Alibaba was constructing a media empire. Now it is dumping Chinese language TV shares

By On Sep 24, 2021

By Laura He, CNN Business

Alibaba is shedding its stake in one of China’s largest television networks just months after the purchase as the company comes under increasing pressure from a government campaign to curb the power and influence of big tech.

Alibaba plans to sell its 5% stake in Mango Excellent Media, according to a statement from the media company on Thursday. It owns Mango TV, which is very popular in China for its variety shows. China’s second largest state property TV station Hunan Broadcasting System controls Mango with an interest of 56%.

The statement also said that Alibaba is seeking to waive an agreement not to sell the shares for a year. The e-commerce giant just bought it nine months ago for 6.2 billion yuan ($ 960 million).

Based on the Mango Excellent share price on Friday, Alibaba has already suffered a notional loss of approximately 2 billion yuan (US $ 320 million) on the investment.

The explanation did not provide any reason for Alibaba’s plans to leave Mango. Alibaba did not immediately respond to a request for comment.

The planned sale comes because Alibaba, founded by Jack Ma in 1999, is facing enormous political and regulatory pressure from Beijing, which has intensified crackdown on the Internet industry since the end of last year.

Beijing is increasingly concerned about the impact of large, private technology companies on the media, finance, data, and other sensitive sectors, and how they have become part of everyday life in China through news, digital payment apps, and other services.

While Alibaba’s main business is e-commerce, the company has expanded into a variety of industries over the years. It has built a large media empire that owns significant stakes in the country’s most popular social media or online video platforms such as Weibo, Youku, Bilibili, Xiaohongshu and Qutoutiao, as well as in the China Business Network, a state-run financial medium.

Alibaba also owns the South China Morning Post, Hong Kong’s leading English-language newspaper, the it was bought in 2015.

Earlier this year, the Wall Street Journal reported that Beijing had asked Alibaba to divest its media stocks as officials were concerned about its impact on public opinion.

Last November, regulators put a highly anticipated IPO of Alibaba’s financial subsidiary Ant Group on hold. In December, President Xi Jinping said that stricter anti-monopoly rules against Internet companies were one of his most important important targets for 2021. Days later, regulators announced an antitrust investigation into Alibaba.

In April, Alibaba was fined $ 2.8 billion by antitrust authorities. The Ant Group has also been downsized and ordered by banking regulators to overhaul its operations.

Ma – who left the company in 2019 – has largely stayed out of sight during all of this. He disappeared from the public eye for months before briefly appearing on a video earlier this year to speak to teachers at a philanthropic event.