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The Internal Affairs and Communications Ministry plans to authorize private TV broadcasters to set up holding firms that would then control a number of broadcasters via equity stakes, ministry officials said Wednesday.

Such authorization would involve relaxing the current rule under which a TV broadcaster with a stake of 20 percent or more in another TV broadcaster is barred from getting a stake of 20 percent or more in yet another, the officials said.

The envisioned decontrol is designed to enable major broadcasters to effectively enhance their control over smaller and regional stations by setting up holding firms and putting the smaller firms under their wing, they said.

In addition, the holding firms would be limited to “pure” entities — whose duties are limited to holding stakes of other firms placed under their wing — instead of “operational” ones that can both hold stakes in other firms and engage in their own core business operations, including broadcasting.

The deregulation, eyed by the ministry, is also designed to enable small broadcasters lacking adequate financial resources to fund massive capital outlays to shift from terrestrial analog to digital broadcasting, the officials said.

An advisory panel to communications minister Heizo Takenaka is now discussing a proposal to loosen the current rule, which has long prevented broadcasters from gaining control over managerial decisions at other broadcasters via stake acquisitions.

The panel is discussing the envisioned decontrol to enable creation of comprehensive media companies that are internationally competitive, they said.

Authorizing broadcasting industry holding companies may induce a large-scale and speedy reconfiguration of capital ties among the nation’s major and regional TV broadcasters, they said.

In the event holding firms are allowed, broadcast licenses would be given to smaller and regional broadcasters put under their wing, in lieu of issuing them to the holding companies, they said.

However, the government will maintain the current limit on foreign companies’ combined ownership in Japanese broadcasters, either directly or via subsidiaries, to less than 20 percent, they said.

Since this rule is to be applied to holding firms even after the proposed deregulation, equity stakes of foreign companies in the holding firms will be limited to less than 20 percent.

A few major TV broadcasters have asked the government to grant them stronger control over their affiliated broadcasters under the pure holding company formula.

In response, the ministry has tasked another advisory panel with crafting recommendations on steps to allow major broadcasters to put a number of regional broadcasters, communications satellite-based broadcasters, broadcasting satellite-based firms and other subsidiaries under the wings of holding firms that they would set up.

The ministry has already started the process of loosening the current rule, by hiking the upper limit on stakes in broadcasting satellite-based firms that can be held by terrestrial broadcasters.

In addition, the ministry has allowed regional TV broadcasters to merge with other small broadcasters or turn other broadcasters into their subsidiaries, as long as the head offices are in the same or neighboring prefecture.