Philippine media giant ABS-CBN to retrench workers after government shutdown

16, Jul. 2020

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MANILA, NNA – Philippine media and entertainment conglomerate ABS-CBN Corp. will retrench some of its 11,071 employees at the end of August after lawmakers voted to shut down its television and radio stations last week.

Owned by a powerful family for nearly seven decades, the country’s biggest broadcaster has had run-ins with President Rodrigo Duterte who said last December that he would see to it that the network is "out".

Sealing its fate, a House committee dominated by Duterte's allies voted 70-11 on Friday against granting a new license for its free television and radio services.

In rejecting the company's application for license renewal, congressmen gave a litany of reasons such as tax evasion, unfair news reporting, abusive business and labor practices, foreign citizenship of its CEO and vulgar shows.

In a public disclosure on Thursday, ABS-CBN said it was “forced” to lay off an untold number of workers of its TV station and subsidiaries as the only way the rest of its staff could remain employed. The retrenchment figures could run in hundreds, if not thousands.

“We are doing all we can to mitigate the pain that will be felt by those affected, including paying out separation and retirement benefits and providing job placement programs,” the company said in a statement.

Philippine’s National Telecommunications Commission ordered the broadcaster to cease TV and radio operations on May 5 after its 25-year franchise expired on May 4.

In June, the regulator also ordered ABS-CBN’s cable TV subsidiary, Sky Cable Corp., to stop its direct broadcast satellite service Sky Direct nationwide. It also told the media giant to stop its digital broadcast on TV Plus in Philippine capital Metro Manila.

Popular with millions of viewers especially for its newscasts, ABS-CBN had been the most watched TV network and had the biggest audience share in the country in 2019, according to Kantar Media.

Observers had noted that advertising revenues from television helped sustain its other divisions but they were no longer growing with increasing online competition. The lockdowns to contain the coronavirus pandemic for several months had also hit most sectors including advertising.

Although the company can continue running shows on its cable and online networks, both were not making money, a senior executive told a news outlet.

Meanwhile, rival GMA Network Inc. looks set to become the country’s top TV station. Shares of GMA shot up by over 40 percent on Monday following the denial of ABS-CBN’s request for franchise renewal.

Activists and media practitioners have slammed the government's decision on ABS-CBN, calling it a move that threatened press freedom and a vengeance against the long-running company.

Duterte, who had repeatedly threatened to close down the broadcaster, accused it of unfair reporting and business practices such as refusing to air his paid campaigning advertisement in the 2016 presidential elections.

Calling the network “swindlers” and "thieves, Duterte said in 2018: “I will not let it pass. Your franchise will end."

This has led to accusations that the president had influenced lawmakers who voted against the franchise renewal. On Monday, presidential spokesman Harry Roque insisted that the president had “maintained a neutral stance on the issue.”

The network is owned by the Lopez family, an oligarchy that was once politically mighty.

One member even became a vice president of the country, while Gina Lopez, the late sister of ABS-CBN’s current chairman emeritus, was a cabinet member in Duterte's government.

This week, Duterte might have been referring to super-rich oligarchy families like the Lopezs when he told soldiers that “without declaring martial law, I dismantled the oligarchy that controlled the economy of the Filipino people”.