Rupert Murdoch’s News Corp is to sell control of its three Chinese television channels to a local state-controlled private equity fund in a recognition that its ambitious plan to build and control a broadcasting business in China has failed. 
 
 The sale is the most decisive step so far in what has been a gradual retreat by News Corp over the past four years from a media market where the government insists on maintaining tight controls. 
 
 China Media Capital, a fund backed by Shanghai Media Group and China Development Bank, both state-owned, has agreed to acquire a controlling stake in Xing Kong, Xing Kong International, Channel [V] Mainland China and its Fortune Start Chinese film library, News Corp and CMC said. 
 
 The sale comes a year after News Corp reorganised its pan-Asia Star TV business into separate Star India and Star Greater China units, and also ceded management of Star’s English-language content to Fox International Channels. 
 
 “They unemotionally realise that their media business there has the best opportunity to grow and profit in the control of local hands – from a regulatory and commercial perspective,” said Vivek Couto, executive director at Media Partners Asia. 
 
 An industry executive said: “James Murdoch [Mr Murdoch’s son] doesn’t believe that they can build a business in China – this is a clear sign that they aren’t interested in China any more, but they can’t say that.” 
 
 Analysts said CMC’s main interest was in gaining access to the overseas distribution channels that could help Chinese media groups internationalise. 
 
 Beijing is seeking to make its media industry more commercially viable while retaining political control by building select groups into companies that could project China’s voice outside of the country. 
 
 The deal with News Corp fits that policy, as it includes the Fortune library and its globally popular content, such as Jackie Chan movies and access to Xing Kong International which broadcasts in Hong Kong and Singapore. 
 
 The two companies did not announce financial details of the deal but executives said News Corp would hold on to close to 50 per cent of the assets. 
 
 The combined assets of the three channels and the film library are valued at $300m, making the deal worth about $160m, sources said. ||||| By Nick Clark 
 
 
 
 Rupert Murdoch has sold a majority stake in three of his Chinese TV channels to a private equity fund backed by the government in Beijing. 
 
 The decision marks a shift in News Corporation's strategy in the country and fuelled speculation yesterday that the media mogul could retreat from China, where his company has struggled to break through despite a long-standing commitment to the market. 
 
 News Corp announced yesterday that it had agreed to sell a controlling stake in the television assets to China Media Capital (CMC), the country's first buyout fund specifically focused on the media industry. The terms of the deal were not disclosed. 
 
 News Corp said it would retain "a significant stake" in the business but the company would not reveal how much. It added: "Both partners aim to develop the business by exploring new growth opportunities." 
 
 Mr Murdoch's decision to cede full control prompted speculation that News Corp has become frustrated with the control the Chinese authorities continue to exert on the country's media, despite encouraging commercialisation. There have also been suggestions that Mr Murdoch's son James, an increasingly powerful force within the company, is not convinced that News Corp's efforts in China will bear fruit in the near future. 
 
 However, insiders at the business rejected suggestions that the sale of the TV stakes signalled News Corp's retreat from China. Alongside the remaining holding in its Star TV business, News Corp also has a 17.6 per cent holding in Phoenix Satellite Television, which runs three channels, as well as the Chinese operations of subsidiaries Dow Jones and MySpace. One possibility is that partnering with local state-owned operators may accelerate its expansion. A source close to News Corp said the move would help "open up the region". 
 
 Jack Gao, the chief executive of Star China, will take over as head of the joint venture, which will be based in Beijing, and have offices in Shanghai, Hong Kong, Guangzhou and Chongqing. The company's entire staff of 70 is moving with him. 
 
 James Murdoch, who is chairman and chief executive of News Corp in Europe and Asia, said: "The agreement with CMC recognises the value we have created in Star China and enables us to continue to grow it for the future." 
 
 Rupert Murdoch bought Star TV in 1993 and has been forced to make a series of concessions to the Chinese government, including barring the BBC from his satellite platform broadcasting in the region. 
 
 The state has consistently turned down his requests to make and broadcast programmes in the country. 
 
