When Li Ruigang met Hong Kong’s media in October 2016, the Chinese mogul had high hopes for the city’s dominant free-to-air broadcast network Television Broadcasts Limited (TVB). The half-century old network, which Li ultimately controls, has been the dominant force for Cantonese speakers all over the world since its hey day in the 1980s and keeps the largest catalogue of drama and films in the dialect.
Fast forward four and half years, and Li’s initial optimism is a distant memory. He said he is dissatisfied with TVB’s performance, so much so that it bore reiterating three times in 90 minutes. A “radical reform” is needed at the company, he said.
“Speaking as a director and the largest shareholder, TVB’s business conditions have been worrying,” Li said in an interview with South China Morning Post in Hong Kong. “From people’s mindset, the business system, its development strategy, content creation to facilities … from hardware to software, TVB is far behind the industry’s standards.”
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TVB has been suffering from plummeting advertising revenues in recent years, plagued by the social unrest movement and the Covid-19 pandemic. Advertising revenue from Hong Kong TV broadcasting plunged by 54 per cent to HK$881 million last year, even though business improved in the second half. Net loss was HK$281 million, compared with a net loss of HK$295 million in 2019.
Li, through his Shanghai-based media conglomerate CMC Inc, has an indirect share in TVB after his company bought an undisclosed stake in the broadcaster’s largest shareholder, Young Lion Holdings, in April 2015.
Click to read more about Li’s plans for more than US$10 billion of assets under his flagship and private-equity fund.
Li founded CMC in 2015, a conglomerate known for multi genre content, including film, drama, games, financial media, music and sports. Tencent Holdings and this newspaper’s owner Alibaba Group Holding participated in a 10 billion yuan (US$1.5 billion) A-round financing, becoming minority shareholders in the conglomerate.
“In mainland China, the entertainment and media industry have undergone a tremendous change, from broadcasting to increasingly media interactions via social media platforms, fuelled by artificial intelligence and technology,” said Li. “TVB did not make any progress.”
Li has a reason to worry. TVB’s share price, which closed at HK$8.3 per share on April 1, fell more than 80 per cent in the past six years.
“Did we lose money in the investment in TVB? We are definitely losing money,” said Li, citing external threats and internal challenges as reasons.
Li said TVB’s frontline reporters were attacked during the social unrest of 2019. Even so, the news department did a good job under duress, Li added, calling its news coverage “fair and balanced.”
Since the protests, the company’s advertisers have been targeted by online threats.
“Our advertisers are being threatened by online comments. If you are not satisfied with TVB, you can express your views, but you cannot threaten our advertisers asking them not to place advertisements. I hope the authorities in Hong Kong can take some action,” said Li.
“Some local or multinational advertisers used to give us more than HK$10 million advertising fees a year, now it is down to zero.”
TVB has been reporting the threatening online chatter to the police, according to a TVB spokesperson.
But despite these enormous external headwinds, internal factors are the real challenge, said Li.
In 2018, under the management of former chairman Charles Chan Kwok-keung, TVB invested in two bonds issued by Chinese theatre operator SMI Holdings Group. The bonds ended in default, forcing TVB to make a HK$500 million write-off that pushed it into a loss that year of HK$199 million, its first financial loss in a decade.
Chan stepped down from the post of chairman in February last year. Two months later, Thomas Hui To, the chief operating officer of CMC, was named non-executive chairman of TVB. It was seen as the beginning of the reform of the broadcaster.
Li said TVB had operated like a closed platform for a small group of people in the past few years. “As a free broadcaster, TVB should be a public open platform welcoming other players in the media and entertainment industry to participate”, said Li.
It should change the content and programs to appeal to a younger audience that is increasingly turning to global streaming services, he said.
Li has expressed his views to the board of directors to seek their consensus, and urged management to kickstart the reform process.
Allan Zeman, chairman of Lan Kwai Fong Group and an independent director at TVB, agrees that the broadcaster needs a “total makeover”.
“TVB was a star among media companies in Hong Kong”, said Zeman. “But it came to a standstill when the media industry was changing with technology and social media.”
Once a force to be reckoned with in the industry, churning out TV classics such as The Bund, Police Cadet, The Greed of Man, All the Threshold of an Era, and War and Beauty, TVB has lost much of its former cultural influence.
“Ruigang is a media king in the mainland,” said Zeman, who expects Li to turn TVB profitable by expanding to serve the Greater Bay Area. The region comprises Hong Kong, Macau and nine cities in Guangdong province, and has a population of more than 70 million people who mainly speak Cantonese.
Under the broadcasting ordinance in Hong Kong, non-permanent residents cannot apply for a free TV or pay TV licence, and are branded “disqualified persons”. The ordinance also has a provision which requires the aggregate voting control exercised by a non-resident company holding a domestic television programme licence to scale back to no more than 49 per cent, even if the company’s interest in the broadcaster exceeds that level.
“We respect the ordinance. In the past five years, CMC was a passive investor. [But] if TVB does not reform now, it will shrink, then perish. I am now trying to bring it out from drowning,” said Li.
In January TVB made Eric Tsang, 67, deputy general manager and special adviser to its executive committee, and Wong Cho-lam, 41, was appointed chief creative officer to assist Tsang in developing variety and “infotainment” content.
“Tsang and Wong’s vision and horizons are wide open after working in the mainland market in the past. They can enhance content creation for TVB ,” Li said.
He foresees resistance to the reforms. “For those who do not want to change, they are free to go,” he said.
Despite his dissatisfaction, Li said CMC will hold TVB as a long-term investment, and will fend off any rivals who want to take control of the broadcaster.
Looking ahead, Li said, “At least [TVB] should be a regional broadcaster and has multi-language potential including English, Mandarin and others.”
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This article ‘I’m very dissatisfied with TVB’s performance,’ says Chinese media tycoon Li Ruigang first appeared on South China Morning Post