Past and Future: How State-owned Cultural Enterprises Utilize Capital

"Enterprise Management of Public Institutions" was tried out, and public listing broke the ice and set sail.

The capital operation of state-owned cultural enterprises stems from a series of theoretical and practical explorations linking the cultural field with economic laws. 1978 The Ministry of Finance approved eight news organizations, including People's Daily, to implement "enterprise management of public institutions", and 1979 issued a document to reiterate and promote this management model in the national news media. In the same year, Shanghai TV broadcasted the first commercial advertisement in China TV history. From 65438 to 0985, Shanghai Radio and Television Bureau began to implement the economic contract responsibility system in radio and television stations. During this period, early cultural and economic research appeared in academic circles, and the concepts and formats of "broadcasting economy", "publishing economy", "newspaper economy" and "electronic shadow economy" were discussed. After the 14th National Congress of the Communist Party of China, the research on cultural economy became more and more active, and it began to explore the fundamental and regular problems of cultural industry development from the perspective of market economy, which provided a theoretical basis for the capital operation of cultural enterprises.

1992, Shanghai Oriental Pearl Co., Ltd., the first joint-stock company in China's cultural industry, was jointly established by Shanghai Radio, Film and Television Development Corporation, Shanghai TV Station and Shanghai People's Broadcasting Station, and was successfully listed on the Shanghai Stock Exchange on February 1994, becoming the first cultural listed company in China, taking the first step for state-owned cultural enterprises to grow and develop with the help of the capital market. Subsequently, Wuxi Zhong Shi Film and Television, Hunan Radio and Television Media, Chengdu Borui Media, Beijing CCID Media, Beijing gehuayouxian, Shaanxi Radio and Television Network and other enterprises went public directly or indirectly, becoming the "first echelon" of state-owned listed cultural enterprises. During this period, there is no unified and clear policy for the listing of state-owned cultural enterprises, and all listed enterprises are characterized by exploration and "case". In 20001year, the CSRC listed the media and cultural industries as one of the basic industries of listed companies 13, including publishing, audio-visual, radio, film and television, art and information dissemination services, indicating that the industry status of cultural listed companies has been initially recognized by the capital market.

Deepen the reform of cultural enterprises and institutions with "quasi-capital operation" as the main content of "collectivization"

At the same time that the listing of state-owned cultural enterprises broke the ice, the "quasi-capital operation" with the "collectivization" of state-owned cultural enterprises and institutions in newspapers, publishing, radio and television, movies and other fields as the main content also began. 1996, the General Administration of Press and Publication officially approved Guangzhou Daily as the pilot unit of newspaper group, and established the first newspaper group in China. The discussion on newspaper groups was finally put into practice, which provided a new way for news organizations to enhance their strength, vitality and influence through resource integration under the conditions of socialist market economy. Since then, Yangcheng Evening News, Nanfang Daily, Wen Hui Daily, Xinmin Evening News, Economic Daily and Guangming Daily have also set up newspaper groups, and the group reform has achieved positive results.

From 65438 to 0999, China and the United States signed a bilateral agreement on China's accession to the WTO, which removed the biggest obstacle to China's accession to the WTO. Faced with new development opportunities, academic and industrial circles have placed the research field of cultural management in a broader background of global competition. 1999 with the approval of the press and publication administration, Shanghai Century Publishing Group, the first publishing group in China, was formally established. Since then, Guangdong, Liaoning, Beijing and other places have set up publishing groups with regional and industry characteristics. In the same period, the first batch of pilot distribution groups such as Jiangsu Xinhua Distribution Group and Guangdong Xinhua Distribution Group were formally established. In April, 2002, China Publishing Group, which was mainly established by publishing units directly under the General Administration of Press and Publication, was listed in Beijing, and the collectivization of publishing industry entered a new stage. As of May 2002, dozens of news and publishing groups have been established in China, including 26 newspaper groups, 7 book publishing groups, 4 distribution groups and 1 periodical group.

