End of TV5 deal highlights great uncertainty for ABS-CBN — analysts

MANILA, Philippines — After ABS-CBN Corp. and TV5 agreed to terminate their investment deal, analysts are wary of the economic fate of the Lopez family's media company under the new Marcos regime.

Robin Garcia, chief executive officer of Manila-based WR Group, said that part of President Ferdinand “Bongbong” Marcos Jr’s “legitimacy” comes from an implied campaign promise of policy continuity.

“I think there is no strong reason for President Marcos to allow the ABS-CBN deal to push through. A huge part of PBBM’s legitimacy comes from the promise of continuity of Duterte’s policies,” he said in an emailed commentary.

“It is also difficult for him to go against the deal because it might resurface a pivotal political memory from his father’s time where ABS-CBN was also shut down,” he added.

Lawmakers allied with the previous Duterte administration shut down the Lopez-owned media giant amid the pandemic by denying them a fresh broadcasting franchise, which left an estimated 11,000 media workers jobless.

Years after, ABS-CBN embarked on a long and difficult process to recover from the painful franchise denial which includes finding another platform where it can monetize its news and entertainment content. TV5, a property of Manuel V. Pangilinan’s media conglomerate MediaQuest Holdings, emerged as that platform that the Lopez-led network could use.

The now-terminated investment deal would have seen ABS-CBN acquiring 34.99% equity in TV5 and a convertible note agreement issued by the latter broadcasting company. TV5 would have utilized proceeds from the deal, totaling P4 billion alongside P1.84 billion convertible note in tow, to fund its capital and operating expenditures.

TV5 and ABS-CBN scrapped the investment deal amid opposition from the same House lawmakers who lobbied to deny ABS-CBN’s franchise in 2020.

Following the setback, the Lopez-owned broadcast giant told Philstar.com on Thursday that they will continue to “build and expand our digital and international businesses”, which include continuing work with their partners to distribute content.

Sam Ramos-Jones, director of operations for Philippine Strategic Associates, sees the deal’s end as “part of a larger problem of too much politics in business.” Prior to the shutdown, ABS-CBN was on the receiving end of former President Rodrigo Duterte’s attacks.

“Restrictions on foreign ownership and the congressional franchise system for media as well as other sectors create opportunity for political meddling that goes beyond proper regulation,” Ramos-Jones said in an email.

Uncertainty remains for the broadcaster, whose loss has been widely felt when natural disasters hit the Philippine countryside. The broadcast giant had various news bureaus across the country but was shuttered when their franchise was denied.

“ABS-CBN may opt to open a conversation with newly elected legislators or they may pursue a legal route. Otherwise it can be patient and wait for an opportunity but it is not in the near future,” WR Group’s Garcia said.