 Mr Murdoch has recently expressed frustration about his operations in China. In October last year, he gave an address in the country calling for a more open media industry. 
 
 A year ago, he restructured News Corp's Asian business, getting rid of almost a third of the company's staff in Hong Kong to focus on the Indian market. At the time, 75 per cent of Star TV sales came from India. 
 
 Yesterday's deal will see CMC take control of News Corp's two general entertainment channels, Xing Kong and Xing Kong International, as well as Channel Mainland China, a music channel aimed at young people. The move also includes the Fortune Star Chinese movie library, which has a total of 757 Chinese-language titles. 
 
 Li Ruigang, chairman of CMC, said: "This is an extension of our long-term co-operation with News Corporation." ||||| EXCLUSIVE 9 AM, 4TH UPDATE 11 AM WRITETHRU (new details): News Corp Chairman/CEO Rupert Murdoch filed for divorce from wife Wendi Deng Murdoch this morning in New York State Supreme Court, Deadline learned at 9 AM. The divorce will not impact Rupert Murdoch’s mega-media holdings, according to insiders, and was deliberately announced for maximum transparency before News Corp spins off its publishing assets into a separately traded company by June 28th. (Murdoch will control both of these entities.) Wendi is perhaps most vividly and fondly remembered by the general public in July 2011 for standing up for her husband and clocking Jonathan May-Bowles after he threw a pie at Murdoch during his highly publicized British parliamentary testimony in connection with the News International phone-hacking scandal. (“Mr Murdoch, your wife has a very good left hook,” the chairman of the House Of Commons panel said admiringly. Wendi quickly earned the nickname of ‘Tiger Wife’ on Twitter.) Today’s divorce news comes despite numerous denials by PR man Steven Rubenstein and News Corp PR woman Julie Henderson to me as recently as April and May. (“We get this phone call once every 3-6 months,” Rubenstein and Henderson said at the time, pointing to the fact that Wendi and Rupert had recently hosted a dinner at their home for Oscar-winning Twentieth Century Fox director Ang Lee and were going away together on Spring Break.) But legal sources insisted to Deadline that the Murdochs’ divorce was being planned at the same time that a change in Wendi’s behavior towards Rupert was observed during the Academy Awards in February and after. ”She was snippy with him during Oscar weekend, and she’s really impatient with him these days,” a source told Deadline then. I received a call from an insider telling me, “Now I’m hearing it might be true. Call me,” On the heels of that, for the first time, not even Murdoch’s reps were denying yet another rift between Rupert and Wendi, saying to me there had been marriage trouble but stressing ”it feels like its past whatever that was.” A source who had dinner with them shortly after in NYC told me they were “fine. They’re two people who move a lot in different directions. I don’t know if it’s the marriage I’d want.” But another insider acknowledged to me, “I can’t say it might not be true that they’ll divorce. They have ups and downs. Right now it feels to me, having spent time with them, that they’re in a good place.” There is no question that despite divorce clouds Murdoch’s #1 priority was the News Corp split, not his from Wendi’s, and ”to get it done and get it done right. So he’s had a lot on his plate. What was once one is now two,” an insider explained to me at the time. “The company is so big, so diverse, so complex, and now he has to recalibrate and reaggregate these businesses while the Street determines their true value.” Today I’m told by insiders that, at that time, there were still no divorce proceedings underway so the denials were issued in good faith. “The divorce happened very quickly,” an insider told me today without details. 
 