In the field of radio and television, 1999 established Wuxi Radio and Television Group, the first radio and television group in China, which opened the exploration of the collectivization of radio and television industry. In 2000, the State Administration of Radio, Film and Television issued a principled opinion on the trial development of radio, film and television collectivization, and Hunan Radio and Television Group, the first provincial radio and television group in China, was formally established, which was regarded as an important "institutional innovation" in China's radio and television management, and formed the "Hunan phenomenon" in the radio and television industry for a time. In 20001year, the notice on several opinions on deepening the reform of the press, publication, radio and television industry was officially released, which put forward guiding opinions on the formation of groups and investment and financing. During the year, Shanghai Culture Radio and Television Group and Beijing Radio and Television Group were established one after another, and enterprise management was introduced. At the end of the year, SARFT promoted CCTV and other enterprises and institutions to set up China Radio, Film and Television Group, which reflected the active exploration of the radio and television industry in promoting reform and resource sharing under specific historical conditions.

During this period, the pilot work of film collectivization has also achieved certain results. The State Administration of Radio, Film and Television has vigorously promoted the three major film bases in Beijing, Shanghai and Changsha, and successively established film groups such as China Film, Shanghai Film, Chang Ying Film and Yongle Film Group. By the end of 2002, there were *** 14 commercial radio and television groups and 7 film group companies in China.

Mergers and acquisitions with capital as the link have been carried out gradually, bond financing has started, and many breakthroughs have been made in listing.

In 2003, the pilot work of cultural system reform was officially launched, and the Political Bureau of the Central Committee conducted a collective study on the development status of the world cultural industry and the development strategy of China's cultural industry. The development of cultural industry has entered a period of strategic opportunities, and the role of capital operation in the development and growth of enterprises has gradually become prominent. State-owned cultural enterprises listed in the early stage have also gradually carried out some substantive mergers and acquisitions with capital as the link. For example, radio and television media acquired the equity of Shenzhen Han Rong Company and purchased mature related projects into the company; The radio and television network will acquire the equity of the radio and television companies in the province, and further increase the asset ratio of the cable television network. Among other enterprises, Shanghai Xinhua Publishing Group successfully realized 49% equity transfer through Shanghai United Assets and Equity Exchange, which provided a useful reference for the reform of cultural enterprises and institutions.

In 2004, Beiqing Media, controlled by Beijing Youth Daily, was officially listed on the Hong Kong Stock Exchange, becoming the first overseas listing of state-owned cultural enterprises, which attracted great attention from investors. At the end of 2005, the Central Committee and the State Council issued "Several Opinions on Deepening the Reform of Cultural System", which accelerated the listing of state-owned cultural enterprises. In 2006, Shanghai Xinhua Publishing Group successfully achieved backdoor listing through Hualian Supermarket, becoming the first A-share listed company in China publishing industry. In the same year, the gas shares were changed to Wenhua Media, and the media assets of Wenhua Holdings were listed on the backdoor. In 2007, Xinhua Media issued additional shares to Jiefang Daily Newspaper Group to realize the listing of the main operating assets of the Group. In the same year, Sichuan Xinhua Wenxuan was listed in Hong Kong, and Liaoning Publishing Media listed its editing business and business as a whole on the Shanghai Stock Exchange. Subsequently, Anhui Publishing Group also achieved backdoor listing, and the cultural industry sector of China A-share market began to take shape.

With the increasingly close combination of culture and capital, some financial products have been introduced into the cultural field, which has injected new impetus into the development of state-owned cultural enterprises. In 2006, Shanghai Oriental Pearl Group issued the first issue of1200 million yuan short-term financing bonds, which is the first debt financing tool issued by cultural enterprises in the inter-bank bond market. In 2007, China Film Group Corporation issued the first corporate bond of cultural enterprise, which opened up a new financing channel for long-term project construction. In 2007, Jiangsu Xinhua Distribution Group introduced Hony Capital as a strategic investor, and equity investment funds began to introduce traditional cultural management fields, gradually becoming an important force to promote the integration and structural adjustment of state-owned cultural resources. After the outbreak of the international financial crisis, asset prices in the international market fell to varying degrees, and some enterprises actively explored overseas layout to promote the export of cultural capital. In 2008, Hunan Publishing Investment Holding Group acquired South Korea's Ariquan Publishing Company, which became the first transnational acquisition by a local publishing group.

