The South China Morning Post (SCMP), Hong Kong’s 118-year-old English-language newspaper of record, may change ownership from private to public hands, according to anonymous sources who spoke with Bloomberg. While the SCMP leadership has denied these reports, rumors have been growing over the past year that the current owner, Alibaba, will sell its majority stake in SCMP to a Chinese state-owned enterprise. The Chinese government’s crackdown on the tech and media industries, and on Alibaba in particular, portends this divestment and potentially greater constraints on SCMP’s editorial freedom. Bloomberg reported on the recent discussions of Alibaba’s divestment from SCMP:
A company owned by the Chinese government is working on an offer to acquire Hong Kong’s influential South China Morning Post, according to people familiar with the matter.
Bauhinia Culture (Hong Kong) Holdings Ltd. is interested in a deal with Alibaba Group Holding Ltd. that would see the city’s most prominent English-language newspaper join its stable of media properties, the people said, asking not to be identified as the information is private.
[…] A sale to Bauhinia would potentially assuage the government’s concerns, as it is fully state owned. It also bolstered its presence in Hong Kong’s media scene in April when it agreed to buy a stake in Phoenix Media Investment Holdings Ltd., owner of local broadcaster Phoenix TV.
Deliberations are ongoing and other state-backed entities could also consider submitting offers for SCMP, the people said. A deal may not materialize, they said. [Source]
Reuters later reported that the SCMP leadership strongly denied allegations of an impending change in ownership:
Alibaba has no plans to sell Hong Kong’s South China Morning Post (SCMP), the e-commerce giant’s co-founder Joe Tsai was quoted as saying in a letter to SCMP staff seen by Reuters, following a Bloomberg News report that a Chinese government-owned firm was weighing up an offer to buy the paper.
SCMP’s CEO Gary Liu said in the letter that Joe Tsai, Alibaba’s co-founder and SCMP’s chairman, had asked him to pass on a message that there were no plans for a change in ownership.
“There has never been any discussion about SCMP’s ownership, and Alibaba has no plans for any change. There’s no basis for any rumor or speculation,” Liu quoted Tsai as saying. [Source]
Gary Liu, SCMP CEO, not super happy about this Bloomberg story according to an internal staff email. Also includes note for Alibaba’s Joe Tsai who says there have never been discussions about the paper’s ownership. https://t.co/A3gq6wG2h5 pic.twitter.com/RoaV3vtdfi
— Timothy McLaughlin (@TMclaughlin3) November 5, 2021
But Nikkei Asia described how some of SCMP’s staff were not entirely convinced:
[S]peculation about the possibility of SCMP turning into a state-owned media outlet sent shock waves through the newsroom.
“I am worried because no matter how many times the management denies these stories, they keep coming back,” one staff member said. “Some of the journalists who have reported the news previously, particularly at the [Wall Street Journal] have a good record on Alibaba stories, so of course it is of concern. We don’t know what will happen, but fears of an SOE takeover will not help the mood in the newsroom, where we’ve already lost a lot of colleagues.” [Source]
Jack Ma will sell South China Morning Post to Chinese state-owned company, I've been predicting for months. Bloomberg seemed to confirm it today, but SCMP head Gary Liu & Alibaba's Joe Tsai denied it.
Meanwhile, Hong Kong journalists are fed up… More: https://t.co/GIo2jo4zkp— Jeremy Goldkorn (@goldkorn) November 5, 2021
The Wall Street Journal first reported this story in March, quoting sources who stated that the Chinese government had asked Alibaba to divest from its media assets. While it is known primarily as an e-commerce company, Alibaba also owns majority stakes or substantial holdings in a number of prominent media organizations. WSJ’s Jing Yang enumerated all of the media assets held by Alibaba and its affiliate Ant as of March:
Media assets held by Alibaba include:
- 100% of the South China Morning Post, Hong Kong’s premier English newspaper.
- Nearly 37% of Yicai Media Group, one of China’s most influential news outlets.
- About 30% of Weibo, a Twitter-like social media platform. Its stake is valued at more than $3.5 billion.
- 6.7% of Bilibili, a video platform popular among younger Chinese people. Its stake is worth nearly $2.6 billion.
- 5% of Mango Excellent Media, a subsidiary of government-run Hunan TV. Its stake is worth about $819 million.
- Nearly 5.3% of Focus Media, China’s largest offline advertising network. Its stake is worth nearly $1.2 billion.
Media assets held by Ant include:
- 16.2% of 36Kr, a U.S.-listed digital media outlet focused on technology. Its stake is worth $25 million.
- Former 5.62% stake in Caixin Media, one of China’s most respected news sources. Ant sold its interest in 2019. [Source]
One major motivation for the Chinese government’s crackdown on Alibaba’s media assets is fear of Alibaba’s sway over public opinion. In the spring of 2020, Weibo deleted posts, comments, and search topics regarding allegations of a senior Alibaba executive’s extramarital affair. His “failure in properly handling his family affairs has caused a public opinion crisis and damaged the company’s reputation,” CGTN summarized. While there was no proof that Alibaba directly ordered the removal of content on Weibo, internet regulators penalized Weibo for censoring this public information.