 Media moguls routinely divorce, and Deadline doesn’t cover Hollywood’s personal lives, but this split is notable only because of its possible impact on the News Corp split or the Murdoch family succession vis a vis its corporate holdings given the patriarch’s age of 82. “I don’t see anything to indicate that shareholders have a lot at stake if Rupert and Wendi split,” one prominent media analyst tells me. “News Corp paid her $92,000 in 2010 to provide some ‘strategic advice’ regarding MySpace in China. But that’s not even pocket change, and ended three years ago, She’s not on the board, and not an executive. And since she and her kids don’t have voting rights in the family trust, she doesn’t have leverage to influence succession. I suppose that investors might become nervous if she decided to spill some News Corp secrets, or distracted Rupert so much that he’d spend less time taking care of business. But that’s thin gruel.” As for News Corp’s obligations to keep Wall Street and shareholders up to date on this kind of personal matter, “They have to report ‘material’ information on a timely basis. A lot of wiggle room there.” The analyst added: “So, yes, they make a judgment call — and hope they can justify it if the SEC raises a question – which it usually doesn’t. Sarbanes-Oxley sought to promote full and truthful disclosure of corporate financial information, and to minimize opportunities for insider trading. It requires companies to release certain kinds of data and information, with top execs confirming that they’ve reviewed the material and attest to its completeness and accuracy. But the effort to level the playing field has made many execs — and especially their press handlers — fearful that they’d violate the law if they share information casually or off the record with analysts and reporters, a once-common practice.” 
 
 The couple met in 1997, at a News Corp party in Hong Kong where she worked at Murdoch-owned Star Television. They married in 1999, less than a month after his divorce from ex-wife Anna Maria Torv Murdoch was finalized. Rupert and Wendi were married on his yacht in New York Harbor in June 1999 after Murdoch’s ex-wife, received $1.7 billion — $110 million in cash — in what was called the “most expensive” divorce settlement in history. Although at first they broke up amicably after 30 years together, Anna (who has since remarried) was determined to give Murdoch’s older children the right to approve any change in the family trust that controls News Corp, ensuring that they could not be pushed aside for any new children. As part of the divorce from Anna, Rupert agreed that his existing children would inherit control of News Corp via the family trust. Wendi wanted that changed after giving birth to their two daughters, Grace and Chloe. But Rupert punted, then actually startled Wendi by disclosing in a 2006 Charlie Rose TV interview that Deng’s girls would not have voting rights in his family trust. He said they’d have an equal economic stake, but the decision-making would be left to Prudence, Elisabeth, Lachlan and James. “The fight that happened between Rupert and Wendi, after the program aired, is News Corp legend,” Michael Wolff wrote in his book The Man Who Owns The News: Inside The Secret World Of Rupert Murdoch. 
 
 Since then, news reports noted that Wendi emerged with her own independent career and immersed herself in a social circle that includes David Geffen, Larry Ellison, Tony Blair, Nicole Kidman and Bono “one that is often free of her husband’s presence,” to quote The New York Times. She is co-founder and co-CEO of the film production company Big Feet Productions. With the wife of former MGM exec Harry Sloan, Wendi co-produced the 2011 film Snow Flower And The Secret Fan, which was released by News Corp’s Fox Searchlight. (It generated $11.3M in global ticket sales, including $1.3M from domestic theaters.) 
 
 The marriage is Rupert’s third, and Wendi’s second. The Wall Street Journal disclosed in a controversial front page article in 2000, before Murdoch bought it, that she met her first husband in 1988 when she moved to Los Angeles to learn English. She lived with Jake and Joyce Cherry, and broke up their marriage by having an affair with Jake. She married him in 1990, but they divorced after two years and seven months. “That was seven months longer than what was required for Deng to obtain a green card, allowing her permanently to live and work in the U.S. as a resident alien,” the paper noted. “Cherry says he and Deng actually lived together for ‘four to five months, at the most.’” 
 
 According to news reports, Deng was born in Shandong, China, in 1968 to engineer parents. She was named Wen Ge, which is shorthand for “Cultural Revolution”. Once in the United States, she studied at Cal State before receiving an MBA from Yale University. 
 
 Editor-in-Chief Nikki Finke - tip her here.
– Rupert Murdoch's News Corp. stepped up its retreat from China yesterday with the sale of a controlling interest in three TV channels to a government-backed fund. The company insists that it plans to maintain a strong presence in China but analysts believe the move signals that News Corp., frustrated by interference from Beijing, has finally given up on its hopes of building a broadcasting business in the country, the Independent reports. News Corp. Asia and Europe CEO James Murdoch, Rupert's son, "doesn’t believe that they can build a business in China," an industry executive tells the Financial Times. "This is a clear sign that they aren’t interested in China anymore, but they can’t say that.”