The deal reportedly includes licenses to several publications, including Hong Kong editions of Elle, Cosmopolitan and Harper's Bazaar, with the company's market value estimated at US$392 million, according to data by Thomson Reuters.
It was previously thought that unlike the many acquisitions he has made to diversify Alibaba's portfolio, founder Jack Ma would reportedly be using his own money to invest in SCMP. The cost of about HK$3 billion (US$390 million) is, as Bloomberg describes it, "chump change" for a businessman with individual net worth of HK$29.7 billion (US$3.83 billion).
However with the deal now official and done via Alibaba, it remains to be seen how Ma would personally go about making his mark on the century-old media company, or what decision the company's board would make regarding its new acquisition.
In an interview with SCMP about the acquisition, Joseph Tsai, executive vice chairman of Alibaba Group pledged to uphold the newspaper’s editorial independence.
In addition, he said that the decade-old paywall for all SCMP news sites will come down shortly after the acquisition so that the newspaper can reach out to more readers around the world.
"Some say the newspaper industry is a sunset industry. We don’t see it that way. We see it as an opportunity to use our technological expertise and our digital assets to distribute news in a way that has never been done before," Tsai added.
What value could SCMP add to Alibaba? TVB, Hong Kong's flagship free-to-air TV channel, might seem a better potential fit, given Alibaba's recent Youku Tudou deal. So is Ma's motivation personal?
In 2013, when asked in a newspaper interview if he supported the violent crackdown on Tiananmen Square protesters in 1989, Ma was quoted as saying that the government's decision was "not perfect but definitely right". Alibaba replied that its boss was quoted "inappropriately'', after which online flaming of Ma ensued. The newspaper in question? The SCMP.
Politics aside, many believe an investment in SCMP has little hope of financial return. In the 1990s the Post was reputed to be the world's most profitable newspaper. Robert Kuok, a Malaysian-Chinese billionaire, bought the company from Rupert Murdoch in 1993 to "please Beijing ahead of the handover in 1997", ex-employees told Campaign Asia-Pacific. However, the SCMP in recent years has been more of an annoyance than a business boost for Kuok. And in the years since the handover, the paper's editorial reputation has changed from one of proud independence to that of a "pro-government pamphlet", as one source put it to Campaign.
“In the scheme of things, the SCMP is a pimple on a pumpkin. Jack just likes English-language toys."
Perhaps a mixture of deep pockets and a civic duty to a city where he lives at least some of the time have spurred Ma to "take over this hot potato from Kuok", as one source said, since Ma has indisputedly shaken up traditional businesses in China, from e-commerce to online finance to retail logistics.
"He has the financial wealth and tech business model to help SCMP transform," said Lawrence Chong, CEO at Consulus. "This combination could be interesting, and he does not need be in a hurry to monetise, since he has the resources to continue to support SCMP's excellent editorial quality".
While that editorial quality is a topic for debate, perhaps again, rich businessmen just like to own newspapers, along with their penchant for sports teams. Many stories on the acquisition have mentioned that Amazon head Jeff Bezos owns the Washington Post, and Ma already owns a football side, Guangzhou Evergrande.
"Bezos bought the Post, which broke Watergate," said Liam Bussell, head of marketing at World First Asia. "If Ma bought SCMP, which may break whatever [Hong Kong Chief Executive] CY Leung asked on behalf of Beijing, I would guess it's a marquee purchase. I can see it as a platform for shilling content in English.”
Others downplay any great significance to the deal. “In the scheme of things, the SCMP is a pimple on a pumpkin," said Christopher Noel Robinson, managing partner at Anovax. "Jack just likes English-language toys."
But others have refuted the comparison to Bezos and the Post. "No way," said Lu Jin, senior public affairs advisor with Fortune China Public Relations. "Considering the SCMP is in a sense an icon of Hong Kong, and even a symbol for the whole of Asia, while the media is part of the most strictly regulated ideological space in mainland China where Jack Ma is from."
Hong Kong is "now nothing but an autonomous region of China", and Ma’s stake to become the newspaper’s publisher would mean a further, and significant, step in exerting Chinese influence globally, said Lu.
"With Jack’s global influence, insight, and in-depth activities in all things digital in China and beyond, he will transform the newspaper and its revenue model."
Andrea Fenn, managing director of Fireworks, sensed that this is an obvious aspiration of Alibaba rising to be an international platform, and "wanting to be influencing western public opinion". This is evident from Ma's Hollywood ambitions and his invitations to international actors like Daniel Craig to the Tmall 11/11 gala, he said.
Ma is also quickly becoming China’s de facto business ambassador to the west, following recent meetings with British Prime Minster David Cameron and US President Barack Obama.
There are a few ways to view this potential acquisition from the angle of SCMP's future advertising direction, pointed out Kevin Huang, CEO of Pixels. "Not just any new owner, with Jack Ma as the new owner of SCMP, the impact is clear," he said. "With Jack’s global influence, insight, and in-depth activities in all things digital in China and beyond, he will transform the newspaper and its revenue model."
Expect Ma to bring data insights to the company's ad products online, with a major focus on mobile and video. "In addition, it is highly likely that e-commerce will be part of key revenue for the 'newspaper'," Huang said.
SCMP ventured into e-commerce in October, via a "landmark investment" in Hong Kong-based online retailer MyDress.com.
"Maybe Jack Ma actually found a way to fit SCMP into Alibaba's core business model. It may have to do with adding local/international news to Alibaba's platform offerings to truly become a 'lifestyle' brand."
“Through MyDress, we will gain a firm foothold in the e-commerce space in Hong Kong and extend along the internet value chain of ‘content-community-commerce’, thus enabling new monetisation possibilities,” Robin Hu, CEO of SCMP Group, said at the time.
Could this operation have interested Ma? Fireworks' Fenn certainly thought so. "Maybe Jack Ma actually found a way to fit SCMP into Alibaba's core business model," he said. "It may have to do with adding local/international news to Alibaba's platform offerings to truly become a 'lifestyle' brand. Notice that recently Alibaba branched into travel with Alitrip, also in the lifestyle direction."
If Fenn's theory proves correct, the industry can expect news from SCMP to be syndicated on the lifestyle platforms of Alibaba, with much higher visibility, he said.
Pixels' Huang also expects SCMP’s paywall to be removed and monetisation done directly through highly targeted ads with video content. "Time to spend the annual HK$1,299 SCMP.com subscription on Tmall.com instead," he quipped.
This means "more ad money to publicise Alibaba and everything that revolves around it," Fenn said. "Literally, more hard cash for ad placement or sponsored content about Alibaba," he added. "Can we expect exceptional coverage on 11/11 and Alibaba's other activities on the SCMP?"
"We should stop with the comparisons with Bezos. The SCMP isn't the WaPo. Ma's doing something different, which is typical of him. We're in for a surprise on this one."
Added World First's Bussell, "It could be useful down the line to spin Alibaba's tales of the redemption of the 40 thieves."
Ma simply does not make bets along the lines of conventional wisdom, said Alan Soon, founder and CEO at The Splice Newsroom and an ex-Yahoo managing editor, who felt this is not a typical play for advertising revenue.
"Neither is this a Bezos-Washington Post story," Soon said. "We should stop with the comparisons with Bezos. The SCMP isn't the WaPo. Ma's doing something different, which is typical of him. We're in for a surprise on this one."
This article was originally published on 24 November but was updated on 11 December when the deal became official.