Thursday, November 29, 2012

=UPDATED= Next Media Parceled Out to Five Buyers

Tea pickers on the slopes of Alishan

UPDATE: I'm moving this to the top. Finally heard the reason for the fifth buyer. By adding the fifth buyer, they can separate the print and TV portions of the deal, meaning that the NCC can't impose the same condition of separation of cable TV and print they tried to before. The new deal also reduces Jeffrey Koo Jr's holding to just below the threshold required by the FSC. Next Media, as a friend observed, had the most powerful investigative team in the business. How much longer do you think that will remain true?

Student protests in front of the FTC and the legislative Yuan all day too. But the number is too small to gain international media attention, judging from the photos.

Adventures in Charity, episode #249:
I'm buying tickets at the Chiayi train station on Sunday with a big pile of 100 NT notes. A girl behind me in line leans forward and asks if I could loan her $100. I said sure, no problem, and slipped her a 100 NT note. She then asked me how she could pay me back. "What's your phone number?" "Forget it," I said, "I don't live here. You don't have to pay me back." Suddenly she looked at me crossly. "Hey!" she barked. "What kind of attitude is that?"

I put that tale there because you'll need some light humor to deal with the Next Media deal. A friend summed up the five buyers of Jimmy Lai's Next Media thusly:
  • Chinatrust Charity Foundation chairman, Jeffrey Koo Jr.
  • Formosa Plastics Group chairman, William Wong
  • Want Want China Times Group chairman, Tsai Eng-meng
  • Lung Yen Life Service Co. chairman, Lee Shih-tsung
  • Taiwan Fire and Marine Insurance Co. chairman, Lee Tai-hung.
Businessweek explained the deal, inked in Macau for tax purposes:
Next Media will sell its Taiwan print assets to four investors including Want Want Chinatimes Group President Tsai Shao-Chung, William Wong of the Formosa Plastics Group, Chinatrust Charity Foundation Chairman Jeffrey Koo Jr. and Lung Yen Life Service Corp. (5530) Chairman Lee Shih-tsung, Simon said.

Lai, known for criticizing the Chinese government, is exiting most of his Taiwan businesses after battling regulators for licenses and distribution rights. The investment by Tsai, son of Want Want China Holdings Ltd. (151) Chairman Tsai Eng-meng, may raise regulatory concerns as Lai’s Apple Daily and the Tsais’ China Times will have a combined newspaper market share exceeding 45 percent, according to National Chung Cheng University’s Kuang Chung-Hsiang.

...

Lee Tai-hung, chairman of Taiwan Fire & Marine Insurance Co. (2832), replaces Tsai in the group buying the television assets, Simon said. The pacts were signed yesterday, he said.
The deal requires approval from the Fair Trade Commission, the National Communications Commission, and the Financial Supervisory Commission. Each may find reason to balk. The FSC had objected to Jeffrey Koo Jr's 7% stake in a financial firm (blogged). The Fair Trade Commission may not like the 45% share of the media market it gives the Tsai media operations. The National Communications Commission, you may recall, gave tentative approval but required Tsai to sell off his cable TV operations. Tsai gave the NCC the digitus impudicus, and the case is now in the courts.

The articles in the international media tended to (wrongly) frame the issue as a pro/anti-China affair. For example, the AP article on the deal is solid as far as it goes, but it wrongly characterized the student protests as anti-China when they are pro-democracy. The business publications covering the story pointed out that it is likely that the Tsai-owned media will go soft on China's territorial expansion and other problems, but failed to mention that Apple and Next Media also provide independent coverage of domestic corporate shenanigans, including environmental stories that other media don't publish.

Also, I heard tell of a rumor running around that one of Taiwan's online media outfits, NOWNEWS or ETTODAY, is going to be bought by a Chinese firm. Take with NaCl.....

ADDED: Taipei Times editorial on the sale.
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7 comments:

Muo said...

Lai said he's selling because of over-regulation. Now people want the deal to be regulated.

Yes, some kinds of regulation are appropriate and some are not. But the best (only?) way to force the media's audience to think maturely is to let the media run its course. We had our ups and downs with Lai's Apple and now we'll battle with Tsai et al. Welcome to life on earth. The media ideally shouldn't be our enemy, but it's not our friend either and it never will be, no matter how properly regulated it is.

Funnily enough, I would put money on a resurgence of KMT-affiliated/rooted publications. You have some real PRC-antagonistic forces in there.

SY said...

>>We had our ups and downs with Lai's Apple and now we'll battle with Tsai et al. Welcome to life on earth...<<

-----
Sure, guess who won the battle with Lai.

"Back on earth", those two "buyers" that suddenly appeared out of nowhere yesterday must have had a supercomputer to instantly calculate and conclude within a few days that they have enough money to fund the purchase and the long-term operation of Next Media and that the risk is acceptable and the ROI expectation is reasonable. No due diligence required.

The "life-on-earth" reality is that those so-called "five buyers" are but proxies of one single buyer: the Chinese government. These five proxies don't have the kind of money to initially buy the media outlets and further more to burn for years-to-come on the long-term daily operations.

