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BY JOHN REINER M. ANTIQUERRA
ANUEL V. PANGILINAN (MVP) has brought his huge ϐinancial resources to bear on telecommunications, power generation and distribution, mining, infrastructure and high-end health care services. He is arguably the most powerful force in Philippine business today. But in the world of powerful media, Pangilinan’s name may not be as big as those of his precursors in the ϐirst years of the postMarcos era. The Lopez family recovered its ϐlagship media enterprise, ABS-CBN, almost immediately after the fall of the dictatorship. Others in the same league are Emilio Yap, who gained control of the Manila Bulletin; the Prieto family, which bought the Philippine Daily Inquirer from founder journalist Eugenia Apostol in 1994; the Belmontes who held the majority stocks of The Philippine Star; or Felipe Gozon, Joel Marcelo Jimenez, and Gilberto Duavit Jr. who bought GMA-7 in 1975 from Robert La Rue Stewart. In a class by himself was the late Raul Locsin, a journalist whose BusinessWorld held a special niche as the leading business paper in the country. Pangilinan’s holdings in media companies have nevertheless gained him an impressive edge. The control he exerts over the range of corporate interests has also stirred the curiosity of political observers who wonder about the purpose of this media focus.
Like Pangilinan, other media owners have interests in other enterprises. The Lopezes have retained holdings in telecommunications, power generation and distribution, and real estate. The Gozons are also in banking and real estate. The Prietos are in real estate, services and publishing. Yap has business holdings in shipping, banking, services and education. The Manila Electric Company (Meralco) was impressive enough to draw Pangilinan’s roving interest. Pangilinan bought Meralco from the Lopezes in 2009. The picture today is not far removed from the media landscape before Marcos shut down the free press in the country in 1972. It is “media mogulry” redux, except that this time the competition is greater and the stakes higher, with media providing the double edged blade of economic and political clout. MVP’S MEDIA GROUP MediaQuest Holdings is incorporated under the retirement fund of the Philippine Long Distance Telephone Co. (PLDT) handling the media accounts of the Pangilinan-group. Its subsidiaries Satventures Inc. and Hastings Holdings, Inc. deal with broadcast and print assets respectively. It has holdings in TV5, and in the newspapers BusinessWorld, the Star and the Inquirer.
48 | MEDIA TIMES 2013 • Center for Media Freedom & Responsibility
The PLDT said in its annual report for 2012 with the Securities and Exchange Commission that “on March 14, 2013, ePLDT made a deposit of Php750 million for its investment in Satventures and Hastings PDRs (Philippine Depository Receipts) of MediaQuest.” “The PLDT Group’s ϐinancial investment in PDRs of MediaQuest is part of the PLDT Group’s overall strategy of broadening its distribution platforms and increasing the Group’s ability to deliver multi-media content to its customers across the Group’s broadband and mobile networks.” Pangilinan’s entry into the Philippine business sector was through the investment of Hong Kong-based First Pacific Company Ltd. in PLDT in 1998. In late 2009, MediaQuest acquired the third largest private broadcast media player ABC-5 from Antonio “Tonyboy” Cojuangco. It rebranded ABC5 into TV5 with an aggressive positioning that projected it as a competitive force against top television networks ABS-CBN 2 and GMA-7. MediaQuest had been in the cable TV business prior to Pangilinan’s entry into PLDT and has gained entry into other media entities like BusinessWorld and the National Broadcasting Corporation which operates several radio stations in the country. But Pangilinan’s acquisition of ABC-5 marked his entry as a competitor in the media business. The company redeveloped programming, aggressively hiring from the ABS-CBN 2 and GMA-7 stables of broadcast journalists, celebrities and executives. But the not-so-new kid on the block