Quo vadis, ABS-CBN?

By Art Jimenez

 

From the way the hearings of the House Committee on Legislative Franchises progressed, the ABS-CBN camp could have given up on their hope of getting its franchise renewed even as early as the eighth or ninth marathon session. They couldn’t have been more correct.

On July 10, the committee stamped “finis” with an exclamation point to the broadcast firm’s application for a fresh 25-year franchise. Seventy (70) out of 85 members (regular and ex-officio) present voted “Yes” to the rejection while only 11 voted “No.” Two inhibited; another abstained. Committee chair Franz Alvarez (Rep., 1^st District, Palawan) could vote only to break a tie.

Had the committee voted to renew the franchise, the application would be debated and voted upon in plenary by the full House (no pun intended) of 302 representatives. There the network stood a chance, no matter how slim. But of course, this was not to be.

So where does ABS-CBN go from here? Some say an MR (Motion for Reconsideration) is in order. Some “Cong” (short for Congressman) aver anyone of those who voted with the majority can file an MR. Others maintain, since the broadcaster is a private entity, then it can do so anytime. But that remains to be contested to kingdom come, to the disadvantage of ABS-CBN.

Yet assuming an MR is granted, then everything returns to the step-by-step process of enacting a law, which starts from a bill that passes through both chambers of Congress, and finally, signing into law by President Duterte. Will he approve or veto the bill? How much time will this consume?

If vetoed, the franchise proponents can reapply in the next Congress when Duterte is no longer president. That will be 2022. What if Mayor Sara succeeds her father?

Then there’s this brewing idea of a “people’s initiative,” which is, of course, org-, finance- and time-based. ABS-CBN need to fully support this lest the brew turns to bubbles.

All this time, ABS-CBN is shuttered and is limited to the YouTube format or whatever.

Meantime, quo vadis ABS-CBN as a corporation?

Let’s take a look at how the ABS-CBN share of stock performed at the Philippine Stock Exchange. In the last five days leading to its demise at the hands of the House Committee on Legislative Franchises, ABS (the network’s PSE stock symbol) dropped 5.62 percent in share value and a low 4.40 percent in the last month. Its stock dipped deeper south in the last three months by 13.57 percent and by -15.06 percent in the last 12 months.

On that fateful July 10, ABS opened quite enthusiastically at P15.20 per share (up from the previous day of P14.96) but closed at P14.78, the lowest since July 1. All told, only 8.2 million shares of ABS stock were traded from July 1 to 10.

Enter the Philippine Stock Exchange. Effective 9:00 a.m. the following Monday, January 13, the bourse suspended the trading of ABS shares as well as the Philippine Depositary Receipts (PDRs) issued by ABS-CBN Holdings Corporation.

Trading of both shares shall be lifted only one trading day after the ABS shall have fully disclosed “the impact of the non-renewal of its legislative franchise on the business, financial condition and operations of the Company, as well as its prospects and business plan moving forward, and such other material information for the investing public.”

Well, one impact is on the stock trading of ABS’s main competitor: GMA Network, Inc. Since ABS’s franchise expiration on May 4, GMA7 (stock symbol) price per share has gone up and its volume traded currently going some 12 million shares vs ABS’s 8.2 million shares exchanging ownership in 11 days.

Year to date, GMA7’s stock net value has gone up by an impressive 13.5 percent and lifted its market capitalization to P20.3 billion. A company’s market capitalization (or market cap) shows how much an enterprise is worth. It is derived by multiplying the current market price per share of its stock by the number of its outstanding shares.

Second serious impact is that with ABS a thing of the past, GMA7 threatens to become a monopoly with Channel 5 of MVP a very far second.

Third dramatic impact on ABS is right on its territory, which arises from cross corporate ownership and directorates. For instance, shares of the PSE-listed Lopez Holdings, Inc., the Lopez family’s holding and investor company has gone down by 7.9 percent while value of the family’s power and infra basket, First Philippine Holdings Corp., dropped by four percent, and its First Gen Corporation, by six percent.

With its army of legal eagles, business consultants, tax experts, and psychologists, I grant ABS’s capability to know where it’s headed.

But it better be soon,