Dentsu to take stake in JSkyB

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TOKYO -- Dentsu, the world's biggest ad agency, is planning to take a stake in Japan Sky Broadcasting Co., Ltd, the planned digital satellite venture founded by Rupert Murdoch's Australian media group News Corp and Softbank, Japan's biggest software distributor.

The Japanese ad agency's move was announced at a press conference in Tokyo on May 14 to reveal the heavily-trailed news that Sony Corp and Fuji Television Network are to become major investors in the satellite platform, due to launch in April 1998 with 150 channels.

News Corp, Softbank, Sony and Fuji TV are expected to be the main shareholders, holding perhaps 20% of the equity each, with the remaining 20% taken up by a range of smaller investors including Dentsu, Marubeni Corp., Orix Corp. (a finance and lease company) and communications company Hikari Tsushin Inc.

Details of the share allocations have not yet been finalized. However, Japanese law does not permit TV broadcasters to own more than 20% of another digital satellite broadcaster.

A new JSkyB management team was also announced at the press conference. Hajime Unoki, currently chairman and member of the board of directors of Aiwa Co., Ltd. (a Sony subsidiary) will take over the chairmanship from Murdoch, who will remain a member of the board of directors. The position of executive vice president will be filled by one of the Fuji Television board members. Masayoshi Son of Softbank will remain in his current position of president and CEO.

Murdoch introduced the new partners, saying that Sony is widely acknowledged as a leader in advanced technology, product development, productivity and retail sales. It also brings JSkyB a variety of software such as Hollywood movies from Columbia Tristar, and music, which accounts for a large share of Sony's domestic operations. "With this impressive range of resources," he said, "we are confident of their valuable contribution to JSkyB's development."

Fuji Television Network will play a crucial role in achieving one of JSkyB's core objectives: cooperation with the Japanese terrestrial broadcasters, he said. "It is our sincere hope that this marks the start of further collaboration between terrestrial broadcasters and multi-channel digital broadcasting."

Hisashi Hieda of Fuji said that the company would still sell its content to other broadcasters, but that JSkyB would be its first priority. Fuji Television is one of five national commercial networks.

In a separate move, Sony is expected May 15 to announce its acquisition of an estimated 70% stake in Tokyu Agency International, Japan's 21st-largest shop. TAI is 51% owned by Tokyu Group, a conglomerate that includes railroads and a department store along with Tokyu Agency, Japan's third largest ad agency.

Copyright May 1997, Crain Communications Inc.

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