Earlier this afternoon, December 3, GMA-7 filed a suit against TV5, Malaysian company Media Prima Berhad (MPB), and MPB Primedia for "allegedly entering into an unlawful blocktime agreement."

 

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 station."

 

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 the Philippines.'

 

"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 Anti-Dummy law.

 

"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 activity.

 

"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."