Since August, ABC-5 has been known as TV5, which now offers
24/7 programming and operates a brand new transmitter. Management explained
that ABC-5 had entered into a "major blocktime agreement" with MPB Primedia
Inc., a Philippine corporation backed by Media Prima Berhad of Malaysia.
During the TV5 press launch, TV5 CEO Christopher Sy pointed
out that "ABC-5 is still owned by Tonyboy Cojuangco. Prime Media has simply
entered into a blocktime agreement but we do not have any equity in this
Little did everyone know that by that time, GMA-7 had already filed a complaint
regarding the "unconstitutionality" of having Malaysian investors being
involved in the "programming content and airtime sales" of TV5.
Mr. Dick Perez, GMA-7 vice-president for legal affairs, told PEP (Philippine
Entertainment Portal) that they already filed complaints last August but it
took them some time to gather data regarding this matter.
Why did they file the suit just now—three months after TV5
was launched publicly?
"We only did what we had to do, which is to file a complaint in administrative
agencies such as the National Telecommunications Commission and the National
Bureau of Investigation. A few months later, we decided to elevate it to the
courts," explains Mr. Perez in a phone interview with PEP earlier tonight, December 3.
Article XVI, Section 3, of the 1987 Philippine Constitution states:
"The ownership and management of mass media shall be limited to citizens of the
Philippines, or to corporations, cooperatives or associations, wholly-owned and
managed by such citizens."
For this reason, GMA-7 is asking the Quezon City Regional Trial Court to
nullify the blocktime agreement between MPB Primedia and TV5. They argue that
this agreement violates the 1987 Philippine Constitution, which restricts
ownership and management of mass media to Filipino citizens or corporations.
GMA-7 is also claiming a total of P11 million for damages, including
attorney's fees and litigation expenses, from TV5, MPB, and MPB Primedia to
compensate for the loss of revenues due to unfair competition.
PEP asked TV5's media relations head Pat Marcelo-Magbanua
for their reaction to this development but she replied through a text message:
"We haven't received a copy of the complaint so we're not yet in a position to
make a comment. As soon as we have a reply, we will let you know."
Here is the statement from GMA-7 (published in full):
"GMA Network, Citynet, and ZOE Broadcasting have filed a
lawsuit against ABC-5, Malaysian company Media Prima Berhad (MPB), and MPB
Primedia for allegedly entering into an unlawful blocktime agreement.
"GMA Network is asking the Quezon City Regional Trial Court
to nullify the blocktime agreement between MPB Primedia and ABC-5 as the
agreement violated the 1987 Philippine Constitution, which restricts ownership
and management of mass media to Filipino citizens or corporations.
"The said blocktime agreement allowed MPB Primedia to control
and manage ABC-5's programming content and airtime sales.
"GMA Network said that while MPB Primedia's Articles of
Incorporation indicates that it is Filipino-owned, it is in truth a subsidiary
of Malaysian company Media Prima Berhad. The Verification or Reservation
Request of Primedia on file with the Securities and Exchange Commission (SEC)
indicates that the acronym 'MPB' in its corporate name stands for 'Media Prima
Berhad' which is the same name of the Malaysian company.
"This was later confirmed when MPB stated in its own website
that it 'has set up a subsidiary, MPB Primedia, Inc. that will soon enter into
a blocktime agreement with the ABC5 network, one of the television networks in
"GMA also said that according to the report of Merril Lynch
of Singapore on March 25, 2008, the acquisition of ABC-5's airtime forms part
of the investment strategy of the Malaysian corporation, Media Prima Berhad, to
establish a company in the Philippines, which will be owned by MPB at seventy
percent. This Philippine company was identified in the report as Primedia.
"MPB Primedia has an authorized capital stock of
P5,600,000. Twenty-five percent (25 percent) of Primedia's authorized capital stock
was subscribed by its incorporators and directors. Out of the 25 percent subscribed
capital, only P350,150 has been paid.
"The transfer of control and management of ABC-5's
programming content and airtime sales to MPB Primedia constitutes intervention
by a foreign company and/or its dummy in the management and/or operation of a
100 percent nationalized business activity which violates the Constitution and the
"As mandated by the Constitution, mass media, which includes
television and radio broadcast, is a completely nationalized business activity.
The Anti-Dummy Law (Commonwealth Act No. 108, as amended) punishes the evasion
of nationalization laws and prohibits non-Filipino citizens from intervening in
the management, operation, administration, or control of any nationalized
"It being contrary to the Constitution and the Anti-Dummy
law, GMA Network said that the blocktime agreement entered into between ABC-5
and MPB Primedia is void.
"GMA Network likewise said that the blocktime agreement
between ABC-5 and MPB Primedia results in unfair competition against local
broadcasting networks. GMA said that while it continues its operations within
the bounds of law, ABC-5, MPB and Primedia employed illegal methods to evade
restrictions on mass media ownership, which have deprived GMA and other local networks
of the fair chance to engage in the broadcast business.
"Since its re-launch in 2008, TV5 has ascended to the number
three post in TV ratings.
"Apart from asking the court to declare the blocktime
agreement between ABC-5 and MPB Primedia null and void, GMA Network is also
claiming a total of P11 million for damages, including attorney's fees and
litigation expenses, from ABC-5, MPB, and MPB Primedia to compensate for the
loss of revenues due to unfair competition."