Press Release

Murdoch Moves Ahead in India and Retreats in China

23 October 2013

?It’s become a familiar story for Rupert Murdoch: An advance in India, a retreat in China. The billionaire has become a major force in the Indian entertainment world, with 21st Century Fox’s (FOXA) Star India subsidiary broadcasting over more than 20 channels in local languages such as Hindi, Tamil, and Bengali. While Star has expanded in India, Fox has had no such luck in China, where Murdoch has failed to overcome resistance from the TV regulators wary of foreigners.

Developments over the past few days illustrate the different directions for Murdoch in Asia’s two giants. Just days after Murdoch unloaded his remaining stake in a Chinese satellite television operator that once promised entry into the China market, his Indian TV company announced a partnership with Indian conglomerate Reliance Industries (RL:IN) and talent agency IMG Worldwide to reach Indian soccer fans with the launch of the Indian Super League. “Our objective is nothing short of creating a movement around football in India,” Star India Chief Executive Officer Uday Shankar said in a statement. “We want to put India on the global map.”

That won’t be easy. The country traditionally is mad for cricket, with other sports unable to capture much attention. Reliance boss Mukesh Ambani and fellow billionaire Lakshmi Mittal of steelmaker ArcelorMittal (MT) tried to bankroll some athletes ahead of the Olympics in 2012, but India managed to win no gold medals and just six of any kind at the London Games, putting the world’s second-largest country at No. 55 in the medal standing. As poor as that showing might seem, it was actually a step up for the country, with Indian athletes taking home more medals than ever before.

At least Star and its partners understand they will need to be patient. Getting Indians to become passionate about local soccer will be a long-term project, the companies acknowledged in their statement announcing the launch of the league. The three partners “are focused on growing the game to national prominence,” they said, with the goal of helping India qualify for the World Cup. They refer not to the 2014 competition in Brazil (and not even the 2018 World Cup in Russia or the 2022 one in Qatar) but to the 2026 World Cup in a place yet to be determined.

Fox executives have much less patience for China. Private equity firm TPG is buying 21st Century Fox’s remaining 12.15 percent stake in Phoenix Satellite Television(2008:HK), a Hong Kong-listed company that broadcasts entertainment and movie channels in China, for $214 million, the companies announced on Oct. 18. Fox had already sold 5.3 percent of Phoenix back in March.

The sale represents the end of Murdoch’s dreams of becoming a player in Chinese television. At the start of the 2000s, his son, James, was chairman of Star TV, which was based in Hong Kong and determined to break into China. Despite agreements that were supposed to allow Star to operate in the mainland, by 2005 Murdoch pere was griping about hitting a “brick wall” in the country, thanks to regulators whom he called “quite paranoid about what gets through.”

Not quite the way to win over Chinese regulators. Even without the name-calling, though, Murdoch wouldn’t have been able to make much progress winning over the culture mandarins at China’s State Administration of Film, Radio and Television. Hollywood rivals Viacom (VIA), Sony (SNE), and Time Warner (TWX) also once had grand ambitions for China’s TV market that went nowhere, says Simon Twiston Davies, chief executive of Hong Kong-based media consultancy SimonTD & Associates and former CEO of the industry trade association CASBAA. China may have eased restrictions on foreign investment in some industries, but when it comes to television the regulators “are just as strict, if not stricter than ever before,” he says.

Given the obstacles in China, getting an Indian soccer team ready for the 2026 World Cup doesn’t seem such an impossible task.


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