ABS-CBN Corp. on Friday said the shutdown of its free-to-air television and radio operations “will significantly impact” the company’s media, networks, and studio Entertainment (MNSE) operations which generate billions of pesos in annual revenues.
The Lopez-led media giant told the stock exchange that revenues from MNSE operations stood at P23.3 billion in the period ended September 2019. Of the total, P15.9 billion or around 68% came from free-to-air advertising.
ABS-CBN said on a consolidated basis, free-to-air advertising accounted for around 50% of the company’s consolidated revenue for the first nine months of 2019.
“The actual impact on MNSE operations is difficult to estimate at this point since it will depend, among other things, on the duration of the time its television and radio stations are off-air, and its ability to generate alternative sources of revenues to make up for the shortfall,” ABS-CBN said.
“Even as the impact of the COVID-19 pandemic on the Philippine and global economy is yet to be fully realized, the order will put additional financial burden on the Company,” it added.
ABS-CBN shut down its free-to-air television and radio stations last May 5, after the National Telecommunications Commission issued a cease-and-desist order against the company after its franchise expired on May 4.
ABS-CBN said it continues to produce and distribute content via active channels, including The Filipino Channel (TFC) and ABS CBN News Channel (ANC), which were not affected by the NTC’s order.
“The Company is exploring alternative means to reach its audience and substitute sources of revenues, such as but not limited to, expanding its digital platforms and developing new products,” it said.
It likewise maintains the operations of its cable, satellite, and broadband business, digital and interactive media unit, as well as consumer products and experiences segment.
ABS-CBN said it will continue implementing cost control measures, reducing general administrative expenses or overhead, and rationalizing capital expenditures.
It is currently crafting measures to protect the welfare and interest of its employees who are affected by the network’s shutdown.
The company said it will pay all its bank debts on time and committed to “honor all existing obligations for goods delivered and services rendered by its third party suppliers.”
As of end-September 2019, ABS-CBN sad its long-term debts amounted to P21.34 billion.
Last May 13, the House’s Committee of the Whole approved on second reading House Bill No. 6743 which grants the network a franchise until October 31, 2020.
Meanwhile, in Senate, two bills on its franchise are still pending. One bill seeks to grant the company a 25-year franchise, while the other will provide a provisional franchise that will allow its operation to continue until June 30, 2022.
“The Company is confident that it has not committed any violation of the terms of its franchise, permits, and licenses or any applicable law or regulations as to merit the non-renewal of its franchise or suspension of its broadcast operations as a consequence,” it told the stock exchange. — A.J. Ang