By Beting Laygo Dolor, Contributing Editor
With its broadcast operations stopped after failing to get a renewal of its franchise to operate, ABS-CBN suffered a PHP3.9-billion (US$78-M) loss in the first half of the year.
The radio-TV network was already losing advertising revenue due to the coronavirus pandemic when it was forced off the air by the government last May after the House of Representatives blocked its bid for another 25-year franchise to operate.
Long considered the flagship of the Lopez Group of Companies, ABS-CBN posted the huge loss for the first half of the year, a stark reversal from the PHP1.46 billion (US$29.2 million) net income it earned for the same period last year.
While its broadcast and digital TV transmissions were issued cease-and-desist orders from the National Telecommunications Commission (NTC), ABS-CBN continues to maintain its news and entertainment presence via its online operations.
However, the online operations do not generate the same volume of advertising revenues as the broadcast and digital radio and TV stations.
Prior to its closure, ABS-CBN was the country’s number one broadcast network, with its main rival GMA-7 ranked a distant second. On third place is ABC-5 of the Manny V. Pangilinan Group of Companies.
According to ABS-CBN, the closure of its broadcast stations “in addition to the Covid-19 pandemic that the country is facing drove down both the advertising and consumer revenues of the company.”
From its digital platforms, the company’s revenues hit PHP685 million for the first semester, down by eight percent from the same period in 2019.
After the NTC issued a cease and desist order to the station, prohibiting free-to-air broadcast operations, “daily active users for iWant platform reached over one million and daily viewers of over 1.6 million,” the Company said in a statement to local media, adding that “this provided the Company an avenue to alleviate the shortfalls driven by the Covid-19 pandemic during the first quarter of 2020.”
Earnings of cable and broadband unit Sky Cable rose 10.4 percent year-on-year as broadband and direct-to-home subscribers went up by 56,000 and 405,000, respectively.
Its Kidzania and Studio Experience units earned PHP94 million (US$1.88 million) in the first semester of 2020.
Direct costs and expenses of the broadcast network totaled PHP16.7 billion (US$334 million), which was 11.4 percent lower compared to the same period last year. Production costs were down by 16.9 percent following the station’s decision to stop producing new content in the middle of the pandemic and cooperate with the government’s enhanced community quarantine efforts.
The network also shut down its Tulong Center, its corporate social responsibility arm which had been providing free legal and medical assistance to countless Filipinos over the past decades.
Unlike its other operating units, the Tulong Center was an expense rather than a profitable venture for the company.
As a publicly traded company, ABS-CBN was considered a blue-chip stock as it showed profits on a regular basis, until this year’s first ever declaration of loss.
The Company told stockholders that “a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern.”
For as long as President Duterte remains in power, it is doubtful that ABS-CBN can resume regular operations, as the Chief Executive had made it known that he wanted the station shut down for reportedly failing to air his ads that had already been paid for during the final months of his presidential campaign in 2016.
This year was the second time that ABS-CBN was shut down by the government.
The first time was when then President Ferdinand Marcos declared martial law and ABS-CBN was among the first media entities that was ordered closed. A crony of the president than took over the assets of the station and operated the network until Marcos was forced to flee the country following the EDSA 1 revolt.
The Lopezes regained control of their station immediately after.