In a letter addressed to SCMP readers, penned by Joseph Tsai, Executive Vice Chairman of the Alibaba Group, the company sought to answer questions on why the e-commerce company is buying into traditional media which many consider as a sunset industry.
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The deal’s billed as combining Alibab’s online expertise with the Post’s editorial chops.
Alibaba said the Chinese government had not role in the deal to buy The South China Morning Post. “The simple answer is that we don’t see it that way”, Alibaba Executive Vice Chairman Joe Tsai mentioned in a statement, as he outlined a lofty vision of marrying Alibaba’s experience in technology with the Post’s journalism track record to create a China-focused media giant with an global audience. The company said its vision is to grow SCMP’s readership globally.
Readers value the Post because its Hong Kong location makes it possible to be more critical of Beijing than is possible for outlets in mainland China. “It is through the lens that China is a communist state and everything kind of follows from that”, Tsai said, adding that a lot of journalists working with these western media organisations “may not agree with the system of governance in China and that taints their view of coverage”.
Other assets included in the acquisition are SCMP’s magazine, recruitment, outdoor media, events and conferences, education and digital media businesses. Ma denied at the time that he had made such an assertion.
The acquisition represents a relatively minor investment on the part of Alibaba, with SCMP valued at an estimated US$100 million, a drop in the ocean compared with Alibaba’s multi-billion yearly revenue.
The SCMP is even cheaper when put side by side with more recent deals.
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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The acquisition also includes a portfolio of magazine titles, including the Hong Kong editions of Esquire, Elle, Cosmopolitan, The PEAK and Harper’s Bazaar. It also has a stake in the Bangkok Post newspaper. Jack Ma, the founder of the $210-billion Chinese e-commerce behemoth, is following in the footsteps of countless tycoons – including previous SCMP owners Robert Kuok and Rupert Murdoch – seeking to wield influence in the press.