had little to offer that was really new or fresh enough to steal the lead from either ABS-CBN 2 or GMA-7. Audience loyalty is pretty much cast in habit and TV5 has had to struggle to keep even its third place ranking. As the excitement and buzz over TV5 leveled off, Pangilinan moved to acquire GMA-7 in 2012. But negotiations have hit a dead end. Meanwhile, the ownership composition of PLDT is being questioned anew with lawyer Jose Roy III, former dean of the Pamantasan ng Lungsod ng Maynila College of Law, asking the Supreme Court to reinvestigate PLDT for its alleged violation of the constitutional limit on foreign ownership of public utilities. The abs-cbnNEWS.com reported that Roy also asked the Supreme Court to “order the SEC to investigate all corporations in which the PLDT Beneϐicial Trust Fund has made investments in and to determine whether these corporations and their subsidiaries also violated the foreign ownership cap.” (“SC urged to order new probe into PLDT’s foreign ownership,” June 11, 2013, http://www.abs-cbnnews.com/nation/06/10/13/scurged-order-new-probe-pldts-foreign-ownership) The 1987 Philippine Constitution reserves at least 60 percent of ownership and management of public utilities for Filipinos. It also limits ownership and management of mass media only to Filipino citizens. TAKING OVER BUSINESSWORLD This year, the Pangilinan group moved to take control of two dailies, with MediaQuest acquiring majority stocks in BusinessWorld and the Star. BusinessWorld’s employees owned about 70 percent of the company’s stocks. The founder of the paper, Raul Locsin, had made sure of it to assure the editorial independence of the paper. On September 17, BusinessWorld reported that MediaQuest through Hastings would be owning 76.67 percent of the stocks of BusinessWorld Publishing Corp. (BWPC) and infusing PHP100 million into its operations in the next 12 months. (“MediaQuest assumes control of BusinessWorld,” http://www.bworldonline. com/content.php?section=TopStory&title=Mediaquestassumes-control-of-BusinessWorld&id=76584)
Center for Media Freedom & Responsibility • 2013 MEDIA TIMES | 49
MEDIA MOGULRY REDUX
BusinessWorld’s shareholders had earlier approved an increase in capital, Pangilinan was quoted as saying in a June 14 report on InterAksyon. (“PLDT Group seals takeover of BusinessWorld,” June 14, 2013, http://www.interaksyon.com/business/64096/pldt-groupseals-takeover-of-businessworld) This was further conϐirmed in an August 7 Star report, which said the MVP group had formalized the acquisition of the majority stake in BusinessWorld with the infusion of fresh capital. (“MediaQuest gains control of BusinessWorld,” http://www.philstar.com/business/2013/08/17/1098901/ mediaquest-gains-control-businessworld) Ray Espinosa, former president of TV5, told the Star that “MediaQuest has exercised its pre-emptive right to subscribe to 30 million new shares of BusinessWorld. MediaQuest has also agreed to subscribe to 70 million new shares of BusinessWorld, which were not taken up by other shareholders.” (“MediaQuest gainst control of BusinessWorld,” August 17, http://www. philstar.com/business/2013/08/17/1098901/mediaquestgains-control-businessworld) The MVP group had acquired a minority stake in BusinessWorld in 2004. Prior to the acquisition, MediaQuest held only a 30 percent share in BusinessWorld. (Business and beyond, July 5, 2013, http://www.bworldonline.com/content.php?section=Spe cialFeature&title=Business-and-beyond&id=72929) The BWPC board also approved the appointment of Ray C. Espinosa, the former president of TV5, as chairman, while Barbara Locsin and Arnold Belleza were replaced as directors. Belleza will remain as executive editor, while Locsin will join the board of advisers. Publisher and chairman of the editorial board Vergel O. Santos was earlier retained. But Santos ϐiled his resignation. (See sidebar “BusinessWorld Changes Hands: The End of an Era.”) THE PHILIPPINE STAR In late 2012, Pangilinan announced his revived interest to increase his stake in the Star, conϐirming to members of the press that his group was engaged in talks with