ABS-CBN, TV5 pause landmark deal
MANILA, Philippines — ABS-CBN Corp. and TV5 have agreed to “pause” the completion of their landmark partnership that caught the attention of regulators and lawmakers who had lobbied for the non-renewal of the Lopez-led network’s legislative franchise.
In a joint statement on Tuesday, the two broadcast giants explained that their decision to take a break from closing a proposed investment by ABS-CBN for a minority interest in TV5 was meant to “address the issues which have been raised by certain legislators and the National Telecommunications Commission”.
TV5 is owned by Manuel V. Pangilinan’s media conglomerate MediaQuest Holdings Inc.
“This pause will give the space for both media organizations to respond to the issues, and accommodate any relevant changes to the terms,” the statement read in part.
Shares in ABS-CBN fell 1.95% on Wednesday following the announcement.
Under the deal, ABS-CBN will acquire 6.46 million primary common shares, equivalent to 34.99% of capital and voting stock, in TV5. The transaction is valued at P2.16 billion.
TV5 will use proceeds from the deal, totaling P4 billion alongside P1.84 billion convertible note in tow, to fund its capital and operating expenditures. Meanwhile, ABS-CBN could air some of its programs on TV5, giving it access to more audience for its content that the Lopez-led company has struggled to monetize since its painful shutdown.
READ: ABS-CBN ordered to go off air as franchise lapses
The landmark deal irked some Congress lawmakers, especially those who lobbied for the denial of ABS-CBN’s broadcasting franchise. At the same time, NTC Commissioner Gamaliel Cordoba said that ABS-CBN would have to “clear violations and obligations” before proceeding with its investment in TV5.
READ: ABS-CBN abides by tax, labor and corporate laws — gov't
Terry Ridon, a convenor at local thinktank Infrawatch PH, said the national government should allow the investment without any hitches.
“While we respect the decision of both TV5 and ABS-CBN to pause its closing preparations in its ongoing transaction in deference to Congress and the National Telecommunications Commission, we reiterate our view that the transaction does not require the prior approval of Congress as this does not involve the sale of controlling shares of TV5 to another entity,” he said in an emailed commentary.
Ridon reiterated that the investment did not violate any NTC regulation nor was it a competition concern.
“The new government should take notice that this transaction is entirely distinct from the franchise proceedings in the previous government, and if it is truly committed to its call for unity among our people, it should step aside and let this transaction proceed and allow all voices to be broadcast, no matter how inconvenient or discordant these voices may be,” Ridon added.
Similarly, both broadcast giants reiterated how the investment will be beneficial for the local media industry.
“Both ABS-CBN and TV5 believe that an agreement between the two media companies will have a favorable impact on Philippine media, and on free-to-air television—which remains the most affordable and extensive source of entertainment and public service to Filipinos,” their joint statement read.
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