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Japan's media takeover war
By
Suvendrini Kakuchi
TOKYO - The typical
reaction when something jolts staid and homogenous
Japan is to blame it on the insensitive foreigner.
But the ongoing saga out played between a new
Japanese Internet business and two
well-established broadcasting companies is
different.
At the center stage is
Livedoor, the fastest-growing web portal in Japan
with 10.6 million users, which plans to use its
50% stake in Tokyo-based Nippon Broadcasting
System Inc to acquire Fuji TV - Japan's biggest
media group. Livedoor intends to build a colossal
entertainment and information network that spans
the Internet and broadcasting media.
"Perhaps the best story among the many
issues involved in the fight by newcomer Livedoor
to acquire the stakes of Fuji television is that
we see a young Japanese businessman spearheading
it all," said Yasuo Kurata, an international
relations expert and a veteran journalist. And
indeed, Japan is agog at the merciless fight led
by Takafumi Horie, 32, president of Livedoor.
Livedoor had 49.8% of Nippon
Broadcasting's voting rights as of March 15,
giving it potential influence over Fuji TV through
the company's stake in the television company.
More than 50% is required to be able to make key
decisions such as appoint directors to the board.
Nippon Broadcasting is listed as Fuji TV's largest
shareholder with a 22.5% stake.
Horie won
a key legal victory last week when the High Court
blocked Nippon Broadcasting's plans to issue
massive amounts of new shares to Fuji TV that was
desperately trying to stop Livedoor from gaining
control. Previously, unthinkable to close-knit
Japanese management practices, Horie had used a
loophole in security regulations to buy over 50%
of Nippon Broadcasting shares in off-hours trading
without the knowledge of the media company.
"Horie has shaken deep-rooted Japanese
management policies that rely on cozy personal
relations rather than transparent shareholder
debate," pointed out Professor Takaaki Hattori,
who teaches media law at Rikkyo University. For
many, the no-holds-bared battle for ownership of
an established company by a newcomer who has only
recently created a name for himself, mainly by
displaying an awesome talent for buying and
selling companies rather than journalistic skills,
is symbolic of the much-needed reform in Japan for
takeovers and mergers of media companies.
Hattori said Horie has ushered in an acid
test on Japan's ability and determination to
foster changes in Japanese practices that prefer
to sweep problems under the carpet. "It is the
public and no one else that should be able to
decide whether they prefer digital Internet
broadcasting, that Horie plans to establish, or
conventional radio and television programs," he
said.
Hattori was scathing of the Japanese
people's approach to media companies. "For too
long they have allowed these companies' top-heavy
management to dictate what people can view and
read. These media companies have just bulldozed
through everything," he added.
Japanese
editorials on Horie have been overwhelming bitter.
Horie, who has been branded as a "newcomer" and
"maverick" by commentators in the Yomiuri group -
Japan's largest newspaper chain - hinted darkly on
February 25 that "Livedoor's buyout attempt is not
a mere issue of share trading - it involves the
issues of freedom of speech and expression."
Early this week, the Daily Yomiuri said
Horie was ignorant of the role of journalists. It
quoted him as saying: "Journalism, which was
needed when there was no Internet, is no longer
necessary ... The media are merely conduits. The
best thing for the media to do is to transmit
information as it is."
Japan's racy
tabloid weeklies have also gone to town on Horie
revealing how he dropped out of the prestigious
Tokyo University to start Livedoor, and even
appeared without socks in a primetime news show -
all trademarks of Japan's shinjin rui, or
new generation, which pays more attention to
personal fortune than the famed Japanese values of
loyalty and human relationships. Media reports
have painstakingly chronicled how Horie made his
fortune trading in companies he made profitable by
firing staff and wiping out redundant departments.
Even the Japanese government has jumped on
the bandwagon. Last Friday, it delayed passing a
law that would ease restrictions on foreign
involvement in the takeover of Japanese companies.
But Horie's ratings among the younger generation
remain high. Some 80% of them in a recent poll
gave him the thumbs up. "Horie is the long-needed
wake-up call for Japan," said Ken Ishiyama, 43,
who runs his own translation company. "I like him
because he is challenging vested interests. But at
the same time, I guess I would not feel secure
working for such a person."
(Inter Press
Service) |
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