the Belmonte family, the majority stock holders of the news daily. (“PLDT pushes plan to raise stake in ‘Star’,” Dec. 19, 2012, http://www.businessmirror. com.ph/index.php/en/news/top-news/6086-pldt-pushes-planto-raise-stake-in-star) The MVP group was looking to acquire 80 percent of the Star, said Mike Toledo, head of the Pangilinan group media bureau. He told the Inquirer that “the group will also control afϐiliates of the Star. This is part of the MVP group’s convergence strategy and evolution into a multimedia service company.” (“Pangilinan group to acquire Philippine Star,” July 20, 2013, http://business.inquirer. net/133497/pangilinan-group-to-acquire-philippine-star) The MVP group already owned 20 percent of The Star Group of Companies which publishes the news dailies the Star and Pilipino Star Ngayon as well as the lifestyle magazine People Asia. It also publishes the Cebu-based newspapers The Freeman and Banat News. MVP’s efforts to acquire the Star ϐirst made headlines in January 2009. ABS-CBN-GLOBE NETWORK SHARING DEAL Meanwhile, corporate mergers continued in other areas of the news media, as ABS-CBN clinches partnerships with a telecommunications and an online service company. On May 28, ABS-CBN Convergence, Inc., a subsidiary of ABS-CBN Corp., told the Philippine Securities and Exchange Commission that it had signed a network sharing agreement with Globe Telecoms which they said would enable ABS-CBN to deliver “content and offer traditional telecoms services on mobile devices.” In a press release, ABS-CBN said that “through the networksharing agreement, Globe will provide capacity and coverage on its existing cellular mobile telephony network to ABS-CBN Convergence on a nationwide basis. The parties may also share assets such as servers, towers, and switches.” The Lopez-owned telco Bayan Telecommunications, Inc. is under a debt restructuring plan with Globe. Globe said that the Pasig City Regional Trial Court Branch 158 had allowed the amendment of the plan converting 69 percent of Bayan’s debt to 56.6 percent of Bayan’s capital stock for Globe. ANC-YAHOO CONTENT PARTNERSHIP Meanwhile, cable channel ABC-CBN News Channel (ANC) and online search engine and web service group Yahoo! Philippines announced on July 18 a content partnership. The partnership allows ANC to push its content online through a dedicated microsite (http://anc.yahoo.com) in the Yahoo! platform. The page went live on July 22 for the coverage of the fourth State of the Nation Address of President Benigno S. Aquino III. Yahoo! Philippines country manager and editor Kate Delos Reyes said in an InterAksyon report that “This partnership is a true online and on-air collaboration that aims to reinvent how consumers access news across screens.” (“ANC, Yahoo! Phils forge content partnership, July 18, 2013”, http://www. interaksyon.com/business/66682/anc-yahoo-phils-forgecontent-partnership) Yahoo! has a separate news service in the Philippines which also carries content from other local news organizations. The content partnership with ANC is the ϐirst outside the US, said Yahoo! Philippines. OTHER SOURCES:
• Timeline: PLDT acquisition talks with GMA7. Oct. 4, 2012. Retrieved from http://www.interaksyon.com/business/44729/ timeline-pldt-acquisition-talks-with-gma7 • Pangilinan, M. (April 9, 2006). My journey. Retrieved from http:// philstar.com/sunday-life/330648/my-journey • GMA Network, Inc. Corporate Proﬁle. Retrieved from http://www. gmanetwork.com/corporate/about/overview • Philippine Daily Inquirer History. Retrieved from http://inquirer. dqs.com.ph/index.php/about-us/history • Metro Paciﬁc Investments Corp. website. Retrieved from http:// www.mpic.com.ph/site/ • First Paciﬁc Company Ltd. Website. Retrieved from http://www. ﬁrstpaciﬁc.com/ • Lopez Holdings Corp. website. Retrieved from http://lopezholdings.ph/ • SEC reports and PSE disclosures of one or more of the following: GMA Network, Inc., MediaQuest Holdings Inc., ABS-CBN Corp., PLDT, BusinessWorld Publishing Corp., Inquirer Publications Inc., Inquirer Holdings Inc., Phil Star Daily Corp., Manila Bulletin Publishing Corp.
