Al Jazeera Must Go... Public
By Rich Smith
March 24, 2005
Two months ago, The Economic Times reported that Al Jazeera, the wildly popular Arabic satellite news network, is hatching plans to take itself public. The station, founded in 1996 by the emir of Qatar, is not yet profitable. But then, that didn't stop fellow satellite media pioneers Sirius Satellite Radio (Nasdaq: SIRI) and XM Satellite Radio (Nasdaq: XMSR) from floating their shares. Still, in going public, Al Jazeera would be forgoing something that Sirius and XM lacked -- a sugar daddy in the person of the emir, who continues to finance Al Jazeera's losses.
So why would the company give up this sweet deal? Politics. According to the Times, the U.S. government is displeased with some of the things Al Jazeera broadcasts -- pictures of dead and kidnapped U.S. soldiers, first and foremost. And also propaganda tapes from al Qaeda. In the interest of international harmony, therefore, it seems the emir will now push this little bird out of the nest and see whether it can fly solo.
The question remains where, precisely, this bird will fly. The Doha Stock Exchange and a planned Cairo-based United Arab Stock Exchange have been suggested as possibilities. Last week, CNN pointed out that there are no apparent regulations that would prevent Al Jazeera from listing on the New York Stock Exchange. But to get the greatest combination of (a) access to foreign shareholders and their cash and (b) the least possible amount of round-the-clock picketing, a listing somewhere in Europe seems more likely. And the company's recent discussion of its IPO plans with the German business daily Handelsblatt hints strongly at a Teutonic listing.
All of which raises the question: Given the level of antipathy toward the network among many Americans (few of whom have even seen it) and among most Arab governments as well (even though Al Jazeera gets tens of millions of viewers from the Arabic world every day), should the company go public at all?
Yes. Indeed, it must. In fact, there's a pro-capitalist and pro-democratic argument for Al Jazeera to go public: State-controlled media is a bad idea. Media need to be free to criticize government. Yet Al Jazeera remains beholden to the Qatari government and so cannot operate freely. Unless or until Al Jazeera leaves the emir's nest, it has to be viewed as a mouthpiece for Qatari state policy. And more dangerously for the United States, so long as Arabs view Qatar as a U.S. ally, any Al Jazeera broadcasts that favor America will be viewed with suspicion and will give rise to accusations of U.S. meddling with Arabic media.
Consider also that most of the objections that people have to Al Jazeera are not unique to that company. You say propaganda, I say Air America and Fox News. You say tabloid journalism and bad facts, I say The National Enquirer and CBS. If Viacom (NYSE: VIA) and News Corp (NYSE: NWS) can trade freely, there's no reason Al Jazeera shouldn't, too.
Al Jazeera should be free. Al Jazeera must go public.
