Felipe Gozon on GMA 7’s dividends, the elections and ABS-CBN’s shutdown

At 82, media tycoon Felipe Gozon is unstoppable. The chairman and CEO of broadcasting giant GMA Network was all smiles as he gamely talked about the company’s milestones and plans when we sat down recently for a virtual chat.

For nearly an hour, we discussed GMA 7’s hefty dividends, the changing media landscape in the Philippines, the elections, and how it’s been for the company nearly a year since its fiercest rival, Lopez-owned ABS-CBN lost its franchise.

There was indeed a lot to talk about.

But first I congratulated him on GMA 7’s inclusion in two new indices launched by the Philippine Stock Exchange – the PSE MidCap Index, designed to showcase mid-sized companies, and the PSE Dividend Yield Index, which highlights companies that consistently give high-yielding dividends.

I told him, however, that this wasn’t exactly surprising given that GMA 7’s dividends have been consistently stellar, as with its latest declaration of P1.45 per share – the highest since its 2007 stock market debut – the talk of the town now.

What does the inclusion in the two indices mean for GMA 7? Beaming with pride, his eyes visibly twinkling, Atty. Gozon said it’s a testament to the company’s commitment to its shareholders.

“It’s a recognition that we have been providing the return from their investment, cementing our position in the stock market,” he said.

“True to its promise, GMA’s dividend payout since its initial public offering in 2007 averaged above 90 percent of net income after tax and it is averaging at six percent per annum, based on the average price of P8.50 per share over the course of the 14-year period since it went public in 2007,” he said, noting that no bank can give a six percent yield these days.

How is the company able to do this? It tries every year to generate income through prudent implementation of projects, he said.

So it must be true what the industry grapevine says – that GMA 7 is one stingy giant.

This is indeed true, Atty. Gozon said nonchalantly. “We have been stingy and very prudent.”

In fact, he shared, big-ticket items go through a tedious three-step approval process – the budget committee, the execomm, then through the wringer.

It’s largely because the company prefers to use internally generated funds to finance its projects. Borrowings are kept to a minimum and mostly short-term loans, if any.

Elections

When I asked him about his thoughts on next month’s presidential elections and who he thinks will win, Atty. Gozon declined to talk politics, avoiding any mention of any candidate, not even in jest.

But the real winner in this year’s elections, I teased him, is GMA 7 because it cornered the lion’s share of political ads.

Atty. Gozon does not disagree. “We are now the dominant broadcasting company. I have to admit that. Even on the radio, not only on TV. These candidates need the eyeballs so they have to advertise in high rating programs.”

Winning the ratings war

Commenting extensively for the first time on ABS-CBN’s shutdown, Atty. Gozon said matter-of-factly that it’s been positive for GMA 7.

“It’s very significant. I have to be very honest. We cannot dismiss it as if it’s nothing. It’s really very significant in terms of our revenue and net income because, as I said, we are now the dominant (player). The ratings of our programs are high,” he said when I asked him about the impact of their rival’s disappearance from the airwaves.

Indeed, GMA 7’s net income reached a whopping P7.57 billion last year, up 26 percent. Advertising revenues surged 19 percent to P21.02 billion, with political advocacies amounting to “more than three quarters of a billion pesos.”

Filling the gap

Clearly, what happened to ABS-CBN cemented GMA 7’s position in the broadcast industry. But is this good for the Filipino viewing public, for us who consume news and information?

I raised this question, especially with many blindsided Filipinos in calamity-hit areas blaming the forced shutdown of ABS-CBN as the reason they were caught off guard when disasters struck their hometowns.

This is not true, Atty. Gozon said. GMA 7, he assured the public, has been filling the gap.

“We are reaching 83 million Filipinos. It’s very wrong. That’s fake news. I disagree very strongly because we are the first and most comprehensive (to report on these events now),” he said, adding that the news is reported both on TV and radio.

He acknowledged, however, that GMA 7 has yet to reach all the areas previously covered by ABS-CBN. “I cannot say we have reached every (area), but we are working on it.”

On selling GMA 7

With GMA 7’s stellar growth and dominant position now, are business tycoons again scrambling to buy into the company? We all know that attempts in the past by tycoons Ramon Ang and Manuel Pangilinan did not materialize.

Atty. Gozon says there are no offers for now.

But would its owners be willing to sell? “If the offer is good enough, why not?” he says.

Things, indeed, are certainly looking up for the broadcasting giant. I haven’t even discussed its planned Voltes V: Legacy yet, which is certainly good news for the Voltes V generation, myself included. Wait for it.

Iris Gonzales’ email address is [email protected].

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