TV5, ABS-CBN defer deal to answer NTC, House issues

Albay Rep. Edcel Lagman —INQUIRER FILE PHOTO

MANILA, Philippines — The return of ABS-CBN Corp. to free-to-air television will have to wait a little longer.

The Lopez family-led firm and TV5 Network Inc. on Wednesday announced that they “have agreed to pause” on the closing of their landmark deal, which was earlier set this month, that would allow ABS-CBN to return to free TV through a joint venture with the Manuel Pangilinan-owned broadcast enterprise.

In a joint statement on Wednesday, the media companies said they would evaluate and respond to issues raised by the National Telecommunications Commission (NTC) and legislators.

On Aug. 11, the parties disclosed the signing of their partnership that would elevate their existing block time agreement, which has allowed ABS-CBN shows to be aired via TV5. Under the agreement, ABS-CBN will acquire 34.99 percent of TV5 for P2.16 billion, with an option to raise this to 50 percent after eight years.

On the same day, the NTC said it was “monitoring developments” of the deal, with Commissioner Gamaliel Cordoba raising the need to look at the alleged violations of the Lopez firm that were flagged during its franchise renewal hearing in 2020, including tax payments and foreign ownership that ABS-CBN had refuted before.

In Congress, Sagip party list lawmaker Rodante Marcoleta delivered a privilege speech against the deal, after which three members of the House of Representatives separately filed resolutions seeking to investigate the alleged foreign ownership of TV5.

Marcoleta claimed that TV5 violated a NTC memorandum prohibiting a franchise grantee from entering into mergers with companies that have outstanding obligations to the government and without congressional approval.

‘Fight back’

He also claimed that ABS-CBN still owed the government billions of pesos in taxes, adding that the company did not have permits for digital broadcast and illegally sold millions of pay-per-view devices without NTC approval.

However, a lawmaker has expressed concern that another House inquiry “may result in the derogation of press freedom and free speech.”

In a letter addressed to Speaker Martin Romualdez, Albay Rep. Edcel Lagman stood by the two companies and said there was “absolutely nothing wrong” with the joint venture agreement they were planning to do.

“What is definitely errant is when authorities trample on the freedom of expression and of the press,” Lagman wrote Romualdez.

Lagman assured Romualdez that the deal was not a merger wherein one entity absorbed another to form a new one as defined under Republic Act No. 10667, or the Philippine Competition Act. It was also not an acquisition since ABS-CBN would not get control of TV5.

He added that he believed a partnership between both companies “would enhance fair competition in the television and broadcast industry.”

“Healthy competition will ensue as networks would compete for revenues and viewership,” he said. “Competition also improves quality of shows, news coverage, commentary and entertainment. Not even the current dominant network opposes the transaction,” he added.

A media scholar also urged both companies to “fight back and resist” efforts to undermine the deal and thus prolong ABS-CBN’s difficulties in getting back on air.

Danilo Arao, journalism professor from the University of the Philippines Diliman, urged both companies to assert editorial independence and proceed with the partnership instead.

He added that while ABS-CBN’s franchise has been denied, this should not prevent it from “exploring other legal means to have its content back on free TV and free radio… it’s not as if ABS-CBN is taking over TV5 operations.”

“For sure, their legal teams can attest to the legality,” he said. “It’s incumbent upon them to push back most especially at a time when the powers that be are exposing themselves as enemies of press freedom.”

Mockery of law

Arao added that the moves of certain legislators like Marcoleta as well as the NTC itself “show the audacity to harass and intimidate the media in the guise of alleged franchise violations.”

Infrawatch PH convener Terry Ridon, in a statement on Wednesday, said the transaction should proceed as this would not violate any regulation.

“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 [NTC], 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.

“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,” he added.

ABS-CBN, which used to be the country’s biggest TV network, failed to renew its franchise after its application was rejected during the previous administration by a House dominated by allies of then President Rodrigo Duterte.

The former president had criticized the network in 2018 for failing to air his campaign advertisements for the May 2016 elections and vowed that its franchise would not be renewed.

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