Bloomberg
China pressures Alibaba to sell media assets, including SCMP
(Bloomberg) – The Chinese government wants Alibaba Group Holding Ltd. to sell some of its media assets, including the South China Morning Post, due to growing concerns about the technology giant’s influence on public opinion in the country, according to a person known to the subject. Beijing expressed concern about Alibaba’s media holdings during several meetings dating back to last year, the person said, asking not to be named because the discussions are private. Government officials are particularly upset about the company’s influence on social media in China and its role in an online scandal involving one of its executives. Jack Ma, co-founder of Alibaba, is at the center of a government crackdown that began last year, targeting the e-commerce giant and its financial affiliate Ant Group Co. The Wall Street Journal previously reported that the government of China is asking Alibaba to get rid of the media properties. Ma and Alibaba have quietly built a broad portfolio of media assets over the years, spanning BuzzFeed – online-style stores, newspapers, television production companies, social media and advertising assets. Alibaba has a large stake in Weibo and Youku, one of China’s largest streaming services, such as Twitter, as well as other online and print media, including SCMP, the leading English-language newspaper in Hong Kong. The discussion about selling the newspaper began last year, the person said. Although no specific buyer has been identified, it is expected to be a Chinese entity. “Be assured that Alibaba’s commitment to the SCMP remains unchanged and continues to support our mission and business objectives,” Gary Liu, executive director of the news company, told employees in an internal memo reviewed by Bloomberg News. Alibaba representatives in China and the USA did not respond to requests for comment. Bloomberg News reported in February that Beijing was alarmed by Alibaba’s media appearances after a scandal involving Jiang Fan, then the e-commerce company’s youngest partner. Posts about the scandal began to fade from social media, including Weibo, drawing the ire of government officials. China’s Internet watchdog has penalized the microblogging site for interfering with the spread of opinions. The scale and speed with which the site removed the posts irritated government officials, who saw it as a crusade, said a person familiar with the matter at the time. “The country must pay attention and suppress this, because of the power that capital can be used by us, but also by the enemy,” wrote Chinese commentator Song Qinghui, who contributes to editorials for publications, including state-supported media. Regulators were shocked at the extent of the company’s media interests after analyzing its holdings and asking it to come up with a plan to substantially reduce interests, the Journal reported, citing people familiar with the discussions. Beijing is concerned that Alibaba could use its media assets as a tool to control public opinion, creating a “vicious circle”, the person said. The company’s media has already influenced the public’s view of the emerging fintech industry, the person said. Weibo shares fell 2.4% in the North American market, while Alibaba’s shares in Hong Kong have changed little. Online media 36kr Holdings Inc. fell 1.5% in New York. The expansive influence of Alibaba-supported media services is seen as a serious challenge for the Chinese Communist Party and its powerful propaganda apparatus. Ma is revered in China as one of the most successful entrepreneurs. But his luck has dwindled since he spoke out against China’s regulatory approach to the financial sector. Read more about Ma’s expansive media appearances. These comments triggered an unprecedented regulatory offensive, including rushed plans for Ant’s $ 35 billion initial public offering and the opening of an antitrust investigation into Alibaba. Your participation in the media can be even more problematic. China’s campaign to curb the influence of its tech moguls expanded last week with fines against conglomerate Pony Ma, Tencent Holdings Ltd., Bloomberg reported. It is unclear whether Alibaba will need to sell all of its media assets, the newspaper reported. Any plan that Alibaba presents will need approval from China’s senior leadership, according to the newspaper. (Updates with the SCMP CEO comment in the sixth paragraph) For more articles like this, visit us at bloomberg.comSubscribe now to stay ahead with the most trusted source of business news. © 2021 Bloomberg LP