Alibaba Buying South China Morning Post, Aiming to Influence Media


The South China Morning Post is Hong Kong’s leading English language newspaper.

Vincent Yu/Associated Press

The Alibaba Group, the Chinese Internet giant, is making an ambitious play to reshape media coverage of its home country, taking aim at what company executives call the “negative” portrayal of China in the Western media.

As the backbone of this effort, Alibaba agreed on Friday to buy the media assets of the SCMP Group, including one of Hong Kong’s most influential English language daily newspapers, The South China Morning Post. The company is acquiring an award-winning newspaper that for decades has reported aggressively on subjects that China’s state-run media outlets are forbidden to cover, like political scandals and human-rights cases.

Alibaba said the deal was fueled by a desire to improve China’s image and offer an alternative to the biased lens of Western news media outlets. While Alibaba said the Chinese government had no role in its deal to buy the Hong Kong newspaper, the company’s position aligns closely with that of the Communist Party, which has grown increasingly critical of the way Western news organizations cover China.

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When The South China Morning Post Waded Into Controversy

Although some critics say it has turned increasingly pro-Beijing in recent years, The South China Morning Post has taken aim at controversial topics in China in recent years.

Such biases, the company said, influence how investors and others outside China regard Alibaba. The company said its shares, which are listed in New York, were being affected by all the negative reports about China.

“Our business is so rooted in China, and touches so many aspects of the Chinese economy, that when people don’t really understand China and have the wrong perception of China, they also have a lot of misconceptions about Alibaba,” Joseph C. Tsai, Alibaba’s executive vice chairman, said in an interview.

“What’s good for China is also good for Alibaba,” Mr. Tsai added. He echoed a phrase often attributed to the former head of General Motors: What’s good for G.M. is good for America.

For Alibaba, the financial stakes are not significant. Estimated to be worth $100 million, the deal represents a relatively small amount for a company with more than $12 billion in annual revenue.

The bigger risk is reputational, as Alibaba leaps into the realm of politics. In owning The South China Morning Post, Alibaba will control a news organization that operates along a border that separates two systems, one in Hong Kong with a relatively free press and another in mainland China with strict censorship controls.

As speculation of a deal began swirling in recent weeks, some critics in Hong Kong had already started to worry about whether Alibaba was seeking to tame the paper’s coverage in order to curry favor with the Chinese leadership.

The newspaper, which is not subject to China’s strict censorship rules, has long jumped into controversial issues on the mainland like the anniversary of 1989 pro-democracy protests in the Tiananmen Square and last year’s Occupy Central movement in Hong Kong. The newspaper has delved into scandals among China’s elite, including Ling Jihua, who served as an aide to the former Chinese president Hu Jintao.

Willy Lam, a political commentator and former editor at the South China Morning Post, said an Alibaba takeover would likely exacerbate a trend at the paper toward self-censorship on sensitive political issues.

Alibaba, however, said it had no intention of interfering with the day-to-day operations of the paper and would not censor articles. The company said it would ensure the paper’s journalistic independence and integrity.

“We’ll operate on principles,” said Mr. Tsai of Alibaba. “We’ll let the editors make their judgment on what to publish and not to publish. I can’t think of anything being off-limits.”

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But Mr. Tsai did not offer details about how Alibaba would execute its vision for more positive coverage on China without sacrificing editorial independence, two agendas that are seemingly at odds. He said that more “fair and accurate” articles would translate, over time, into a more positive image of the country.

With a print circulation of 100,000, The South China Morning Post is relatively small. But the newspaper, which is 112 years old, has outsize influence in the West because of its proximity to China and its English language format.

Since 1993, the SCMP Group has been controlled by the family of the Malaysian tycoon Robert Kuok, who has extensive business interests in China through its control of the Kerry Group. The South China Morning Post was once controlled by Rupert Murdoch’s News Corporation.

