Rejecting Rakuten and converting into a certified broadcasting holding company (2008)

Defending yourself with the rules

To the end, TBS refused Rakuten’s merger proposal on the logic of the business. Inoue Hiroshi’s contrast — we want to build a record in the business and stack it up from below; he is trying to come from above by buying shares — was a statement of a view of the industry, that broadcasting is built by accumulation. What actually settled the matter, however, was not the business but a provision of the Broadcast Act: the certified broadcasting holding company, whose cap of 33% on any single shareholder blocked the road for a Rakuten that had committed some ¥120 billion.

Defending control, though, is not the same as answering the question Rakuten had put. TBS never produced its own business answer to how the convergence of the internet and broadcasting was to be absorbed. In the year to March 2009, when the contest ended, consolidated net profit fell to ¥1.7 billion, and the following year closed in the red. Inside the control it had fenced off by statute, the earning power of a core business dependent on terrestrial advertising had already thinned. The price of holding on was the task it left behind — having to redraw the path to growth itself.