Positive progress has been made in cross-regional and cross-industry restructuring, and new achievements have been made in the construction of regional industry publishing groups.

For a long time, it has become an objective requirement to adopt the mode of departmental ownership and hierarchical management and allocate cultural resources by administrative means to adapt to the situation and development needs, break down administrative and zoning barriers and cultivate a unified market system. In the "Cultural Industry Revitalization Plan" issued by the State Council in 2009, it is emphasized to cultivate key cultural enterprises and promote cross-regional and cross-industry alliances or restructuring. With the promotion of all parties, positive progress has been made in the reorganization of state-owned cultural enterprises across regions, industries, ownership and administrative levels. In the cross-regional reorganization, Time Publishing Media and Heilongjiang Publishing Group reorganized Xinhua Bookstore in Heilongjiang Province; North United Publishing Media Group has carried out equity cooperation with Tianjin Publishing Group and Inner Mongolia Xinhua Distribution Group, and actively promoted cross-regional operation. In the cross-administrative reorganization, China Publishing Group and Ningxia Hui Autonomous Region People's Government jointly reorganized the Yellow River Publishing Media Group; Anhui Publishing Group reorganized and controlled Zhonglian Film and Television Center under the China Federation of Literary and Art Circles, breaking administrative divisions and realizing the two-way entry of central and local enterprises. In the cross-industry restructuring, China Radio International invested in Wenhua Media through its Guoguang Holdings and became the actual controller of Wenhua Media. Liaoning Publishing Group and others jointly acquired the equity of Blue Cat Animation, and entered the animation industry from the traditional publishing industry. The implementation of a series of mergers and acquisitions has promoted the breaking of regional blockade and fragmentation, and promoted the flow of cultural production factors throughout the country.

20 10 The General Administration of Press and Publication issued relevant opinions, encouraging the first integration of press and publication resources in the fields of education, science and technology, health, finance and culture, and encouraging powerful local press and publication enterprises to integrate resources first, thus forming a number of regional comprehensive groups and industry professional groups. As an important task of cultivating backbone cultural enterprises, the construction of press and publication group has also achieved new results. Hubei Daily Media Group reorganized Hubei Science and Technology News, and Nanjing Daily Newspaper Group reorganized Nanjing Times Media Company. In the reorganization of the central publishing unit, China Democracy and Legal Publishing House and China Publishing House were separated from the original competent organizers and joined China Publishing Group Corporation. China Education Publishing Media Group Corporation, composed of People's Education Publishing House and Higher Education Publishing House, was established.

The pace of listing and financing has been accelerated, and significant progress has been made in the construction of specialized institutions for the supervision of cultural assets.

The Sixth Plenary Session of the Seventeenth Central Committee of the Communist Party of China made special arrangements for cultural reform and development, and proposed to innovate the investment and financing system and support state-owned cultural enterprises to face capital market financing. The capital operation of state-owned cultural enterprises has received greater attention and support. The CSRC said that it is necessary to give full play to the support and service functions of the capital market for cultural development and prosperity, and promote cultural enterprises and cultural industries to make full use of the capital market to become bigger and stronger. The central bank also said that it will further promote financial reform and innovation and increase the financial industry's credit support for cultural industries. The introduction of a series of measures has created a strong atmosphere for the capital operation of state-owned cultural enterprises.

Due to the unprecedented attention paid by the capital market to the cultural industry, the listing process of state-owned cultural enterprises has been accelerated. From 20 1 1 to the end of 20 12, * * 9 state-owned cultural enterprises were successfully listed, among which, Phoenix Media raised 4.492 billion yuan, the highest amount of financing for state-owned cultural enterprises; People's Network is the first central key news website to be listed, and it is also the first news media enterprise to incorporate the editing business into the listed entity to realize the overall listing. Bestv successfully listed through the backdoor of radio and television information, becoming the first company to realize the overall listing of radio and television new media operating assets; As a leading enterprise to promote the development of triple play, China Digital Media has also become a new force in the cultural capital market.

