Alibaba Group Holding Ltd (阿里巴巴), the e-commerce giant headed by billionaire Jack Ma (馬雲), has agreed to buy Hong Kong’s South China Morning Post and other affiliated media assets as the Internet tycoon follows in the footsteps of Jeff Bezos in pursuing the revival of a century-old newspaper.
Though financial terms were not disclosed, Alibaba said in a statement yesterday that the purchase would include the flagship newspaper and other related businesses.
The Chinese company also said it would scrap the publication’s Internet pay wall and that editorial decisions would be made “in the newsroom, not in the corporate boardroom.”
The South China Morning Post, once the envy of the industry in terms of profitability, has in recent years joined other mastheads in struggling to attract advertisers amid the rise of free publications online. Control of the territory’s premier English-language broadsheet has been unchanged since media magnate Rupert Murdoch sold most of his stake to Malaysian billionaire Robert Kuok (郭鶴年) in 1993.
“Jack Ma is such an innovative and visionary figure that the future of the South China Morning Post under his control may actually be somewhat brighter,” said Peter Schloss, managing partner of CastleHill Partners LLC, a Beijing-based advisory and investment company. “Robert Kuok has lost interest in it. Jack would come in and invigorate it to move it firmly in the digital space.”
The sale gives the 112-year-old Hong Kong newspaper an owner armed with more than 100 billion yuan (US$15.5 billion) in cash and investments. SCMP Group, the paper’s listed parent, has seen three years of profit declines and had it not been for some extraordinary gains its latest semiannual profit would have slid more than 40 percent.
Alibaba is taking on the media business, which includes the newspaper and magazine publishing operations that generate more than 90 percent of SCMP Group’s revenue and about 65 percent of its adjusted operating profits.
Besides newspapers and magazines, SCMP Group also has a business segment that leases out various real-estate properties.
However, given the newspaper’s influence, the deal might have implications beyond just profits and sales.
“Jack Ma would view an acquisition of the South China Morning Post as a national service,” Schloss said. “He’d be doing the central government a favor by ensuring that the South China Morning Post is in friendly hands.”
SCMP Group has been suspended from trading since February 2013 after the company failed to have at least 25 percent of shares held by minority investors, the minimum proportion required for a company to trade its shares in Hong Kong.
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