Converting to a certified broadcasting holding company (2008)

What it means to separate the licence from the capital

To read this conversion only as a takeover defence prompted by the Livedoor affair is to see half of it. The statutory ceiling of under one-third of voting rights did indeed act as a brake on outside capital. But the larger point appears to have been separating the capital-allocation function from the entity that holds the broadcast licence, and rebinding non-broadcast businesses — mail order, satellite broadcasting — under the same pool of capital. It was an attempt to repair the fragility of the capital structure the contest had exposed by redrawing the design of the organisation itself.

Recasting the vessel did not, however, immediately yield fruit. The consumer-information business built around Cecile sank under goodwill amortisation, and consolidated ordinary profit fell to ¥12.1 billion in the year to March 2010, two years after the transition. A holding company grants freedom to move capital and, in the same motion, prints the results of those moves straight onto the consolidated accounts. What the 2008 reorganisation posed was the question of where the capital earned by broadcasting should be sent — a question that would be asked of this company for a long time afterwards.