As the top-level design link of capital operation of state-owned cultural enterprises, the establishment of specialized institutions for the supervision of state-owned cultural assets has made great progress since the Sixth Plenary Session of the Seventeenth Central Committee. Beijing, Hunan, Hebei, Shanxi, Shandong, Hubei, Shaanxi, Zhejiang, Gansu, Yunnan and other provinces and cities have successively established different forms of specialized institutions for the supervision of state-owned cultural assets. By the end of 20 12, there will be 16 provincial specialized institutions.

The New Third Board was born as a phalanx of cultural state-owned enterprises, and media integration became an important path for mergers and acquisitions.

The 18th National Congress of the Communist Party of China promoted cultural reform and development to a new strategic height. The Third Plenary Session of the 18th CPC Central Committee proposed to encourage the combination of financial capital, social capital and cultural resources, and promote the cross-regional, cross-industry and cross-ownership mergers and acquisitions of cultural enterprises. Capital operation has become an important strategy to promote the reform of cultural enterprises. In 20 13, the new third board was officially expanded to the whole country, which also opened up a new way for state-owned cultural enterprises to land in the capital market. A number of enterprises such as Beijiao Culture under Beijing Publishing Group, Jingchu Net controlled by Hubei Daily Media Group, Northland Media under Liaoning Daily Media Group, Northland Network under Tianjin Radio and Television Station, Fashion Shopping under Jiangxi Radio and Television Station successfully listed on the New Third Board, which further promoted the securitization of state-owned cultural assets and broadened the flowing space of state-owned cultural assets. The New Third Board also gave birth to the first state-controlled book distribution. The listing of the New Third Board has the characteristics of low threshold, short cycle and simple procedures. When the conditions are met, it will be listed on the main board, providing a new support platform for the entrepreneurial development of small and medium-sized state-owned cultural enterprises.

20 14 the fourth meeting of the central leading group for comprehensive deepening reform deliberated and adopted the guiding opinions on promoting the integration and development of traditional media and emerging media. In the same year, Publicity Department of the Communist Party of China held a symposium on the merger and reorganization of state-owned cultural enterprises in Shenyang to promote the integration of state-owned cultural enterprises with capital as a link and make them bigger and stronger. Capital integration, especially mergers and acquisitions with media integration as the path, has achieved further results. In the field of new media, Jiangxi Publishing Group has successively carried out more than ten mergers and acquisitions, such as SmartCom, Yilian and Hong Kong Global Digital Technology, and directly obtained 392 technical patents, forming a business pattern covering traditional main businesses, emerging formats and capital management. Radio and TV media put forward the strategy of "platform+content", and successively implemented the merger and acquisition of a series of new media such as Guangzhou Yifeng and Jiangsu Wutai, and the ecological map of new Internet media gradually became prominent. In addition, Phoenix Media invested in PPTV and theme network, Borui Communication completed the acquisition of roaming valley and other projects, and traditional enterprises actively expanded into emerging fields such as online games, online literature, online video and mobile games.

In order to promote the investment and operation of state-owned cultural capital, Beijing, Jilin, Gansu and other places have set up different forms of cultural investment holding groups as the main body of capital operation to promote cultural investment and financing.

Some enterprises have also initiated the establishment of cultural industry theme investment funds and other financial entities to deepen the integration of culture and finance and expand their development horizons and fields, such as the CIC Cai Zhong Music Industry Fund and Game Industry Fund initiated by China Financial Publishing Media Group, a central enterprise, and the Oriental Star Cultural Industry Fund initiated by zhejiang daily press group, a local enterprise. At present, the vast majority of state-controlled cultural listed companies are involved in equity investment business, and equity investment has become a new profit growth point for some state-owned cultural enterprises.

