GMA won't abandon expansion plan amid buyout talks-A A +A
Wednesday, August 22, 2012
BROADCAST giant GMA Network will roll out two originating stations in Luzon and Mindanao in the coming years to boost its nationwide leadership in ratings, which in turn, fuel the company's revenue.
Holding off on the expansion plan just to wait for the merger with third-running TV5 will only cause adverse effects for the company, which is trying to stay ahead of perennial rival ABS-CBN Corp., said chairman and chief executive officer Felipe Gozon.
"If you are in our place and you are not sure that the deal will push through, aren't you going to do the same? Every delay will adversely affect our company. Why will we let our future depend on the buyer?" he told reporters on Wednesday.
Manny Pangilinan, TV5 chairman and head of the Philippine Long Distance Telephone Company (PLDT), earlier said there is an ongoing negotiation to buy GMA but the official price range has not yet been made public.
Gozon confirmed this to reporters as they chose to adopt a wait and see attitude.
"Everything else will be speculative and it's unfair because we are now listed unlike before and whatever we say here may affect the decision of the investors in the stock market," he said.
Since the speculation about the merger came late last year, GMA's stock price went up from P6.50 on December 27, 2011 to a record-high of P11 last July 3. It settled to P9.98 on Wednesday, just a fifth of a percent lower than the previous close of P10 last August 17.
Trading at the Philippine Stock Exchange (PSE) was closed on Monday and Tuesday because of national holidays.
GMA president and chief operating officer Gilberto Duavit declined to say, which areas will hold the additional originating stations although he hinted at installing these in Eastern Luzon and Northern Mindanao.
These stations will be equipped with microwave and satellite facilities and active news gathering systems capable of delivering news coverage within the originating or neighboring provinces that can be aired locally or nationwide.
So far, regional stations contributed less than 5 percent to GMA's bottomline, thus the need to increase viewership levels.
In June this year, GMA opened its P115-million originating station in Ilocos region that services over 218,000 estimated television households. Recently, the company launched another originating station in Bicol worth P160 million.
GMA Bicol, which will have a daily vernacular news program by September 14, is now seen in Camarines Sur and Albay but will soon be available in Sorsogon, Masbate and Catanduanes for an estimated coverage of 805,000 households.
GMA also has stations in Cebu, Davao, Iloilo and Dagupan.
"If the deal pushes through, then the buyer will get the benefit, that makes the company more valuable and we don't mind if the buyer benefits from what we are doing," Gozon said.
The sale of GMA to the PLDT group nearly occurred in 2001 with the signing of a Memorandum of Understanding between parties.
It failed to materialize, however, due to issues encountered by the buyer, and not because of a disagreement on the indicated P14 billion-price, GMA earlier said.
GMA, which posted a net profit of P1.1 billion in the first half of 2012, leaned on its leadership in nationwide ratings.
Based on Nielsen’s National Urban Television Audience Measurement (Nutam) data for the second quarter, GMA posted an average total day household audience share of 35 percent, 4.2 percentage points higher than ABS-CBN’s 30.8, and 20.6 percent higher than TV5's 14.4 percent.
Gozon said the company is on track of reaching its full-year profit target of P2.8 billion, which will be partly drawn from political advertisements late in the year. The Philippines will hold its midterm elections in May 2013.
"I'm afraid we'll be meeting P3 billion," he said in jest. (Virgil Lopez/Sunnex)