Regarding its investments in media companies, Alibaba stated in March of this year that “we do not intervene or get involved in the companies’ day-to-day operations or editorial decisions.” Promises alone may not have been sufficient to appease regulators. In September, Alibaba responded to government pressure by divesting from its minority ownership in Mango Excellent Media, only nine months after acquiring a 960-million-dollar stake in the company. Mango Excellent Media owns Mango TV, the most-watched network in China after CCTV.
The potential sale of SCMP would be consistent with Alibaba’s sale of Mango Excellent Media and the government’s recent crusade against private media. Under the Hong Kong National Security Law, authorities forced Apple Daily to shut down in June and pressured its parent company Next Digital to liquidate its assets in September. In October, the Cyberspace Administration of China removed Caixin from its media “whitelist.” That same month, the National Development and Reform Commission released a draft regulation banning all private capital from investing in media. SCMP, which has often covered topics deemed too sensitive for mainland Chinese newspapers, may be next in line.
Did someone else notice that SCMP didn't publish anything about Peng Shuai and Zhang Gaoli scandal?
— Aadil Brar (@aadilbrar) November 7, 2021
Bloomberg scoop: https://t.co/vWnHudBqR1 Little chance SCMP will slip into non-Chinese hands again — and somewhat inevitable Beijing would seek to take control, as it reins in Jack Ma.
Elsewhere in English, RTHK is gov't-owned, Standard is Sing Tao-owned.
— Tom Grundy (@tomgrundy) November 6, 2021
South China Morning Post has been a great source for breaking news on China. Joe Tsai, an #Alibaba board member, denounced plans to sell #SCMP.
China doesn’t need a second China Daily. It’s in China’s and the world’s interest to keep SCMP more like SCMP.
— Shirley Ze Yu (@shirleyzeyu) November 6, 2021
In a coda to this new era of strictly regulated media, veteran journalist Zuo Fang, the founder of Southern Weekly, passed away on Wednesday at the age of 96. A self-described “hopeless idealist,” Zuo made Southern Weekly into one of the most influential newspapers in mainland China, with bold investigative pieces often critical of the government, until the publication’s gradual decline in the 2000s and early 2010s. Han Wei at Caixin described Zuo’s background and tenure at Southern Weekly:
Born in 1935 in Guangzhou, Zuo spent seven years in the military and was admitted to Peking University in 1957, majoring Chinese literature. He joined the Nanfang Daily in 1962 and was assigned to start up the Southern Weekly in November 1983.
Zuo was the editor-in-chief of the Southern Weekly until he retired in 1994. He continued working for the newspaper for four years after retirement.
During Zuo’s tenure, the Southern Weekly set out to foster its specialization on news while taking a firm grasp of feature stories.
“While there may be truths that we can’t speak of, we must never utter falsehoods,” Zuo once said. [Source]
I can't forget these words from Southern Weekend founder Zuo Fang when he spoke in Hong Kong in June 2014. As Hong Kong's journalists struggle to maintain their independence and professionalism, they have become even more poignant. pic.twitter.com/mPQ6AIbHeV
— Yuen Chan (@xinwenxiaojie) April 12, 2021
Zuo’s death occurred one day after the UN’s International Day to End Impunity for Crimes Against Journalists. In a separate event on Monday, China observed its annual “Journalists’ Day,” established in 2000 in honor of Liu Yusheng, a reporter who was executed by the Nationalist Kuomintang government in 1933 for exposing government corruption. Xi Jinping marked the event by congratulating Xinhua for having unswervingly followed the CCP and urging it to maintain this correct political orientation. Juxtaposed with these holidays is the further erosion of press freedom in China. Citizen journalist Zhang Zhan, sentenced to four years in prison for reporting on the Covid-19 outbreak in Wuhan, is “close to death” after an ongoing hunger strike and mistreatment. In Hong Kong, a recent Foreign Correspondents Club (FCC) survey revealed that 84 percent of FCC members believed that the working environment for journalism had “changed for the worse” since the introduction of the National Security Law, and nearly half were considering leaving the city due to the decline in press freedom.
NEW: A survey of @fcchk membership shows correspondents and journalists in Hong Kong believe press freedom has deteriorated significantly since the national security law, and a majority remain very concerned about a potential 'fake news' law.https://t.co/P3sNtZMyYi
— Iain Marlow (@iainmarlow) November 5, 2021
Kind of ironic that it's China's Journalists' Day today. While journalists working for official media are celebrating it, independent journalists arrested or jailed for not reporting in tune with the party's rhetoric don't have such a chance. https://t.co/1hE0IWF9f1
— bc Yume 📷 (@BakaChocolate) November 8, 2021
[2/3] On China’s National Journalist’s Day, RSF urges the Chinese regime to release #COVID19 journalist and nominee of #RSFawards2021, #ZhangZhan, who claims her innocence through a partial hunger strike and faces impending death if kept in jail. https://t.co/vco48Or9PM
— RSF in English (@RSF_en) November 8, 2021
多維新聞: Global Times Editor Hu Xijin admits on Nat'l Journalists Day that it's becoming more difficult for journalists in #China today because media practitioners are subjected to increasing restrictions 胡錫進記者節發文：對媒體限制在增多 干預在加大https://t.co/OTrzcbN25p
— Patricia M Thornton (@PM_Thornton) November 8, 2021