Promote the "double-effect integration", develop a mixed-ownership economy, and usher in a new wave of listing.

In 20 15, the CPC Central Committee and the State Council issued guiding opinions to promote the "double-effect integration" of state-owned cultural enterprises, and improved the system and mechanism of "double-effect integration", which became the core link of the reform and development of state-owned cultural enterprises. Shanghai Wenguang Group reorganized its two listed companies, bestv and Oriental Pearl, and realized the first stock exchange and merger of two cultural listed companies in the A-share market. After the reorganization, the newly listed companies took the lead in launching the equity incentive plan among state-owned cultural enterprises, and set up political guidance indicators, audience response indicators and social impact indicators in the equity incentive plan, which put forward specific requirements in terms of social benefits, providing a reference for state-owned enterprises to achieve "double-effect integration" in related operations.

Influenced by multiple factors such as policy-driven and consumer demand, the cultural industry has attracted extensive attention from private capital, and joint venture and cooperation with state-owned enterprises has become a strategic choice for many private enterprises to promote investment in the cultural field. In the process of promoting capital operation, some state-owned cultural enterprises have developed into mixed ownership enterprises through diversified equity transformation. On the one hand, some state-owned cultural enterprises hold private cultural enterprises. 20 15 People's Literature Publishing House acquires scholars from private cultural enterprises with advantages in copyright, planning and market operation, enriching business sectors and expanding development space. Wan Xin Media acquired Blue Lion Culture, a well-known private financial publishing institution, which extended from book publishing to content publishing in the upstream of the industrial chain. On the other hand, some state-owned cultural enterprises actively introduce private capital for restructuring within the scope permitted by the policy. China Digital Media issued 20% shares to Yunxi Investment, raising 6.5 billion yuan to promote the company to further innovate products, content and technical services. The integrated development of state-owned capital and all kinds of social capital makes state-owned cultural capital have the function of mobilizing and organizing social capital, enlarges its own business space and energy, is conducive to the complementarity and mutual promotion of various ownership capitals, and also provides a reverse mechanism for the reform and development of state-owned cultural enterprises.

From 20 15 to 20 16, state-owned cultural enterprises ushered in a new wave of listing. Within two years, 12 state-owned cultural enterprises have successfully listed directly or indirectly. Especially in 20 16, there were five IPOs in August alone, and seven were successfully listed in the whole year, setting the highest number of state-owned cultural enterprises listed over the years. At the same time, some innovative explorations and practices have emerged in the listing, which has become an important symbol of the phased achievements of the cultural system reform. For example, China Film is the first film enterprise listed in the whole industry chain, Guangxi Radio and Television is the first cultural enterprise listed in five minority autonomous regions, Urban Media is the first publishing media enterprise listed in a sub-provincial city, and Reader Media is the only concept stock with a famous periodical brand in the A-share market. Under the background of increasingly fierce market competition in the field of film and television production, the listing process of radio and television enterprises is accelerating at this stage, especially the successful listing of film and television production enterprises such as China Film, Shanghai Film and Happiness Blue Ocean, which provides a model and reference for accelerating the development of state-owned film and television enterprises, deepening the reform of separation of production and broadcasting, and improving the content productivity of film and television production units, and its subsequent development and driving effect are also widely expected.

Prospect of capital operation of state-owned cultural enterprises

By the end of 20 16, there were 40 state-controlled listed companies in China A-share market, with a total share capital of 51700 million shares and a total market value of about 800 billion yuan. Since the docking of the capital market, the main form of traditional capital operation, state-owned cultural enterprises have stepped in, and the supporting role of the capital market in improving the allocation efficiency of cultural resources has become increasingly prominent, and the multi-level capital operation system of state-owned cultural enterprises has been continuously improved. Some transformed enterprises have achieved the leap of "organization-product management-capital management" within a few years, which is rare in the history of enterprise reform and development in China. In particular, some enterprises that went public earlier, relying on the support of the capital market, innovated operating mechanisms and broadened financing channels, formed a comparative advantage in the market. The market-oriented flow and reorganization of state-owned cultural capital has promoted the preservation and appreciation of state-owned cultural assets, improved the scale and intensive level of state-owned cultural enterprises, and injected new potential energy into liberating and developing cultural productivity and promoting state-owned cultural enterprises to become bigger and stronger. At present, the development of state-owned cultural enterprises is facing rare historical opportunities and more intense market competition. As a booster of enterprise development, the capital operation of state-owned cultural enterprises has also been placed on new and higher expectations.

