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The selection process for the market's third operator was a spectacle to behold
The strange and terrible saga of floundering Hong Kong broadcaster Asia Television (ATV) came to a conclusion of sorts on Wednesday after the Executive Council (ExCo) decided not to renew its license, while formally approving a new broadcast license for a PCCW-owned firm.
Which may be as well, as ATV’s last-ditch effort to save its license may have violated not only the T&C of that license, but also possibly insider-trading laws.
Unable to meet a generous ExCo deadline to prove it could turn itself around financially, ATV raised eyebrows Tuesday by announcing on its evening news program that it had found someone to buy a controlling stake in the company: Ricky Wong Wai-kay, the chairman of OTT video streaming service HKTV.
The announcement was a stunner, not least because HKTV was famously and controversially denied a free-to-air license by ExCo in 2013. Speculation ran wild that this was Ricky Wong’s way of getting the TV license he’d wanted.
The thing is, it wasn’t true. The next morning, Wong issued a statement to the Hong Kong Stock Exchange admitting that he had met with ATV on March 26 “to exchange and discuss preliminary ideas on how assistance may be provided to assist in the operations of ATV and the renewal of its domestic free television programme service licence”, but denying that any deal had been struck.
Later that morning, Deloitte stated that it had found a potential investor. The firm wouldn’t say who, but it’s rumored to be AID Partners Capital, a firm that rescued music retailer HMV from liquidation in Hong Kong last year.
But it made no difference to ExCo in the end. And so ATV will shut down on April 1, 2016.
That won’t mean a monopoly for incumbent broadcaster TVB, however. At the same press conference, Commerce and Economic Development Secretary Gregory So announced that Hong Kong Television Entertainment (HKTVE) – owned by incumbent telco and IPTV operator PCCW – will receive a formal 12-year free-to-air license. HKTVE won the license in principle in 2013 – the formal license gives it the green light to go on the air within a year.
According to Bloomberg, the news pushed PCCW’s share price up as much as 8.6% this morning. The news also gave cable TV operator i-Cable’s share price a boost, as i-Cable was also granted a principle broadcast license in 2013. With ATV on the way out, there is optimism that i-Cable could get its formal license approved soon.
Meanwhile, the ATV saga isn't quite over yet. ATV has vowed to go down swinging, saying it may take legal action to get its license back. But that will be a hard road for several reasons, starting with the fact that it used its own news program to broadcast a story about itself that was at best highly misleading and at worst deliberately false – which in either case could be a violation of the very license it was trying to save.