MEDIA WATCH: DMG Bid to Buy Taiwan’s Top TV Network Raises QuestionsThe powerful Chinese man behind the attempted acquisition of Eastern Broadcasting Co is reportedly the son of a former top PLA leader. The US firm denies any link
The recent announcement that Los Angeles-based Dynamic Marketing Group (DMG) Entertainment is seeking to acquire Eastern Broadcasting Co, Ltd (EBC, 東森), the largest privately owned Mandarin-language TV network in Taiwan, from the private equity firm Carlyle Group for the sum of US$600 million has raised fears in Taiwan that the acquisition may be an indirect attempt by China to further penetrate the island-nation’s media environment, a charge that the U.S.-based firm denies.
At first glance there isn’t anything overtly untoward about the transaction, which has been confirmed by a spokesman for Carlyle: Dan Mintz, chief executive of DMG Entertainment, has signed the deal, which will be subject to approval by the National Communications Commission (NCC), Taiwan’s broadcast regulator, and the Investment Commission at the Ministry of Economic Affairs (MOEA).
But there’s more to DMG: It apparently has China ties. According to reports in Taiwanese media, the chairman of the Beijing-based DMG Media (also known as Yinji Entertainment and Media, or DMG Yinji for short), is one Xiao Wenge, a.k.a. Peter Xiao (肖文閣). The 48-year-old Xiao is the 105th richest man in China, with an estimated net worth of US$2.9 billion. More worrying still is the fact that Xiao reportedly has ties to the People’s Liberation Army. Some Taiwanese media allege that his father, Xiao Jinguang (肖勁光, a.k.a. Xiao Yucheng [蕭玉成] a.k.a. Man Ge [滿哥]), was one of the ten senior commanders of the PLA; he was Deputy Secretary of Defense from 1954 to 1982 and Vice Chairman of the Fifth National People’s Congress Standing Committee from 1979-1983.
It is also alleged that the son of vice president Wu Wen-yih (吳敦義) may have helped establish the link between DMG and EBC.
DMG Entertainment denies the claims. Mike Chambers, director of public relations, told Thinking Taiwan that claim that the chairman of Yinji Entertainment and Media Co is the son of Xiao Jinguang is false. He adds that the listed Chinese company Yinji Entertainment & Media Co. Ltd. has no ownership connection with the U.S.-based DMG Entertainment LLC. And as per Chinese law restricting foreign ownership of a publicly traded entertainment company, Mintz has no ownership of Yinji and is the sole owner DMG’s global businesses, which continue to operate under the DMG and DMG Entertainment brands. The two separate companies, DMG (DMG Entertainment) and DMG Yinji, continue to work together through a strategic partnership under the DMG master brand. Xiao Kai, a daughter of Xiao Jinguang, also denies that Peter Xiao is a member of the family.
Still, a 2012 Forbes profile of Mintz indicates that he set up DMG in 1993 with Wu Bing, a former gymnast, and Peter Xiao, the son of a military officer. It also writes that DMG has about 800 employees, with offices in Shanghai and Los Angeles, and headquarters in Beijing.
In 2013 Peter Xiao said introducing Chinese culture to the world was “a core mission of his company.” Besides distributing foreign films, DMG also co-produced the 2009 propagandistic movie The Founding of a Republic (建國大業), which was released to coincide with the 60th anniversary of the founding of the People’s Republic of China, and the 2011 (equally propagandistic) film The Founding of a Party (建黨偉業 a.k.a., Beginning of the Great Revival), to coincide with the 90th anniversary of the Chinese Communist Party.
Mintz recently told the L.A. Times that he has had preliminary meetings with Taiwanese regulators — who should expect an application within the next two weeks — and that he was not concerned about potential hurdles because of his company’s China connection.
“If a Chinese person and a Chinese company buys it, that’s not going to work,” he told the L.A. Times. “[But] I’m not Chinese … so I think that’s going to work.”
Whether Taiwan’s regulators agree with Mr. Mintz remains to be seen, as there is a possibility that an American “face” is being used as cover for the acquisition of a Taiwanese media outlet by the Chinese. According to the Satellite Broadcasting Act, direct foreign investment in a Taiwanese media organization cannot surpass 50% of the shares; DMG’s bid would give it a 61% share. Regulations also forbid direct investment by China in media companies in Taiwan.
In a statement, the MOEA has said it will review the application “strictly” because of the Xiao family’s Chinese military background, Bloomberg reports.
The attempted acquisition is reminiscent of the 2011 bid by the pro-Beijing Want China Times Chairman Tsai Eng-meng (蔡衍明) to acquire China Network Systems (CNS), the second-largest cable TV provider in Taiwan, as well as the Taiwan operations of Next Media, including the proudly independent and China critic Apple Daily newspaper. Snowballing protests spearheaded by many future Sunflower Movement leaders forced regulators to take a closer look at the possible negative impacts of the deal in terms of market over-concentration and political Chinese influence in Taiwan’s media. Mr. Tsai eventually pulled out after a protracted, and oftentimes nasty, battle with civil society, academics, and regulators.
EBC operates a total of 20 channels, with eight in Taiwan offering news, sports, movies, drama and children’s programs. Its network enjoys high popularity across Asia, including Hong Kong, Malaysia and Singapore. It is also is carried in North America and Europe via cable and satellite, and has a subsidiary in South America.
(Last updated 2015.11.30, 10:31 added Forbes profile)
J. Michael Cole is editor in chief of Thinking Taiwan, a senior non-resident fellow at the China Policy Institute, University of Nottingham, and an Associate researcher at the French Center for Research on Contemporary China (CEFC) in Taipei.