Help state-owned cultural enterprises to transform and upgrade. In recent years, emerging cultural formats based on Internet technology have risen rapidly, breaking the logic of production and communication dominated by traditional cultural institutions and promoting the continuous upgrading of the cultural industry structure. In recent years, the merger and acquisition of emerging formats by state-owned cultural enterprises has become an important path for external expansion. Most IPO financing and post-listing refinancing projects are also related to digital transformation. For example, the funds raised by China Film Co., Ltd. are used for digital cinema investment and digital projection promotion, and the funds raised by readers' media are used for digital publishing and information platform construction. In the rapidly developing market environment, transformation and upgrading will remain the strategic task of traditional cultural institutions for some time to come. In 20 15, among the 43 newspaper groups in China, 3 1 reported operating profit losses, an increase of 14 compared with 20 14. In 20 16, TV advertisements in China decreased by 5.66% year-on-year, and cable TV users experienced negative growth for the first time in the fourth quarter. Under the background of profound adjustment of industrial structure, relying on the support of capital market to improve the ability of independent innovation and directly introducing new format resources through capital operation will inject new impetus into shortening the transformation and upgrading cycle and accelerating the transformation of development mode for state-owned cultural enterprises.

Help state-owned cultural enterprises to moderately diversify their operations. State-owned cultural enterprises are mainly born out of operating cultural institutions, and their business fields are set in blocks, which has long formed a single-operation development model. Cultural production has prominent characteristics of scope economy, and the multiple development and utilization of content resources and multiple value-added effects can be fully exerted in its industrial operation. In recent years, some mixed M&A cases have emerged in the capital market, such as Zhejiang Newspaper Media's shareholding in Tangren Film and Television, and Phoenix Publishing's acquisition of Legendary Pictures, which promoted the diversification of state-owned cultural enterprises. With the in-depth development of digital technology, network technology and information technology, the correlation and interchangeability between different media have been further strengthened, and business crossover between industries has become increasingly common. Media convergence has become the trend of industrial development. In the market structure of integrated development, cross-media and cross-industry reorganization will continue to advance in depth, and promote the in-depth innovation and transformation of cultural production organizational structure and product structure. Of course, at the present stage, diversified management of such state-owned cultural enterprises should be based on the support of core products and industries, and limited diversification should be carried out, so as to extend the core competitiveness to the range within its power and enjoy the value of different businesses, which is the diversified management strategy.

Help state-owned cultural enterprises go overseas. Overseas cultural investment not only has the significance of capital appreciation, but also has the function of cultural export. For a long time, China's cultural going abroad is mainly in the form of copyright trade, product export and cultural exchange activities. In recent years, the capital export of state-owned cultural enterprises has become increasingly active, and they have entered the international cultural market through cross-border mergers and acquisitions, such as Jiangsu Phoenix Education Press's acquisition of Shuye Tong assets of American PIL Company, and Guangxi Normal University Press's acquisition of Australian Visual Publishing Group. For some time to come, the world economic adjustment cycle has not yet ended, and many developed and emerging economies will introduce a series of investment facilitation measures to attract foreign investment. The implementation of the "Belt and Road" strategy and the promotion of RMB internationalization will also provide more space for the capital export of cultural enterprises. State-owned cultural enterprises can further expand the breadth and depth of overseas capital operation, make greater achievements in transnational mergers and acquisitions, become an important driving force for the export of cultural capital, and promote the development of China's cultural industry to a higher level.