MANILA, Philippines—Losses of television network TV5 continued to accelerate as of the first half of 2012 as the country’s third-biggest broadcast firm ramped up spending to be more competitive with industry leaders.
According to official documents filed by its parent, ABC Development Corp., the company lost P1.37 billion at the end of the first quarter and an additional P1.46 billion at the end of the second quarter. All told, TV5’s losses for the first half of 2012 amounted to P2.83 billion, raising the possibility that the network would exceed the P4.1-billion net loss it reported for 2011.
The sharp increase in losses of the network controlled by businessman Manuel Pangilinan comes in the wake of TV5’s failed attempt to acquire the country’s No. 2 player, GMA Network Inc., in a bid to battle industry giant ABS-CBN Broadcasting Corp.
Talks between the Pangilinan group and GMA Network’s controlling shareholders—the Gozon, Duavit and Jimenez families—for the reported P52-billion takeover were terminated recently after both sides failed to agree on terms that they described as non-financial in nature.
According to the documents, TV5 reported total revenues of P784.6 million during the first half of 2012. This was dwarfed by the network’s production costs for the period of P2.37 billion—already representing two-thirds of the full 2011 level—which, together with P19 million in non-operating income, resulted in a gross operating loss of P1.56 billion for the first semester.
No comparative figures were available for the same period last year, but the network’s revenues for the whole of 2011 stood at P2.31 billion while production costs amounted to P3.76 billion.
A broadcast industry source told the Inquirer separately that TV5 has so far experienced a 53-percent increase in airtime minutes for the first nine months of 2012, but noted that the growth was not matched by a corresponding increase in revenues.
“It appears like [they’ve implemented] a ‘buy one, take five free spots’ scheme,” the source said.