Former broadcast giant ABS-CBN continues to bleed

ABS-CBN Corp. said it would continue to seek partnerships with other companies that would allow it to air its content nationwide after it incurred significant losses in 2020 and the first three months of 2021.

ABS-CBN’s attributable net loss for 2020 stood at P13.46 billion compared with the previous year’s P1.62 billion.

Consolidated revenues declined 50% to P21.42 billion from P42.83 billion in 2019.

Broken down, advertising revenues dropped 69.2% to P7.06 billion from P22.94 billion, while consumer sales fell 27.8% to P14.36 billion from P19.89 billion a year ago.

ABS-CBN said the decrease in advertising revenues was attributable to the absence of the company in the free-to-air advertising space following the cease-and-desist order issued by National Telecommunications Commission on its broadcast operations on May 5, 2020 and the adoption of a resolution denying its franchise application by the House Committee on Legislative Franchises on July 10, 2020.

Voting 70 to 11, the House committee rejected the application for a franchise renewal of ABS-CBN — a media company critical of President Rodrigo R. Duterte — saying the broadcaster was “undeserving” of the privilege.

Mr. Duterte had openly harbored a grudge against the media company.

“Consumer sales was similarly affected by the cease-and-desist order as this prohibited the company in engaging in Sky Cable’s DTH (direct-to-home) services and distribution of TV Plus Boxes,” ABS-CBN said.

The company also closed down several ancillary businesses including Heroes Burger, Kidzania Manila and Studio XP due to the coronavirus pandemic.

It likewise implemented a retrenchment program last year. “In addition to the retirement costs, the company also provided additional separation benefits amounting to P1.1 billion during the year,” ABS-CBN said.

The company currently produces content and distributes programs through its partnerships with A2Z Channel 11 and TV5, Kapamilya Online Live on Facebook and YouTube, and streaming service iWantTFC, among others.

“Launching these platforms allowed the company to generate P1.01 billion in revenues mostly from the fourth quarter,” ABS-CBN said.

FIRST QUARTER
The company’s attributable net loss for the first quarter of 2021 widened to P1.95 billion from P763.30 million in the same period last year.

Consolidated revenues decreased 54.6% to P3.92 billion from P8.64 billion previously.

Broken down, advertising revenues dropped 78.3% to P929 million from P4.28 billion, while consumer sales fell 31.3% to P2.99 billion from P4.38 billion previously.

To mitigate the impact of the denial of the franchise application and of the coronavirus pandemic on its operations, ABS-CBN said: “The company has and will continue to pursue partnerships with various reputable companies that will allow the parent company to share its free-to-air produced content nationwide.”

“The parent company will closely coordinate with its creditor banks and negotiate for waivers of certain covenants as the need arises. Management believes that it will be able to satisfy the requirements of the creditor banks to retain the existing payment schedules, under the relevant loan agreements,” it added.

“The company continues to explore and intends to pursue all available remedies and courses of action, and will comply with relevant legal, regulatory and contractual requirements, to be able to sustain its current and future business operations, which do not necessarily involve broadcast only.”

ABS-CBN announced recently that it had reached a standstill agreement with its existing lenders.

ABS-CBN Corp. shares closed 0.34% lower at P11.60 apiece on Tuesday. — Arjay L. Balinbin