Beleaguered media giant ABS-CBN Corp. on Thursday outlined its plans to continue its business sans a legislative franchise to operate free-to-air broadcast.
In a disclosure to the Philippine Stock Exchange, ABS-CBN said it planned “to continue to operate in other businesses that do not require a legislative franchise, such as, international licensing and distribution, digital and cable businesses, as well as, continue with the syndication of content through various streaming services.”
On July 10, the House Committee on Legislative Franchises voted to deny the franchise application of ABS-CBN.
The panel adopted the Technical Working Group’s (TWG) Committee Resolution recommending the denial of the network's franchise application through 70 yes votes, 11 no votes, and three who did not participate.
ABS-CBN went off air on May 5 after the National Telecommunications Commission issued a cease and desist against the network for lack of franchise.
“The Company takes into consideration the probable shift of consumer behavior in terms of accessing content, as well as, the ever-changing technology available to the public,” ABS-CBN said.
“Likewise, the Company takes into consideration the impact of COVID 19 in other business segments,” it said.
The media company said its news and other content are accessible through digital platforms such as its social media pages, YouTube channel, iWant app, and on cable TV.
The ABS-CBN said it has adopted and continues to implement cost control measures, reducing general administrative expenses (GAEX) or overhead, rationalizing capital expenditures, and streamlining its manpower requirements as discussed below.
“Given the reduced operations, the Company is reviewing its current business models, structures, processes and systems, for a more agile, efficient and effective organization,” it said.
“The Company will focus on businesses that will generate growth in revenues and is reducing investments in non-core activities,” it added.
ABS-CBN has recently announced the closure of KidZania Manila due to conditions brought by the COVID-19 pandemic.
The Lopez-led media giant noted that ABS-CBN and its creditor banks are confident that with the proper security in place, its obligations to its creditor banks will be satisfied in accordance with the existing terms of, including payment schedules, under the relevant loan agreements.
In terms of the impact of the franchise denial, ABS-CBN explained that its free-to-air business in the country accounted for 68% of the company’s revenues for the un-audited period ended September 30, 2019, which amounted to P15.9 billion.
“The Resolution significantly affects the company’s Media, Networks, and Studio Entertainment (MNSE) operations, specifically the Company’s free-to-air business in the Philippines,” it said.
On an unaudited consolidated basis, free-to-air advertising was approximately 50% of ABS-CBN’s unaudited consolidated revenue for the period ended September 30, 2019.-NB, GMA News
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