50 | MEDIA TIMES 2013 • Center for Media Freedom & Responsibility
BUSINESSWORLD CHANGES HANDS:
BY VERGEL O. SANTOS The takeover of BusinessWorld by the magnate Manuel V. Pangilinan signiﬁes the end of an era. In fact it’s the only era BusinessWorld has known, one that began 26 years ago — or twice as far back if you counted the years of its forerunner, Business Day. It’s been a time deﬁned for both newspapers by their founder, publisher, editor-in-chief and major owner, Raul L. Locsin, who left upon his death, on May 24, 2003, at age 71, a legacy that owes its self-sustaining power to the force of his conviction and personality. Locsin was a begrudged ideal indeed: Newspaper was his only business, his only profession, nay, his life. And his was a life lived by a vow reafﬁrmed every publishing day above BusinessWorld’s masthead: “A newspaper is a public trust.” As he thought only beﬁtting the nature of his enterprise, one of snap judgments — a paper brought out every weekday morning for businessmen expecting to ﬁnd in it news to clue them into their workday — he presided over it closely and with a rather strong hand. But the handsome, straight-backed six-footer who rode a mean motorcycle that he was, he inspired romantic notions about a leader such as the sort you follow to battle, and doubtless the biggest battle he fought, for 14 years, was against martial law, which he did with, by his account, “brinkmanship.” Being a specialist and essentially nonpolitical paper, lying thus outside the notice of the masses the dictator Ferdinand Marcos worried about, Business Day enjoyed some tolerance. In fact “Marcos found it useful sometimes,” said Locsin, who liked to tell how Marcos pointed a tough-questioning American reporter to Business Day to illustrate the latitude he allowed the press. Not of any comparable historic signiﬁcance, but involving a singular challenge all the same, another case happens to have to do with the once monopolistic telephone company Pangilinan now controls, although it all happened long before his time. The Philippine Long Distance Telephone Company boycotted Business Day in apparent retaliation for a series it had begun to run about it. Offering three months later to resume advertising, it was told to wait for the same length of time it had stayed away, which it did, without arguing. It is such ﬁghting precedents that set Business Day’s successor along. Despite his severe sense of ethics — viewed by some of his own followers as “mere pickiness,” as it applies for instance to political advertisement, a ban on which eschewed a sizable income — Locsin made a consistent proﬁt for BusinessWorld, failing only, and understandably, in its ﬁrst year. Willed to its employees, making it effectively a cooperative, but cast in a market increasingly driven by a technology particularly unfriendly to newspapers and other print products, BusinessWorld still managed a proﬁt — until the last two years. Thus pressured to change with the times, yet afraid to go into debt for the money they needed for new capital, Locsin’s inherently unentrepreneurial inheritors decided to cede their newspaper to Pangilinan, who had become the partner with the ﬁrst option when he acquired the shares Iñigo Zobel had come to upon the death of his father, Enrique. Unnecessarily but hugely symbolically, Enrique Zobel had insisted on executing a document leaving Locsin alone to do as he wished with BusinessWorld. He may have owned a mere third of it to Locsin’s two-thirds, but his stature in the world of business and industry reﬂected a measure of power and inﬂuence comparable with that of but a few peers. He professed a great admiration for Locsin, but he said his signed concession had to do less with that than with a well-understood principle of editorial independence. To expect, let alone demand, a similar gesture of Pangilinan might seem unfair, but neither would it be unreasonable to feel skeptical about his sense of media proprietorship. Itself a practical virtue in the news business, skepticism gains plausibility in his case considering alone his place in the scheme of things. Pangilinan is a major or otherwise inﬂuential partner in a considerable spread of sectors, mostly critical: telecommunications, power, water, roadways, railways, mining, hospitals, property, construction and ﬁnancial management. That makes him a regular news subject as well as advertiser, thus possessing the potential for undue inﬂuence on the media and consequently on public opinion, a potential increased yet by his media acquisitions. Even before landing BusinessWorld, Pangilinan already had bought into the frontrunners on the newspaper market — 10 percent in the Philippine Daily Inquirer and at least 20 in The Philippine Star. And with a broadcast network already in his possession — ABC-5 — he had offered yet to buy GMA-7, one of the only two proﬁtable networks, the other being ABS-CBN 2; the deal didn’t pan out. At any rate, the challenge has been raised: It’s Pangilinan’s time. Locsin’s own is past, although it goes into the books not as some illustrious precedent merely to bask in or collect on, but as the very act to follow. As for me, a mere insertion in the interregnum created by Locsin’s departure, it is doubtless also time to go, as is not only proper but also fair — fair to Locsin, whose memory deserves such service as I could only hope to have done, and to Pangilinan, who has yet to begin building for himself a memory, hopefully, similarly deserving.
Vergel O. Santos succeeded BusinessWorld founder Raul L. Locsin as publisher and, as chairman of the editorial board, effectively editor in chief. Once the negotiations for the sale of the company began, he told his colleagues in the majority that, out of “simple propriety,” he was to be considered resigned once the deal was sealed. Forthwith, to formalize the wish, he submitted a standing letter of resignation, which he had followed up with the piece appearing above, a sort of valedictory, which was not allowed to see print in BusinessWorld by its new leadership.
Center for Media Freedom & Responsibility • 2013 MEDIA TIMES | 51
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