Murdoch Mulls China Exit Strategy

28 February 2006

Word from within the News Corporation executive washrooms is that Rupert Murdoch is disenchanted with the group's corporate progress in the People's Republic of China.

In particular, the mogul is said to be fuming that his high-investment Star TV satellite unit is still restricted to the southern province of Guangdong plus a handful of upscale hotels and apartments across the rest of the vast nation.

NewsCorp insiders say that Murdoch may vent his displeasure at the commissars' restrictions by selling NewsCorp's 38% stake in its Hong Kong-based Chinese joint venture, Phoenix Satellite Television. Apparently, the mogul had expected Phoenix to act as a trail-blazer for Star's trans-China expansion.

Explained an anonymous Phoenix executive: "Phoenix is developing in a healthy way, but running ahead and running alone. Originally, he [Murdoch] thought Phoenix would take Star TV's hand and lead it."

Although it is stressed that no detailed plan for an exit is on the table, Murdoch recently conceded to the press that NewsCorp's attempts to develop its business in China had "hit a brick wall".

As the ancient Chinese proverb has it: "Though above the mountain shall the fiery Phoenix fly, the Dragon's Claw shall banish Star from the Sky."

Data sourced from Financial Times Online; additional content by WARC staff