MEDIA: Rupert Murdoch Tip-Toes Back To China With Theme Park, Retail Plans

By newsdoug on May 25, 2015

Bottom line: Rupert Murdoch’s shift in China strategy towards less controversial retail and entertainment projects looks smart, but is likely to meet with lukewarm success due to lack of awareness of 20th Century Fox among Chinese consumers.

Rupert Murdoch just can’t seem to ignore the China story for too long, with new reports saying his Twenty-First Century Fox (Nasdaq: FOX) is finalizing plans for a theme park in a country that has been quite elusive for the aging media mogul. The theme park approach certainly looks safer than Murdoch’s previous attempts to enter China with more traditional media like TV and movies, and mirrors what some of the world’s other top media companies have done. Of course that means Murdoch and Fox are coming a bit late to this particular show, and the fact that 20th Century Fox theme parks aren’t exactly a well-known brand means his media empire could face a steep uphill ride finding a Chinese audience.

Word of the theme park plan comes in a local media report, which cites Jeffrey Godsick, president of the consumer products division for Fox’s main filmed entertainment arm. (English article) Godsick says Fox is still deciding on a location for the park, and is talking with several provincial governments. He adds a final decision is likely to come within months, including a formal announcement. He also disclosed that Fox plans to open 50 retail stores in China by the end of next year, selling products featuring some of its popular figures from movies and TV series like “The Simpsons”.

I’m quite a theme park junkie, and have to admit that I’d never even heard of 20th Century Fox theme parks before reading about this new China plan. A quick online search shows why, as no such parks currently exist. Fox announced its first plans to build such a park, to be called 20th Century Fox World, less than 2 years ago, and is now building the first location in Malaysia.

That 25 acre park will include the usual mix of Fox-themed rides and other attractions, and is set to open next year. The company has also announced plans for another park in South Korea, meaning this new China plan would indicate that Murdoch is placing big bets on Asia for this newest element of his business.

Fox is a bit late to the theme park race into China, as both Disney (NYSE: DIS) and Universal are in the process of building their own parks in the country. The more advanced of those is Shanghai Disneyland, which is set to open early next year and has generated huge hype and anticipation thanks to Disney’s strong local name recognition. Universal also finally got the nod to build one of its signature Universal Studios theme parks in Beijing last year, after several previous failed attempts.

Murdoch has had a difficult time in China, a market he once held out huge hopes for. He had acquired a number of China-based assets, including a TV station and a stake in Phoenix Satellite Television (HKEx: 2008), one of the nation’s leading independent news broadcasters as part of his ambitious plans. But none of those deals ever gained any traction, partly due to China’s strict control over the media market, and Fox ultimately sold off most of its assets and became a non-player. Murdoch’s withdrawal seemed to culminate with his divorce 2 years ago from Wendi Deng, a China native who originally worked at his Hong Kong-based operation.

But China is a market that’s hard to ignore due to its huge size, and earlier this year Murdoch was back in the country on a low-key trip to the offices of China Broadband Capital, a leading semi-private media investor. (previous post) That visit was revealed in a microblog post by the China head of online networking site LinkedIn (NYSE: LNKD), leading me to speculate that Murdoch was planning a return to the market through some kind of social networking venture.

This new theme park foray doesn’t really fit the description of such a venture, though it’s still quite possible that Murdoch is working on something else with China Broadband Capital. But from a broader perspective, this kind of theme park and retail store plan certainly seems far less sensitive and controversial than Murdoch’s other forays in China’s traditional media space. That said, it’s also worth noting that both Disney and Universal had to try for years before getting approval for their theme park plans, since such investments require huge sums and are therefore highly political.

At the end of the day, I have to applaud Murdoch for this new, more realistic approach to China, which appears to include a more gradual entry with more modest goals. Whether or not this new park will actually get approved is another matter, and I would probably only put the odds of an announcement by year end at 50-50. Even if the project moves ahead, it’s likely to meet with lukewarm reception due to big competition and relatively low awareness of the Fox brand and characters among Chinese consumers.