaround for a company that just over a month ago said that it hoped to raise up to $200 million. (previous post) It already boasted Baidu (Nasdaq: BIDU) and Google (Nasdaq: GOOG) as previous backers, and went on to add News Corp (Nasdaq: NWSA) media mogul Rupert Murdoch to the list, though that backing may have lost some importance in light of the current scandal surrounding Murdoch’s newspapers in the UK. But then shaky accounting practices at Chinese companies became a major concern in the market over the last month, and Xunlei’s own confession that weak accounting practices could constitute an investor risk did little to help its case. Add to that a lawsuit by seven major global record labels over music piracy (previous post), and the offering quickly shrank by more than half, from the previous $200 million to about $75, by the time  Xunlei finally decided to scrap the deal, at least for now. The company is likely to relaunch this offering when market sentiment improves, and would be well advised to clean up its accounting books and the content traded on its site before it makes such an attempt. Of course, those kind of clean-ups could be costly — wiping out substantial amounts of revenue and significantly shrinking the company’s prospects. Still, I would expect to see Xunlei return to market in the next 2-3 months, this time in a much lower-key offering and probably seeking a much lower valuation than it previously hoped for.

Bottom line: Xunlei’s withdrawal of it IPO reflects both company and market issues, but it is likely to make a second, more low-key, lower-valued bid in the next 2-3 months.

昨天，我写了一篇关於视频和音乐分享网站迅雷纽约上市计划迅速缩水的文章，而今天，迅雷看似将彻底无限期推迟IPO，成为市场和公司因素“完美风暴”的受害者。迅雷在一份简要声明中称，鉴於目前的市场情况，该公司决定推迟上市时间。迅雷IPO急转直下，而一个月前该公司还表示，希望融资规模能达到2亿美元。迅雷曾宣称，其支持者包括百度<BIDU.O>、谷歌<GOOG. O>及新闻集团<NWSA.O>媒体大亨默多克，鉴於默多克因窃听丑闻缠身，这种支持似乎已不那麽重要了。过去一个月来，中国赴美上市企业会计丑闻成为市场的主要关注点，而迅雷承认，会计问题或构成投资者风险对其亦无益。此外，全球七大唱片公司起诉迅雷侵权。该公司IPO规模迅速缩水逾一半，从先前的2亿美元降至迅雷最终决定暂停IPO计划时的7,500万美元左右。  如果市况转好，迅雷或将重启IPO，并可能会被建议提前清理会计账本和网站内容。当然，这种清理行动成本可能很高，会使其营收大幅减少，并导致公司前景大打折扣。不过，我预计迅雷未来两三个月将重归IPO轨道，届时迅雷料将更为低调上市，并可能大幅下调融资规模预期。

一句话：迅雷暂停IPO计划是出於公司和市场原因，但未来两三个月，该公司很可能会再次筹备上市，但将更低调，融资规模更小。

Related postings 相关文章:

◙ Xunlei’s Incredible Shrinking IPO 迅雷IPO规模缩水 纽约首秀或破发

◙ Xunlei’s Rich Parentage List Grows 迅雷投资方阵容强大

◙ Xunlei Marches Down IPO Aisle 迅雷迈向IPO之路