IRONING OUT | TV5, ABS-CBN hit pause on investment deal to respond to issues

August 24, 2022 , 02:59 PM

(August 24, 2022) – After the National Telecommunications Commission (NTC) and some lawmakers raised contentions, TV5 and ABS-CBN on Thursday announced that they would pause the closing preparations of their landmark investment deal to properly address the issues.

In an official statement, the two media networks maintained that the partnership would yield a positive impact on the country’s media landscape despite the concerns about its legality.

“This pause will give the space for both media organizations to respond to the issues and accommodate any relevant changes to the terms,” read the joint statement. “Both ABS-CBN and TV5 believe that an agreement between the two media companies will have a favorable impact on Philippine media and on free-to-air television.”

On August 11, the two companies announced their investment agreement which allowed ABS-CBN to gain 34.99% of the total voting and outstanding capital stock of TV5, amounting to P2.16 billion. But MediaQuest Holdings Inc., which owns TV5, maintained its status as the controlling shareholder as its equity stood at 64.79%.

Some lawmakers, including SAGIP Rep. Rodante Marcoleta, expressed opposition to the deal, citing a memorandum from the NTC that bars franchise holders from having “mergers” with companies allegedly facing obligations to the government.

Marcoleta was one of the lawmakers who staunchly pushed for the shutdown of ABS-CBN in 2020.

NTC commissioner Gamaliel Cordoba earlier said they would look into the said investment deal.

But Albay Rep. Edcel Lagman pointed out that NTC Memorandum No. 003-06-2022 was “constitutionally infirm, arbitrary, and vague.” He also cautioned that the legislative probe into the partnership between TV5 and ABS-CBN might negatively affect press freedom and free speech.

A lawyer by profession, the opposition lawmaker noted that the two companies have constitutional rights to enter into lawful contracts. He also believes that the memorandum constitutes “usurpation of legislative power” as it “imposes a restriction” that is not specified in the legislative franchise itself.

“The NTC memorandum is vague because it lacks the requisite standards for determining what is the nature, extent, and status of the so-called ‘outstanding obligations,'” said Lagman.

ABS-CBN lost its bid for franchise renewal two years ago after the panel on legislative franchises in the House of Representatives rejected it over alleged violations even though the Bureau of Internal Revenue and the Securities and Exchange Commission cleared the media giant of any liabilities.

Former President Rodrigo Duterte later admitted that he used his power to target the media network.

Lagman also echoed calls that the partnership would yield “healthy competition” in the media industry. He added that the investment agreement is not a merger because the ABS-CBN did not gain majority control over TV5.

“Competition also improves quality of shows, news coverage, commentary, and entertainment,” said Lagman. “There is absolutely nothing wrong with that arrangement. What is definitely errant is when authorities trample on the freedom of expression and of the press.”

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