GMA mulls legal option on PTV 4 revival

MANILA, Philippines - Publicly-listed GMA Network Inc. (GMA) believes that the country’s television industry is already crowded and is set to question in court the new law restructuring the operations of cash-strapped People’s Television Network (PTV-4).

GMA chairman and chief executive officer Felipe L. Gozon said in an interview with reporters that he could not understand the rationale behind the decision of President Aquino to revive the operations of PTV-4 considering that the industry is already crowded.

“Apart from Channels 7 and 2, the rest are losing money that is why I said the market is already crowded. As you see Channel 5 is already losing money and here comes another one subsidized by taxpayers’ money,” he lamented.

GMA operates Channel 7 while ABS-CBN Corp. of the Lopez family owns Channel 2 and TV5’s ABC Development Corp. is operated by Mediaquest Holdings Inc. of Philippine Long Distance Telephone Co. (PLDT).

GMA’s net income slipped five percent to P1.617 billion last year from P1.705 billion in 2011 on the back of higher expenses as revenues climbed six percent to P13.93 billion from P13.08 billion, while ABS-CBN earnings plunged 29 percent to P1.81 billion from P2.42 billion due to non recurring income in 2011 as consolidated revenues rose 13 percent to P31.7 billion.

Amid the heavy losses amounting to P2.8 billion in the first half of 2012, the PLDT group has earmarked P6 billion for the capital expenditures of TV5 this year.

Malacañang announced last week that President Aquino signed Republic Act 103901 providing P5 billion in additional capital infusion to PTV-4 over the next three years and allowing it to generate its own revenues through advertisements starting April 16.

Under the new law, the General Appropriations Act would allocate P1 billion to PTV-4 over the next three years starting next year while P2 billion would be sourced from the planned privatization of state-sequestered TV networks RPN-9 and IBC-13.

Gozon said GMA is now studying all legal remedies available to the company including bringing the case all the way to the Supreme Court.

“Now that it has been signed into law, I think we will have to study whether there’s a legal ground to invalidate that law,” he stressed.

He pointed out that it would be “unfair” for private companies like GMA that pay the correct taxes to subsidize the operations of state-run TV stations that would compete with them in terms of advertisements.

“It is a government station and the money that the government appropriates for the operation of that station partly comes from us as a taxpayer.  So, if that station is allowed to compete with us, I think you can easily see that it is our own money that’s being used to compete with us. That’s why we think it is unfair,” Gozon said.

He said it would be better for the government to allocate the funds to better use such as healthcare and education or solving the impending power shortage by investing in a utility firm such as Manila Electric Co. (Meralco).

“The government could put up hospitals and educational institutions or operate another Meralco that would be good for the consumers. But in the TV industry, we are already very crowded and here comes another one subsidized by taxpayers’ money,” Gozon said.