A senior lawmaker on Wednesday defended the proposed partnership between ABS-CBN and TV5, which announced Wednesday they would “pause” their deal until it passes government scrutiny.
In a letter to Speaker Martin G. Romualdez, Albay Rep. Edcel Lagman also worried that the House inquiry on the matter “may result in the derogation of press freedom and free speech—the bedrock of democratic governments.”
Lagman wrote Romualdez as the joint House committees on legislative franchises and on trade and industry conducted Wednesday a congressional inquiry on the proposed partnership allowing ABS-CBN to acquire 34.99 percent of TV5’s total outstanding capital stock (see related story on B4 – Editors).
This developed as Philippine Competition Commission (PCC) told legislators that the ABS-CBN-TV5 partnership is exempted from notifying the body and seeking the approval of the agreements.
It said the transaction does not meet the P50 billion threshold set by the Bayanihan to Heal as One Act.
“Even if it’s not notifiable because it does not meet the threshold under the law. It does not preclude the parties from voluntarily notifying the PCC,” said PCC officer-in-charge Johannes Bernabe.
SAGIP party-list Rep. Marcoleta, who opposed the renewal of the franchise of ABS-CBN expressed the belief that TV5 has violated its franchise by entering a deal with ABS-CBN. He added the ABS-CBN should settle their obligations before “riding” on another station’s franchise.
“I write on behalf of my constituents and concerned citizens about the looming House investigation which may result in derogation of press freedom and free speech, the bedrock of democratic governments,” Lagman said in his letter.
“Mr. Speaker, there’s absolutely nothing wrong with that arrangement. What is definitely errant is when authorities trample on the freedom of expression and of the press,” Lagman stressed.
Lagman, a lawyer and human rights advocate, clarified the deal of the two networks is not a merger as they will remain separate and independent juridical entities.
“The contract is an investment agreement wherein ABS-CBN invests in TV5 by putting in P2.61 billion in exchange for 34.99 percent of TV5’s voting stock, and an additional P1.84 billion in Convertible Notes which can be exchanged for additional voting shares only after eight years and will increase ABS-CBN’s stake in TV5 shares to only 49.92 percent or less than a controlling absolute majority, and this is still inchoate and subject to requisite approvals,” Lagman said.
He also said in his letter that the agreement did not violate the franchise of TV5 and was in accordance with Section 10 of TV5’s renewed franchise under Republic Act 11320, “because there is no sale, lease, transfer or grant of the usufruct or assignment of TV5’s franchise to ABS-CBN.”
In fact, Lagman stated in his letter the investment deal between TV5 and ABS-CBN “enhances fair competition in the television and broadcast industry. Without a franchise, ABS-CBN ceased to be a major player in the industry.”
“One television network presently dominates the industry. With the recent infusion of TV5, the playing field approximates leveling. There is no franchise issue. There is no merger or transfer of controlling interest in TV5,” Lagman stressed.
“Healthy competition will ensue as networks would compete for revenues and viewership. The competition also improves the quality of shows, news coverage, commentary, and entertainment. Not even the current dominant network expresses opposition to the transaction,” he added.