Monday, October 19, 2009

Caijing, Richard Li & China's Bloomberg In The Making

These sort of business drama was not supposed to happen in China, of all places. Caijing, the top business magazine in China saw a power tussle by the senior employees against the invisible "government controlled media forces". Richard li, spotting an opportunity in crisis, jumped in and probably hired the whole sheng group that wanted to leave.

Excerpts from SCMP & The Australian: Days after a much-trumpeted world media conference in Beijing's Great Hall of the People, a mass of resignations at the country's most influential business publication, Caijing, has underscored tensions between groundbreaking journalists and the country's fast-growing government-controlled media groups.

Caijing general manager Daphne Wu Chuanhui and eight of her nine business directors have resigned amid rumours that editor-in-chief Hu Shuli may leave to start her own magazine. It is believed that up to 60 other reporters are also poised to leave. Staff at the magazine said something had been brewing for a while, but last month Caijing went to pains to release a statement saying such rumours were false and threatening to take legal action against people spreading false rumours. Caijing's public relations chief has resigned. The company declined to make any further comment.

The trouble at the magazine is threatening a potentially lucrative joint venture with Hong Kong media and telecoms tycoon Richard Li, who is planning a Bloomberg-like financial news service for the Asian market using content from Caijing. The group recently hired a raft of native English speakers but a number were suddenly sacked in recent weeks without reason or warning.

The South China Morning Post reported that Ms Shuli was battling Wang Boming, the chief of SEEC Group, which owns Caijing and wants to become China's "Time Warner". It said the Caijing editor-in-chief was frustrated that most of the advertising revenue collected by the company was being taken back by the parent company, leaving the company with a smaller budget.

Caijing was founded in 1998 by editor-in-chief Hu Shuli and former Wall Street banker Wang Boming, Caijing has emerged as one of the most aggressive investigative media outlets in China. It has taken on corruption, environmental issues and the government, apparently with impunity, earning it a rock-solid reputation both inside the country and internationally. But last week, bubbling tensions at Caijing burst to the surface, with the resignation of about 70 staff from the business side of the magazine, prompting news stories around the globe. Hu and Wang's Hong Kong-listed SEEC Group, which controls the magazine, is locked in a battle over the publication's finances and editorial content. By yesterday there was talk that Hu would leave after the November 9 edition of the magazine, taking the bulk of the editorial staff to start a new publication.

Part of that battle is connected with the potential windfall from Li's ambitious project, if he can grab some market share from Bloomberg and succeed where others -- such as Dow Jones' ill-fated Telerate -- faltered. Provisionally called China in Depth, and registered as Cai Business Indepth Limited, the business will compete with Bloomberg and Thomson Reuters to deliver real-time data and analysis of banks, traders and other financial professionals using a subscription model that will be delivered via terminals, the internet and mobiles. The venture is scheduled for a soft launch at the end of the month with full services planned for January next year.

Li last year tapped the aristocratic James Ogilvy-Stuart, a 17-year Bloomberg veteran, and other former Bloomberg employees are said to have come on board. Li has also bolstered the venture with proven talent, no doubt lured by heavy pay packets, bonuses and equity stakes. He has attracted former Pacific Century Cyberworks (PCCW) property finance chief Patricia Leung back as chief financial officer as well as grabbing investment banker Jeffrey Yap as head of research and content management. Former New York Times and Wall Street Journal foreign correspondent Craig Smith is listed as executive editor and has publicly enthused about the new business. Li's loyal lieutenant Richard Chen, a former employee at his father's Hutchison group who is chairman of PCCW's Great China division, has been named as company chairman.

Ogilvy-Stuart is instituting a Bloomberg-like internal culture, where employees accept a rigid management style in return for relatively high pay. Also, in classic Bloomberg style, the venture is providing free food and beverages to employees (to encourage them not to go out for lunch) and a data terminal for employees to take home.

China's stockmarket is already one of the world's biggest, having passed Japan's in July, and is now valued at more than $3 trillion. It's also very volatile, and the country's financial markets are only at the beginning of their growth. Li is betting that deep analysis of these markets will be something that investors are willing to pay up big for.

p/s photos: Penny Tai Pei Ni

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