IT and the Media

The battle between Livedoor and Fuji Television is really fascinating if you look at it from the perspective of watching a clip from the current of the times. I have the feeling that every time Nippon Broadcasting System President Akinobu Kamebuchi makes a comment, it is a loss for Fuji TV. Whichever way you look at it, he gives the impression of being under the mental guidance of Fuji TV Chairman Hisashi Hieda. At the same time, one wonders what the NBS employees were thinking of when they issued that statement against Livedoor. Since there was no labor union behind it, the statement had no official weight at all. It was a completely meaningless act that could well be seen as having been staged. The statement most probably would not pass in legal circles. (It was afterward that an anti-Livedoor union was formed.)

The same can be said about the issue of new share warrants. NBS allotted the warrants to Fuji TV and hurriedly concocted an explanation for the use of the funds. The court's decision to prohibit this issuance was a natural conclusion. In addition, from now on there is a possibility that ordinary shareholders might file a derivative lawsuit against companies that participate in takeover bids, including the Fuji TV takeover bid.

NBS announced that it would sell Pony Canyon to Fuji Television, and again Mr. Kamebuchi made his appearance. It was, I think, after Livedoor had submitted a written request to NBS not to sell important assets, and after this request had been sent to the board of directors, that NBS took this step as part of its scorched-earth tactic. What can we make of the response of the Hieda-Kamebuchi line, which allowed Livedoor to make the first substantial move and then itself followed with move after move that damaged the interests of shareholders. Now NBS reportedly is considering a capital increase by allotting shares to a third party, which would hand Pony Canyon shares to Fuji TV. This really is a "Crown-jewel" sale by the Fujisankei Communications Group.

NBS invited the present takeover drama by neglecting to adopt measures to protect the company. When the so-called Murakami Fund (M&A Consulting Inc., an investment fund headed by Yoshiaki Murakami) made a move, NBS failed to see that a bigger offensive was looming. This small crack of negligence led to the intensification and burgeoning of the takeover drama.

In terms of the battle against Livedoor, the current old-guard establishment of the Fujisankei group is at an enormous disadvantage. In particular, I wonder what is happening to the interests of the shareholders. The broadcasting world, which has been protected by regulations rooted in the 1955 setup, simply cannot go on like this.

Speaking about this matter, the former Prime Minister Yoshiro Mori talked recently about the importance of the public value of the radio waves. But if that is so, why is the government allotting them to just a few stations? Aren't the spread of Mr. Hieda's policy on the wasteful use of radio waves and homicide games to blame for the recent problem of juvenile crime? I think that the broadcasting stations, which are rooted in the 1955 setup and smothered by vested interests, should be reformed. I see the current drama as nothing more than just one episode in a saga that is going to continue for a long time. Watching the response of the Hieda-Kamebuchi line is like getting a glimpse into people and organizations that are protected by vested interests and into the structure of collusive interdependence. I find it a little tiring.

As for Livedoor, in terms of the axis of time, it has a long future ahead of it. There are certainly some moral issues there, such as the problem of off-hours stock trading, but it has done nothing illegal. I think that with the appearance of Livedoor, Fuji TV and NBS could add the Internet element, build a business style unparalleled in other broadcasting stations, and achieve rapid growth. Naturally, their corporate values and market prices would increase considerably as well.

Whatever the outcome, it is a fact that the integration of information technology and the media cannot be avoided.