One Billion Customers - James McGregor [106]
As they negotiated, Murdoch met his match. Liu wasn’t going to give any ground on control issues and Chinese officials backed him. In the end, he convinced Murdoch to throw his Chinese-language STAR movies and STAR Chinese channels into the joint venture at zero valuation. After that, they each invested equally. The partnership breakdown was 45 percent for Murdoch, 45 percent for Liu, and 10 percent for a CCTV company in Hong Kong. When Phoenix was listed on the GEM stock market in Hong Kong in 2000, the CCTV shares were taken over by the Bank of China and 15 percent of the company’s equity was floated on the market.
Launching Phoenix took enormous energy and drew heavily on Liu’s network of contacts. He courted the Information Office relentlessly, pitching the same argument to anyone who would listen. A joint-venture satellite television station between him and Murdoch would serve two purposes: he would control Murdoch in China while using Murdoch’s global reach to place Phoenix on cable systems in the United States, Europe, and Asia. Liu promised that Phoenix would be a dependable and responsible “voice of China” to the outside world. In exchange, the authorities would ignore Phoenix’s “gray market” distribution in China.
Liu also took pains to reassure the state-owned CCTV that he wouldn’t be so much a competitor as a source of new programming. He worked his ties with the bored, discouraged editors and producers at CCTV, promising them lucrative coproduction deals and lots of foreign travel.
The Phoenix Rises
The Phoenix Chinese Channel, with its flashy graphics and fast-paced Fox-style format, burst onto the staid Chinese television scene in March 1996 with an amalgam of programming from the STAR TV Chinese and movie channels. While Phoenix didn’t have legal permission to be seen by Chinese viewers, the channel was widely available in cities and even in country villages where illegal satellite dishes were proliferating. CCTV and stations in the Chinese provinces immediately copied the Phoenix shows and broadcast style.
But Liu stayed at least one step ahead. As Chinese leaders traveled overseas, Phoenix covered their speeches live and reported on the surrounding color of their journeys, something that was unheard of in Chinese television, which usually showed footage of handshakes while an anchor read dull dispatches written by the foreign ministry. Liu guessed, rightly, that Chinese leaders would be flattered by the coverage. Phoenix began getting calls from party officials requesting tapes of the coverage.
Phoenix’s big break came on March 19, 1998, when Phoenix broadcast live the annual press conference held by Chinese leaders at the end of the National People’s Congress session. Newly appointed Premier Zhu Rongji was taking questions from foreign and local reporters. He interrupted the moderator and told him to call on Phoenix correspondent Sally Wu, a Taiwanese, “because I really enjoy watching her show.” Sally Wu became an instant celebrity, and Phoenix had an unofficial seal of approval from the man who was now running the Chinese government. Sitting in his Hong Kong office watching the news conference, Liu broke into tears. Zhu was acknowledging that the members of the Chinese leadership were avid watchers of Phoenix because it was so much more informative than their own propaganda organs. Wu’s twenty-minute news show had been an experiment. With Zhu’s comments, Liu now felt safe to expand the Phoenix news output to several hours a day and Sally Wu got her own weekly special.
Later that year, Liu followed through with his initial promise to propaganda officials by launching the Phoenix Chinese News and Entertainment Channel