SMG Splits Broadcast and Production Entities for SARFT Reforms

<- October 21, 2009 ->

21st Century Business Herald, 10/21/09

Chinese media provider Shanghai Media Group (SMG) has announced that, in accordance with broadcast industry restructuring plans laid out by China's State Administration of Radio, Film and Television (SARFT), SMG will split into two entities: Shanghai Radio & TV and Shanghai Oriental Media Group.

Shanghai Radio & TV will retain SMG's current operations structure, and be managed by the Shanghai Municipal Administration of Culture, Radio, Film & TV under the guidance of the CPC Shanghai Municipal Committee's Propaganda Department. SMG's current broadcast assets and departments involved in "news production," including its program editing committee, station editor's office, broadcast frequencies, television channels, central broadcast control room, television news center, and broadcast news center, will become part of the station.

The newly established Shanghai Oriental Media Group will be a separate legal entity, with its shares held by Shanghai Radio & TV. The new company will continue to use the English acronym SMG, and will take control of all of SMG's non-news production related assets, including China Business News and related products, and management of Channel Young's Enjoyoung Media Group. In the future, public investors will have the opportunity to invest in the Group, though it will still be held by the Shanghai Radio & TV.

At the end of June, SMG and Japan's Softbank signed a "strategic partnership agreement." SMG has said that this agreement covered only digital media copyrights and overseas distribution, and did not involve actual material or stock transfer. However, some industry insiders believe that it could have been a step in preparation for such deals.

SMG's restructuring has met with approval from SARFT, which has been pushing for a nationwide separation of production and broadcasting industries. Hunan's Golden Eagle Broadcasting System, CCTV-2, CCTV-5, and Beijing TV are all slated to be reorganized as the industry reform proceeds.

Editor's Note: For more background information on SMG and Softbank, please see "SMG Signs Cooperation Agreement with Japan's Softbank" MD 6/30/09 issue.

Keywords: corporate restructuring, Shanghai Media Group, restructuring, television, SARFT, Softbank, broadcasting, SMACRFT, Publicity Department

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