22 October 2018
Jack Ma's acquisition of the SCMP is being compared to the purchase by founder Jeff Bezos of the Washington Post. Photo: Bloomberg
Jack Ma's acquisition of the SCMP is being compared to the purchase by founder Jeff Bezos of the Washington Post. Photo: Bloomberg

HK$2 bln Alibaba deal to buy SCMP seen as ‘national service’

Alibaba Group Holding Ltd.’s deal to buy the South China Morning Post is being seen as both a business decision and a political one.

The e-commerce giant chaired by billionaire Jack Ma Yun has been busy buying media assets in mainland China, including video service Youku Tudou Inc. last month.

Adding to his portfolio the influential English-language newspaper in Hong Kong, “Jack Ma would view an acquisition of the South China Morning Post as a national service,” Bloomberg quoted Peter Schloss, managing partner of CastleHill Partners, a Beijing-based advisory and investment firm, as saying.

“He’d be doing the central government a favor by ensuring that the South China Morning Post is in friendly hands.”

The HK$2.06 billion (US$266 million) deal includes the century-old newspaper, outdoor advertising, digital assets and magazines, SCMP Group Ltd. (00583.HK) said in a filing Monday.

Alibaba said in a statement Friday that the purchase will include the flagship newspaper and related businesses, including the Hong Kong editions of Esquire, Elle and other magazines.

The internet giant also said it will scrap the SCMP’s online pay wall and that editorial decisions will be made “in the newsroom, not in the corporate boardroom”.

The SCMP, once the world’s most profitable newspaper, has in recent years joined other print publications in struggling to attract advertisers amid the rise of free information online.

Control of the paper has remained unchanged since media magnate Rupert Murdoch sold most of his stake to Malaysian billionaire Robert Kuok Hock Nien 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,” Schloss said.

“Robert Kuok has lost interest in it. Jack would come in and invigorate it to move it firmly in the digital space.”

For Alibaba, the purchase of the publication would raise the profile of its growing media empire.

In June, Alibaba announced the purchase of a stake in China Business Network, one of the country’s most influential business media firms.

Alibaba’s purchase of the SCMP gives the 112-year-old newspaper an owner armed with more than 100 billion yuan (US$15.5 billion) in cash and investments.

SCMP Group has experienced three years of profit declines.

Had it not been for some extraordinary gains, its latest semiannual profit would have plunged more than 40 percent.

The newspaper and magazine publishing operations generate more than 90 percent of the group’s revenue and about 65 percent of adjusted operating profits.

The group also has a business segment that leases out various real estate properties.

SCMP Group has been suspended from trading since February 2013 because less than 25 percent of its shares are held by minority investors.

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