In addition to The South China Morning Post, Alibaba is also buying the SCMP Group’s other media assets, including a portfolio of fashion, travel and lifestyle publications. (Starting in February, copies of The International New York Times for Hong Kong and China will be printed by The South China Morning Post.)

But the SCMP Group, like many media operations around the world, is facing financial pressure. The newspaper’s print circulation has dipped, and its profit growth has been lackluster.

Alibaba said it planned to invest in the business, by expanding the staff and developing more digital ventures. The company is also looking to remove the website’s paywall, granting free access to its content.

Alibaba shares were 4.9 percent lower in afternoon trading on Wall Street Friday.

Some free press advocates worry that a mainland entrepreneur could face intense pressure from the Chinese government to restrict news coverage or to follow directives of the propaganda arm of the Communist Party. In recent years, there have been growing concerns in Hong Kong that the Chinese government has asked entrepreneurs and advertisers to withdraw support of any publication that is deemed to be hostile to the Communist Party.

“Alibaba and Jack Ma have done a good job” in “maintaining good relations with the power structure and not getting involved in politics,” said Orville Schell, the former dean of the journalism school at the University of California, Berkeley, and a director at the Asia Society.

“But buying a newspaper, particularly in Hong Kong, could be hazardous,” he said, adding, “China is always tempted when things go wrong to take control.”


Jack Ma, Alibaba’s executive chairman.

Christophe Petit Tesson/European Pressphoto Agency

Alibaba’s move reflects a broader evolution in China, as some of the country’s biggest companies look to project a different image to the world.

A number of Chinese companies have been making investments in overseas media, film studios and sports broadcasting rights. For instance, the Wanda Group, a company led by the billionaire Wang Jianlin, now controls AMC Entertainment, one of the biggest cinema chains in the United States.

The SCMP deal builds on the enormous ambitions of Alibaba’s executive chairman, Jack Ma, who co-founded the company in 1999 and built it into an e-commerce goliath that is now valued at more than $200 billion.

In recent years, the company has expanded into finance, film, online video and social media. The company has also acquired stakes in several domestic media properties, including China Business News. Alibaba also recently completed a deal to fully acquire the online video site (Meanwhile, Yahoo, the Amercan online media company, owns a 15 percent stake in Alibaba.)

Behind the scenes, Eric X. Li, the prominent Shanghai-based venture capitalist who was an early investor in Youku, helped advise Alibaba on its acquisition of SCMP Group’s media assets. Mr. Li has gained notoriety in recent years as a political commentator known for aggressively critiquing American-style democracy and extolling the virtues of the Communist Party, like China’s meritocratic leadership system.

“China’s re-emergence is perhaps the most consequential development for the world in the 21st century,” Mr. Li said in an interview. “Media coverage of China in the West has been too ideological and biased.”

He said Alibaba’s ownership would “give the paper a unique and powerful vantage point to offer global readers a more pluralistic and realistic view of China.”

Big Chinese companies have been investing in media properties at a time when the country’s authorities have been exerting greater control over the state-run news and social networking sites, as well as blocking access to overseas sites like Google and Facebook. The websites of several major news organizations, including The New York Times, have been blocked in China, amid government criticism that the Western media portrays the country in a negative and unfair way.

In an interview, Alibaba’s executive vice chairman, Mr. Tsai, tempered his critique, saying the Western media has done some outstanding reporting in China in recent years. But he and others at Alibaba felt many outlets have placed undue emphasis on government incompetence and negative portrayals of China’s development.

He said Alibaba wanted to deepen the world’s understanding of China, by turning The South China Morning Post into a global platform for news about China.

“There’s very little downside. Even if we lose money it won’t be material,” Mr. Tsai said. “But the upside is quite interesting.”

Correction: December 11, 2015
An earlier version of this article misstated the age of The South China Morning Post. The newspaper, founded in 1903, is 112 years old, not 113.

Correction: December 11, 2015
A earlier picture caption accompanying this article misstated Jack Ma’s title at Alibaba Group. He is executive chairman, not chief executive.

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