ABS-CBN not threatened by possible GMA7-TV5 merger

By Cathy Rose A. Garcia, ABS-CBNnews.com

Posted at Jun 21 2012 11:48 AM | Updated as of Jun 22 2012 05:54 PM

MANILA, Philippines - Media giant ABS-CBN Corp. is not threatened by the possible merger of its rivals GMA Network Inc. and Associated Broadcasting Company (ABC), operator of TV5.

Eugenio L. Lopez III, chairman and chief executive officer of ABS-CBN, said he does not think a possible GMA7-TV5 merger would change the landscape of the industry.

ABS-CBN not threatened by possible GMA7-TV5 merger 1
Eugenio L. Lopez III, chairman and chief executive officer of ABS-CBN (right), talks to Ma. Rosario "Charo" Santos-Concio, ABS-CBN president and chief operating officer, during the company's annual stockholders' meeting on Thursday.  Photo by Fernando Sepe, Jr. for ABS-CBNnews.com

"It doesn't change what we have to do. We're very focused on our own strategy. The number of channels that we have to compete against remains the same. As far as we're concerned, we just have to execute and we'll be okay," he said, in a press conference after the company's stockholder's meeting.

Business tycoon Manuel V. Pangilinan, who owns ABC, earlier said a deal to invest in GMA Network Inc. may be finalized within the year. The move is widely expected to result in the merger of the 2 networks, which will compete directly against ABS-CBN.

"Combining channels, programs is not going to lead to giving you an inordinate structural advantage. We are competing not only against channels but internet, hundreds of channels. It makes no difference to me if there's one owner or a hundred owners, we're still competing against all of them. That will not change regardless of what the equity structure is of those companies," Lopez said.

When asked if he believes the GMA7-TV5 deal would constitute a monopoly, Lopez said this would be an issue for the government to decide.

Lopez also emphasized that ABS-CBN is "not for sale," amid recent reports that San Miguel Corp. President Ramon Ang is interested in investing in the Philippine broadcasting industry.

Asked if anyone has approached the company, Lopez said: "I think my body language is very clear on that. I don't think anyone is approaching us."

On track to meet 2012 target

Meanwhile, ABS-CBN expects its first-half profit growth to be flat, but is still on track to meet its full-year net income target.

"It's close to flat. But we are sticking to our minimum target of P1.3 billion. We are on track for P1.3 billion," ABS-CBN chief financial officer Ronaldo Valdueza said.

Lopez said the second half is going to be "significantly better" than the first half, as the network continues to improve programming.

However, the increase in operating costs has put a drag on the company's profits.

"There has been significant improvement (in profit), but because of the competitive climate, operating costs has been going up. It's no secret we've had to increase our talent fees, which has had a significant impact on our overall profitability. The reality is if we did not have to increase our costs, we would show a significant increase this year... We feel our trajectory is correct and the second half would be significantly better," Lopez said.

ABS-CBN executives said the network continues to dominate the primetime slot and its noontime show is making headway in the ratings game.

"We're very optimistic the ad community would see that if you combine the ratings of both rural and urban, we have an inordinate increase over our competitors, whether singly or combined, ABS-CBN is way ahead of them," Lopez said.

Plans for soundstage, backlot

ABS-CBN President and chief operating officer Ma. Rosario "Charo" Santos-Concio said the company is finalizing the business plan to build a soundstage and several backlot facilities.

"We took the next steps in our vision to becoming the Filipino content provider of choice. We are in the process of finalizing the business plan for the building of a soundstage and backlot facilities for our future productions and talents. These are facilities that would enable us to have better production quality while saving on time and cost of location shootings," she said, during the stockholders' meeting.

Valdueza said the company will build the soundstage and backlot in Bulacan.

"We have acquired a lot somewhere in Bulacan, it's about 15 hectares. We have some consultants working with us. Hopefully, we will be able finalize the plans soon. We are hopeful we can build at least one soundstage within the year," Valdueza said.

One soundstage is expected to cost between P150 million to P200 million. ABS-CBN is planning to build at least 10 soundstages in the next 5 years.

"About 65-75% of all the shooting is location and with the soundstages, babaligtarin namin yan. Maybe about 30% would be location (shooting) and most of the shooting would be in soundstages," Lopez said.

ABS-CBNnews.com is the news website of ABS-CBN Corp.