The Financial Times and the South China Morning Post both report on Beijing Youth Daily’s plans to float on the Hong Kong stock exchange to raise HKD500 million to one billion.
The meat of the stories is reproduced below. Neither of the articles addresses what is sure to become an issue once Mainland media entities start listing on foreign markets: will foreign companies start suing for IPR violations? In the case of the Beijing Youth Daily, perhaps OK and Hello magazines might start taking an interest…
But back to the Beijing Youth Daily IPO:
The SCMP says this:
The newspaper publisher, founded by the Communist Youth League and controlled by the Beijing municipal government, had originally planned to raise up to 1.5 billion yuan on the Shanghai Stock Exchange early next year.
“The size of [Beijing Youth Daily’s Hong Kong] IPO is not particularly big, but it is strategically important,” a source said. “The central government wants to use it as a test case to push more aggressive market reform of the media sector.”…
…In preparation for a listing, in 2001 Beijing Youth Daily established a limited liability entity – Beijing Youth Media Development – to hold its non-editorial assets. Under Chinese law, publicly listed companies are not allowed to own newspaper, magazine or broadcast licences.
The Financial Times adds some analysis to the story:
The General Administration of Press and Publication declined to give details of whether there were plans to allow direct foreign investment in newspaper operations. “The content of the news publication reform trial is secret, we cannot freely release it to outsiders,” an administration official said on Tuesday.
Such reticence reflects in part continuing political sensitivities over the level of private and foreign involvement to be permitted in the news media. To ease such concerns, investment is being limited to non-core operations spun off from parent newspapers or broadcasters and Chinese management control is required.
Beijing Youth Daily is to list its business operations such as advertising and sales departments, which will fund the separately controlled editorial unit under a long-term contract.
The paper plans to use the proceeds in part to fund forays into other media sectors such as broadcasting and business news.
“If this succeeds, it may be that other newspapers will be allowed to follow,” one person familiar with the IPO plans said.
A number of other newspapers are hoping to hold domestic listings to help them survive in the increasingly competitive domestic media market.
The increasing focus on attracting readers has already had a dramatic impact on the kind of coverage available, with increasing discussion of sensitive topics such as official abuses of power. But state controls remain and journalists who go too far can face harsh penalties.
The FT story is here, the SCMP story is on Asia Pacific Media Network here.