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Wednesday, June 6, 2007

TBS affiliates say no to Rakuten

Local broadcasters feel tieup won't bring more value


Staff writer

Local broadcasters affiliated with Tokyo Broadcasting System Inc. voiced strong opposition Tuesday to Internet mall operator Rakuten Inc.'s bid to make TBS an affiliate.

Presidents of 27 local TV stations of the Japan News Network, a TV network with TBS at the top, released a joint statement saying they back TBS's position of refusing to agree to Rakuten's plan of acquiring a stake of more than 20 percent in the broadcaster.

"Member companies are unhappy with the current situation," Masahiro Yamamoto, president of Osaka-based Mainichi Broadcasting System Inc., told a news conference. "We are also doubtful whether Rakuten's proposal will lead to greater corporate value for us."

In mid-April, Rakuten said it would try to raise its stake in TBS to more than 20 percent and turn the broadcaster into an affiliate. Rakuten wants control of TBS to offer new services that blend the Internet and broadcasting businesses.

Rakuten, which now holds a 19.86 percent stake in TBS, also has been trying to get proxy votes to force TBS management to implement its ideas, which include appointing Rakuten President Hiroshi Mikitani as an outside board member.

This is the first time the affiliates have openly expressed opposition to Rakuten's bid to have a bigger stake in TBS.

Rakuten's bid to make TBS its affiliate is a threat to local broadcasters' advertising revenue. Most of the TV programs aired on their stations are supplied by TBS, and they fear that if Rakuten airs those programs on the Internet, viewers would shift to the Web and reduce audience sizes, thereby driving away advertisers.

However, Yamato Ishigami, president of RKB Mainichi Broadcasting Corp. in Fukuoka Prefecture, said the problem is Rakuten's heavy-handed attempts to interfere in TBS management.

"Purchasing a huge amount of shares and pressuring management integration . . . is the problem," Ishigami said.



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