Shandong TV operator set for pioneering IPO

A Chinese television channel operator in the province of Shandong is preparing a landmark initial public offering in a trial opening for new levels of private and foreign involvement in the fast-growing television sector.

The planned domestic listing by Shandong TV-net Media Development is the first approved by media regulators for a venture directly operating television channels, a business traditionally tightly controlled by the state.

The move to allow television channel operators to offer shares is part of a broad drive to open China's media to private and foreign capital and expertise, a policy intended to transform the industry from an arm of the state into an engine of economic growth.

China recently released regulations allowing foreign companies to invest in television programme production joint ventures. State broadcasters have also been told they can spin off non-core operations such as advertising and programme trading.

However, the Shandong TV-net listing, if judged successful, would permit private and foreign investors also to take minority stakes in companies that directly manage television channels.

Beijing is determined to retain control of what viewers in China see on television, and channels offering news and current affairs remain strictly off-limits to foreign and private investment.

Shandong TV-net has the right to run three local channels' scheduling, purchasing, production and advertising. Legal ownership of the channels and responsibility for approving content remains with its parent, the state-run provincial broadcaster.

ˇ°We have a saying for this in China: separating the state ownership rights from the operating rights,ˇ± said Zhu Hong of China's State Administration of Radio, Film and Television (Sarft).

Sarft also is moving to allow companies such as Shandong TV-net to issue shares both in China and abroad. ˇ°We now say clearly that they can list at home or overseas. Now we are currently preparing to choose some relatively good cultural enterprises to list overseas as test cases,ˇ± Mr Zhu said.

Shandong TV-net declined to comment on the timing of its IPO, saying it was still applying for approval from securities regulators.

The company, set up in 1999 as the online arm of the provincial broadcaster, operates channels offering light entertainment, lifestyle programmes and films. China is also proceeding with plans to list units spun off by state broadcasters. The China Radio, Film & Television Programmes Exchanging Centre, a content trading unit of China Central Television, has drawn up plans for a possible IPO.