News Ltd’s experiment of placing a banker in charge of its massive Asian satellite operation has failed. Despite promises of expansion — new production and new channels — Star is being broken up and wound down in Hong Kong. Paul Aiello’s failed leadership and the demoralising managership of dumped Chinese American COO Laureen Ong mean up to 200 more jobs are likely to be lost at STARs HQ in Hong Kong — after two years blood letting and failure to deliver on the promises.

Ironically, David Haslingden, who was left to clean-up at National Geographic after Ong was forced from there, will have to take up the mop again.

Rather than continue to pursue operations in China, it’s more likely Star will sell-off its China channels after Rupert Murdoch’s long acknowledged failure to make any headway there. Aiello and Ong didn’t help that effort at all.

Note the line in the email that follows about smaller operations in HK with a 30% reduction — that’s likely to be 30% of output rather than staff with more than 30% to be shed well before the end of the June 2010 financial year.

From: Human Resources (STAR HK)
Sent: Tuesday, August 18, 2009 2:35 PM
Subject: Message from James Murdoch — Restructure of News Corporation’s Broadcast Businesses In Asia

Departmental co-ordinators/secretaries please assist to distribute the above message to those who do NOT have access to STAR Intranet or the email system. Thank you very much!

Dear Colleagues,

Today I am announcing changes to News Corp’s broadcast businesses in Asia.

Since launching with only five channels in 1991, STAR has grown in scale and made a valuable contribution to the broadcast landscape in Asia. In this past year, even as we have faced a hard economic environment, STAR has made meaningful progress, most notably by creating a truly national footprint in India. In order to achieve our potential and outpace the market for growth, however, we will need greater focus and efficiency.

Accordingly, we will reshape the regional organization into three highly focused business units: STAR India, STAR Greater China and FOX International Channels (FIC), which will become responsible for the English-language channels previously managed by STAR outside of India.

We are making these changes because we want to renew each business’s ability to lead in its target marketplace. The plan you will hear more about today reinforces STAR India’s leading position at a time when India is exploding with opportunity. It creates a clear focus for our business in Greater China and it gives Fox International Channels greater scale which makes it the new number one in the region.

While it was once natural to have a larger, Asia headquarters in Hong Kong to provide services for individual marketplaces, the Company has reached a level of local market capabilities where we have the talent and technology to go a step further. Accordingly, we will reduce the size of the regional-service operations in Hong Kong and move resources closer to viewers. This in turn will increase scale and flexibility for advertisers and affiliates and improve operational efficiency.

The changes will take place over the next year, with much being accomplished by the end of this fiscal year. As STAR India and STAR Greater China add capabilities, our operations in Hong Kong will get smaller, with a reduction of 30 percent expected by June. Each of you will be receiving a briefing from your line manager to explain how the changes affect your area of the business. To colleagues in Hong Kong, I cannot say enough about your achievements and the trails you have helped blaze across the region, for which I thank you. I look forward to the contributions so many of you will make in the next stage for our businesses in Asia.

There are two other important changes to announce. First, we will create a small, News Corp office in Hong Kong to manage our interests. It will include corporate functions that will report to respective functional heads at News Corp. Second, Paul Aiello has decided to step down as CEO of STAR. Paul is a talented executive who leaves a strong legacy both in the colleagues he has brought on board and the major ventures that he started. I thank him, as a colleague and a friend, for his leadership and am pleased that he will stay with the Company through December to help with the transition.

From now on, STAR India and STAR Greater China will report directly to me. FOX International Channels, led by Ward Platt, will report to David Haslingden, CEO of FOX International Channels and National Geographic Channels Worldwide.

In February of this year, my father wrote to the whole company saying that it was rare to face an environment so fraught with difficulty yet so full of opportunity. He reminded us that we must renew our focus on large opportunities and prepare for change. It is in this context that we seek to build truly special businesses in STAR India, STAR Greater China and Fox International Channels.

I am grateful for your dedication, professionalism and support.

James Murdoch
Chairman and Chief Executive, Europe and Asia, News Corporation

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