As FOX International Channels Asia prepares to shake-up its legal adviser line-up, recently appointed general counsel Francis Chang talks to Elizabeth Broomhall about what he looks for in a law firm, the challenges of working in the heavily regulated Chinese market and why Amazon may soon become a key competitor

The FOX International Channels (FIC) Asia offices are what you might expect of a Silicon Valley company. Open-plan with white walls, framed posters and bright orange and lime green cushions – the space is designed to encourage inspiration and new ideas, while making employees feel at home. But a view of the harbour and Hong Kong Peak of course reminds you that this is not actually Silicon Valley, but Asia. 

Canadian-born GC Francis Chang is fairly new to the company, but, having previously worked for the Walt Disney Company and News Corporation, he is familiar with both Hong Kong and the entertainment industry, despite having spent the early years of his legal career specialising in mining and securities.

The Disney job in 1997 was his first in Asia, a position he "couldn't turn down". Disney was looking to launch several local channels around the region, and needed someone with experience in developing countries. "I had done some work helping set up JVs for mining projects in South America, Africa and Central Asia," he explains. "They were keen on working with someone who had knowledge of difficult markets with foreign ownership restrictions."

Two years later News Corporation-owned STAR TV came knocking, and Chang was intrigued. He spent six years with the company and was promoted to deputy general counsel, before returning to Canada in 2005 to take up a role as a partner for one of the 'seven sister' firms, Blake Cassels & Graydon. 

The opportunity to work for FOX saw Chang return to Hong Kong late last year. "Moving back wasn't part of our plan at all," he says. "But after the split between News Corporation and 21st Century FOX the organisation wanted to have someone in the role of GC for FIC Asia." 

Bulking up

Having been in the position less than six months, Chang is spending much of his time travelling around the region to the company's 14 offices, meeting colleagues and getting to grips with the needs of the Asian business. He currently has a team of 12 lawyers and three paralegals located across Delhi, Taipei, Tokyo, Singapore and Hong Kong, and is looking to add capacity in the company's biggest markets. Four lawyers, including Chang, are Hong Kong-based with a fifth joining shortly. 

"Certainly in the case of Taiwan and Japan those are very large and significant markets for us and so we are looking to have more senior lawyers there to help the local management teams," Chang comments. "[We also need] to hire in new markets as they get to a certain level of activity. We are currently looking at adding someone in the Middle East, and within the next three to four years I would also like to see two lawyers in one of the Southeast Asian markets, perhaps Indonesia or the Philippines."

The 'bread and butter'one-harbourfront-web

Day-to-day work for the lawyers – each of whom has a practice specialism and regional focus – is mostly intellectual property (IP) and management of contracts, ranging from content acquisition agreements to those covering the company for original production of major programme brands.

"A lot of our content is acquired from distributors or other rights-holders," says Chang. "So we have one-off deals [where we acquire a particular series or set of movies] but also output or multi-year deals for a significant amount of programming, which are much more involving. We also acquire content from Chinese studios and Hong Kong-based movie production companies."

For original production work, FOX will typically have agreements with overseas production houses granting it the rights to produce its own version of a TV show. For example, the broadcaster recently acquired the rights to produce the Asian version of America's Next Top Model, which, as well as initial contract work for securing the rights, involved Chang's team drawing up agreements to cover the production, talent hiring and advertising time.

Meanwhile, Chang refers to IP as the legal team's "bread and butter". Beyond this the lawyers are also expected to deal with employment issues, the setting up of offices and any litigation, while major corporate or M&A transactions tend to be handled in conjunction with the holding company, 21st Century FOX. 

Another key priority is to keep on top of regulatory developments within the media sector, and particularly existing regulation affecting the company's ability to distribute channels or air programmes in countries such as India or China.

"China is a heavily regulated market. We have landing rights for a number of our National Geographic channels as well as on the sports side, but they are very much restricted to hotels and basically foreign compounds, so we're in the same position as other foreign broadcasters. Certainly we can syndicate certain programmes that would be broadcast on a local domestic channel, but China remains a strict market to work in."

Equally important are industry changes affecting how people consume programmes. "iTunes, Hulu and Netflix have become very successful, and companies like Amazon are effectively trying to get into the same areas we are," explains Chang. "Tablets, smartphones and computers are all also presenting very different models and ways of getting content to viewers."

francis-chang-webA firm choice

As for external legal counsel, Chang says he is currently reviewing the list of advisers in Asia to ensure the company is being properly advised at the best rates. He expects to create an informal preferred supplier list, as opposed to an official panel, to include approximately 12-14 law firms, some of which will be used for country-specific matters while others will be relied on for their practice specialisms. FOX has previously typically used outside firms for IP, employment, media regulation, litigation, antitrust and data privacy work, but is also now looking to outside counsel for advice on the Foreign Corrupt Practices Act (FCPA) and compliance.

"We're looking at engaging with several firms to see what their different capabilities are… I want to consolidate the use of firms," he explains. "We don't want a structure that is too formalised, but I do want to know before any firm is engaged what the rates and terms are." 

Chang is particularly keen to tap law firm expertise on compliance with the FCPA. "Being a public company listed in the US – that's a very big component of the legal work." 

The adviser selection process will involve speaking to FOX counterparts in Europe and Latin America to get their experiences, while Chang will also look to local advisers with skills unique to certain markets. Global outfits used in the past in Asia and elsewhere include magic circle firm Allen & Overy, tech specialist Bird & Bird and Baker & McKenzie. 

"I would be most comfortable with using one or two firms in each market," says Chang. "My personal preference is to get re-acquainted with the local firms that have strong local expertise and contacts… [but there] will likely be a mix – there are international firms that have very strong local offices. Also for some [cross-regional] issues, for example data privacy, there are definitely some global firms that are much better placed to advise us."

He concludes: "Working in the television industry is fascinating: once you've worked in it for enough years you feel like it is part of your DNA. So it's great to be back and to be constantly thinking about how we can do this better. To me that's most of the fun."

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FOX International Channels: a brief history

Fox International Channels (FIC) is a subsidiary of FOX Networks Group. It was News Corporation's  international multi-media business, becoming part of 21st Century FOX (along with the entertainment companies) when News Corporation split in June 2013.

The Asian unit, which includes the Middle East, came about in 1993 with the launch of FOX in Japan, and was expanded in 1997 with the launch of the National Geographic channel in Australia. In 2009 the English-language channels owned by STAR TV – another News Corporation operation – became part of FIC Asia while the rest of the business was divided into STAR India and STAR Greater China. 

In November 2012 News Corporation acquired Disney's stake in Singapore-based ESPN Star Sports (ESS), allowing FIC to add the Asian cable sports network to its portfolio, which it has since renamed to FOX Sports Asia. FIC Asia now operates or distributes more than 30 channel brands in the region, including the FOX, STAR and National Geographic brands, across 14 markets.

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Tuned in: Francis Chang

2013 – joined FOX International Channels in Hong Kong as senior vice president for legal and business affairs and general counsel for Asia-Pacific and the Middle East

2008 – became a partner at Blake Cassels & Graydon in corporate, technology and communications

2005 – moved back to Canada to join Blake Cassels & Graydon as as associate counsel

2001 – promoted to vice president and deputy general counsel

1999 – joined STAR TV in Hong Kong as senior counsel

1997 – joined Walt Disney in Hong Kong as regional manager of legal and business affairs, having trained, qualified and practised in Vancouver, Canada with Stikeman Elliott, specialising in mining and securities