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Philippine Lawmakers Deny TV Giant ABS-CBN’s Franchise Bid

Bloomberg logo Bloomberg 7/11/2020 Andreo Calonzo
a close up of a girl walking on a city street at night: A pedestrian walks past the ABS-CBN Corp. Broadcasting Center at dusk in Metro Manila, the Philippines, on Tuesday, May 12, 2020. ABS-CBN, the Philippines' largest media company has asked the country's top court to halt a government order shutting its television and radio stations. © Bloomberg A pedestrian walks past the ABS-CBN Corp. Broadcasting Center at dusk in Metro Manila, the Philippines, on Tuesday, May 12, 2020. ABS-CBN, the Philippines' largest media company has asked the country's top court to halt a government order shutting its television and radio stations.

(Bloomberg) -- Philippine lawmakers rejected a bid by ABS-CBN Corp., the country’s largest media company, to secure a 25-year franchise, casting uncertainty over how the broadcaster will operate after two months of state-ordered shutdown.

A House of Representatives committee on Friday adopted a sub-group’s recommendation to deny ABS-CBN’s application. The company’s main television and radio stations have been shut since May when its franchise lapsed. The broadcaster can file an appeal, according to House rules, but it will be processed by the same panel. Seventy out of 84 lawmakers voted to deny the franchise bid.

“We remain committed to public service, and we hope to find other ways to achieve our mission,” ABS-CBN President Carlo Katigbak said in an emailed statement after the vote.

ABS-CBN shares have slumped 16% since May 5 when its television and radio stations went off air, while GMA Network Inc. rallied 26% to a two-year high on expectation its business will gain from its rival’s closure. ABS-CBN fell 2.6% at the 1 p.m. close of trading in Manila on Friday and the rejection of the franchise could cause the stock to collapse, said Rachelle Cruz, an analyst at AP Securities Inc.

ABS-CBN’s shutdown has affected 11,000 employees, and has cost the network as much as 35 million pesos ($707,000) in daily advertising revenues. The broadcaster’s “highly politicized” closure may deter foreign investments in the Philippine telecommunications sector, Fitch Solutions Inc. said in July 7 report.

Nail in Coffin


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Often the target of President Rodrigo Duterte’s attacks for alleged bias, ABS-CBN also has a pending petition before the Supreme Court questioning its closure. Duterte remains neutral on the issue and recognizes Congress’s sole prerogative on franchises, his spokesman Harry Roque said Friday.

“This is the final nail in the coffin,” said Manny Cruz, an analyst at Papa Securities Corp. “ABS-CBN should just wait for Duterte’s term to end before seeking a franchise for another application under the current dispensation will likely get rejected again.”

Media Company Attacked by Duterte Ordered to Stop Broadcast

Duterte has also attacked Philippine Daily Inquirer and Rappler Holdings Corp. for their reporting on his drug war that has killed thousands. The Southeast Asian nation ranked 136th out of 180 nations this year in Reporters Without Borders’ World Press Freedom Index, continuing a decline for the past three years under Duterte.

Human Rights Watch said Congress’ refusal to renew the permit of ABS-CBN “is a grievous assault on press freedom in the country” unseen since 1972 when the late dictator Ferdinand Marcos shut down the network and other media outlets. Vice President Leni Robredo said the decision will have a “chilling effect” on the press, leave thousands without work and hamper the flow of timely information.

House Speaker Alan Peter Cayetano on Thursday said the franchise decision is not about press freedom, but a check on businesses supposedly using public airwaves for private gain.

(Updates with Vice President Leni Robredo’s statement in ninth paragraph)

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