GMA Network breaks earnings records in 2020 after ABS-CBN shutdown
MANILA, Philippines—GMA Network Inc. saw a banner year in 2020 with its dominance in local television sealed by the Duterte administration’s successful campaign to shut down main rival ABS-CBN Corp.
In a stock exchange filing, GMA said profits more than doubled amid the COVID-19 pandemic as it declared 2020 “a year like no other.”
Advertisers shifted to GMA after ABS-CBN’s free-to-air broadcasts were shuttered by the government beginning May 5, 2020. GMA also cut expenses dramatically and launched its own digital television business, creating a new revenue stream.
By the end of 2020 GMA posted a profit of P6 billion, up 128 percent.
“GMA Network Inc. and subsidiaries broke all records in terms of financial performance for the 12-month period,” the company said.
Television and radio advertising, the company’s largest revenue sources, rose 17 percent to P17.73 billion last year.
A slowdown here was expected because 2020 followed an election year, which is associated with an income boost from political ad placements.
But GMA said the shutdown of ABS-CBN’s TV broadcasts and the subsequent denial of its legislative franchise by Duterte’s allies in Congress in July 2020 “contributed to the extraordinary increase in sales from broadcast operations due to the shift in some advertising placements.”
ABS-CBN continues to air shows via its pay TV and online channels. Some of its programs have returned to free TV through airtime leasing agreements.
In June 2020, GMA launched the GMA Affordabox, which allows viewers to access digital TV channels, and later, a counterpart device for mobile phones. The company sold 900,000 units, generating sales of over P500 million.
This pushed up total revenues in 2020 to P19.33 billion, up 17 percent.
At the same time, GMA slashed operating expenses by 16 percent to P10.78 billion. This was mainly due to the drop in production costs as filming for shows were suspended due to the COVID-19 lockdown.
GMA said news and certain public affairs programs aired fresh episodes during the pandemic.
Earlier this year, GMA announced its largest-ever cash dividends to investors following the earnings windfall in 2020.
It also announced at the start of 2021 plans to invest over P20 billion until 2023 for its expansion and content acquisition.
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