"Back on earth", you are not fighting the media; you are fighting against the Chinese government who has long realized that buying Taiwan is way cheaper than taking Taiwan by military force.

"Back on earth", guess who has infinite monetary ammunition and infinite energy and time for the fight.

This is not a press war within one single democratic society. This is a war between two countries; the (big, conscious) one intends to swallow the (tiny, unconscious) other.

To China, the war on the press front is but one of many at the "United Fronts" à la Comintern.

An average citizen has to work to earn a living and has a family to attend to, s/he has finite time and energy to commit to a fight for a fair press.

The Chinese government, including its massive military-run businesses, is ready anytime and is committed full-time to the fight (war).

Even if this were a press war within one single society, those who think that pure capitalism, i.e. the magic hand of free market, will sort things out eventually and will timely make a humanitarian society possible, are out-of-earth dreamers.

Even the most committed capitalist society by the name of USA needs some regulations to attempt to rectify the hand of free market.

Things don't look good for Taiwan, I'm afraid.

Readin said...

@Muo:
"The media ideally shouldn't be our enemy, but it's not our friend either and it never will be, no matter how properly regulated it is."

I think you have it backwards. The media is normally our friend when it is not regulated. Regulations change the enemy from a friend of the people to a friend of the government.

The reason the people of Taiwan can't view the media is a friend is not due to the free market, but instead due to the regulation of the media by the government of China. The regulation isn't direct, but instead it occurs through benefits and penalties the government hands to owners of the media when those owners attempt to work in China.

Readin said...

@SY You're making the same mistake Muo is when you say
"Even if this were a press war within one single society, those who think that pure capitalism, i.e. the magic hand of free market, will sort things out eventually and will timely make a humanitarian society possible, are out-of-earth dreamers.

Even the most committed capitalist society by the name of USA needs some regulations to attempt to rectify the hand of free market."

It isn't the free market that is the problem here. It is the government of China. I suppose if you view it entirely from the perspective of being within Taiwan that you could be tempted treat China as just another corporation or individual acting in the market, but the fact is the government China is not a corporation or an individual. A corporation or individual would have to play be market rules to make a profit and have enough money to buy up news organizations. The government of China simply takes whatever it wants from the labor of 1 billion people who, unlike regular employees, can't simply quit and go work for a better employer. The use of labor that has no choice thus removes the government of China from the concept of a "free" market. I.e. if the government of China is in the market (even through proxies) then it isn't a free market.

Regulations by Taiwan that would restrict the Chinese government's access to the market therefor should not be seen as "rectifying the hand of free market" but instead as "releasing the hand of the market to make it more free."

SY said...

To Readin:

You failed to understand the premise of "Even if this were a press war within one single society":

1. Under the premise above, a foreign government wouldn't be a player in the "single society," where the former is obviously not a member.

2. The word "were" in the premise was consciously used to separate the premise from the "life-on-earth" reality in which Chinese government is indeed a persistent player in the press (read: propaganda) war within Taiwan.

-----
As to your actual interest in debating "free market, I'll just say the following:

A. I have long lost interest in such a debate past my college time.

B. Capitalism or free market is not something that can be implemented or removed. It exists as the species survival fight in the nature. As a human being, my concern lies in how the human community can manage the free market so that a humanitarian society can be timely made possible.

Note my use of the word "timely" both here and also in my previous posting above.

C. Other than the English society as witnessed by Charles Dickens and Karl Marx (in the late phase of Industrial Revolution,) I cannot find any industrialized society that has not implemented some sort of measures to rectify the free hand of market in order to make a humanitarian society possible in a timely manner. Do you?

I'll stop here on the subject of "free market" and will not further respond on this particular subject.

Anonymous said...

@SY You're response seems to assume that I'm a free market absolutist. I'm not, some regulation is necessary (to allow formation of unions, to improve transparency, to prevent monopolies, to deal with the "tragedy of the commons" related to air, rivers, oceans etc. etc.)

However I do think we (at least in America) need far less regulation than we have and too often I see the "free market" being blamed for things that result from the unfree market.

When a financial collapse occurs in one of the most heavily regulated markets, it is inevitably blamed on the "free" market. When Medicare and Medicaid make up 35% of the health care payments in America yet the high health care costs are blamed on the "free" market. When government regulation pushes banks to make unsound loans based on criteria other than the ability to pay the loans back and then a lot of people can't pay back their loans it gets blamed on the "free" market.

I'm sick of the free market getting bad raps (especially when that bad rap leads to the perpetrator being given even more power - though I realize that's not what you were suggesting) so I like to correct it when I see it.

If you want to blame the free market for something, and in particular if you want to find something for governments to do that would help us rather than harm us, look at fishery depletion or river pollution or perhaps even global warming.

Readin said...

"Suddenly she looked at me crossly. "Hey!" she barked. "What kind of attitude is that?""

So was she upset that you were somehow making her less moral by causing her to borrow money without paying it back, or was she hitting on you and upset that you wouldn't give her your phone number?