News article from by Doris C. Dumlao

     The news gives the readers a clearer picture on what is currently happening in the television broadcasting industry. Having said this, the group is interested to know the effects of the possible merging of GMA 7 and TV 5 to the whole industry most especially to ABS CBN.

     Manny V. Pangilinan, after acquiring Sun Cellular, is now eyeing one of the country’s leading television networks, GMA Networks, Inc. The controlling stockholders’ share is at P52.5B which means that anyone who will be able to acquire these will have larger voting rights than the others, making him the major stockholder. To show his eagerness in buying GMA 7, MVP has started to make his aggressive moves by organizing bank finance to prepare for the prospective buyout, Mediaquest Holdings Inc. starting to prepare to issue Philippine depositary receipts to PLDT as well as the expected offer of MVP to buy the shares of the minority shareholders. MVP also reiterated that his group is willing to pay in cash.

     This issue enables the researchers to formulate hypothesis about its effects in the future based on the given information and data. Combining the viewership of GMA7 and TV5 will capture approximately more than 50% of the TV audience placing these two corporations at the top spot. This will also allow merged companies to have greater monopoly power thereby controlling and lessening its advertising rate. Once this happens, it is expected that more advertisers will come to them thus affecting the sales of other networks especially ABS CBN. Also, the group sees this as a strategic move by MVP to have PLDT, Channels 5, 7, 11 and 13 as well as Meralco under one corporate umbrella to be able to cut down his expenses in advertising these corporations while at the same time having bigger sales than the previous years.  

Collamar, Lester
Lavapie, Jestine
Pinto, John
JV Lazo
7/19/2012 11:59:44 pm


Studying the effects of a merger between GMA-7 and TV5 is interesting. I do not have enough knowledge of this industry; however, here are some suggestions that you may want to apply in doing your paper and/or the news analysis:

1. What are the market shares of the Top 3 networks (GMA-7, TV5, ABS-CBN), let's say, for the past 5 years? (You can use the Hirschman-Herfindahl Index in computing this market share). These market shares would give you perspective on the performance of the networks in the industry. I don't think a merger would immediately place the two networks on the top. That's why, you need to look at their market shares.

2. Check the PLDT-Sun Cellular merger and see the changes that occurred after these two companies combined. The lessons from this merger might be applicable to the broadcasting industry.

3. You can check the products and/or services provided by each network. For example, ABS-CBN has TFC, GMA has GMA Pinoy TV, and TV5 has TV5 Int'l, something like that.

4. In doing the news analysis, you do not need to repeat what is written on the article. You can summarize it in 1-2 sentences. And then, use statistical data to substantiate your arguments. Take the news analysis seriously because it will help you later on. :)


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