Gozon touts win over ABS-CBN as investors flock to GMA Network

GMA Network Inc. chair and CEO Felipe Gozon on Wednesday revived a ratings war with rival ABS-CBN Corp. amid a wave of interest from investors after GMA became the country’s dominant television broadcaster by default.

During the firm’s annual shareholders meeting, Gozon touted GMA’s superior TV ratings after ABS-CBN’s broadcast business was shuttered by the Duterte administration on May 5, 2020.

This was followed by the denial of ABS-CBN’s broadcast franchise by President Duterte’s allies in Congress in July, shocking free speech advocates and resulting in thousands of layoffs at the media giant.

“We were already ahead of ABS-CBN in both reach and viewership before the latter went off the air in May,” said Gozon, who previously declined to comment on their competitor’s shutdown.

He said GMA remained the No. 1 television station in the country and that ABS-CBN’s return to free TV through airtime leasing deals had little impact on their earnings.

Leadership in TV ratings has been a contested area for years between the two rivals. GMA relies on data from AGB Nielsen, which shows it ahead, while ABS-CBN uses Kantar, which says it is leading GMA.

But beyond business one-upmanship with ABS-CBN, which continues to air online and via pay TV, analysts said GMA had now captured the spotlight from investors seeking a share from the windfall in the multibillion peso advertising industry.

GMA’s share price had soared 50 percent so far this year while the benchmark stock exchange index had declined. On Tuesday, it paid stockholders a historic high cash dividend of P1.35 per share.

Bets are now flowing into the company as investors expect a boom in political advertising ahead of the 2022 presidential elections.

“I’ve had inquiries from a few investors, just out of the blue, who are interested in GMA,” Joseph Roxas, president of Eagle Equities Inc., told the Inquirer.

“They had a big dividend, so people are asking if they can sustain this,” he added.

Luis Gerardo Limlingan, managing director at Regina Capital Development, said they currently have a “buy” rating on GMA.

“GMA7 wasn’t as heavily traded before as it is nowadays,” he said. “Back then, the flow of advertising revenue was split almost equally across the networks. Now, it’s most as advertisers will go directly to GMA.”

Pointing to rosy prospects, Gozon said on Wednesday earnings in 2021 could grow by around 15 percent after profit jumped 128 percent to P6 billion the previous year.

First-quarter earnings this year hit P2.02 billion, up 246 percent, as revenues grew 55 percent to P5.46 billion.

While advertising makes up the bulk of earnings, GMA last year launched its digital television business through the GMA Affordabox, creating a new source of revenue.

Moreover, the company is setting aside P20 billion until 2023, which will finance the expansion of digital TV, the construction of state-of-the-art studios within its Quezon City headquarters and content acquisition.

For 2021 alone, GMA planned to launch 100 new programs produced internally and foreign content, Gozon said.