TV5 to cut 700 jobs, may stop airing TV5 Sports programming 'ESPN5'

MANILA, Philippines – Financial losses of TV network Associated Broadcasting Company (now TV5 Network, Inc.) (TV5) will result in the retrenchment of 700 employees and uncertainties over its TV5's sports programming "ESPN5" one of the country's pioneer sports and news channel programs.

In press briefing on Tuesday, October 2, 2018, Presidential Communications Operations Office Secretary Martin Andanar said his office will monitor the network's compliance to the Labor Code provisions in terminating the services of workers. 

"The PCOO continues to supervise the operations and management of TV5 and, as we have declared in all of our appearances and statements before both House of Congress, government is committed to protect the rights of the employees of TV5", Andanar said. 

The government, however, only has a minority 20.8% stake in following a previous court ruling, Andanar said.

'TV5 sports and news channel' and job losses 

Some employees of TV5 said "ESPN5",  TV5's sports and news channel one of the country's pioneer sports and news programs, would stop airing.

But a statement from TV5 president, chief executive officer and officer-in-charge Coach Chot Reyes said "we are business as usual here and we continue our dialog with union" Reyes said.

The retrenchment came after the Kapatid network decided to stop TV5's sports and news channel programs and shows, as airtime had been assigned to blocktimers, namely Cignal TV, News5 and TV5.

"Cignal TV and News5 has been a block timer of TV5 and, if you would see the programming now, there are only two hours more or less of entertainment and news programs that is not covered by the blocktime agreement," Andanar said.

He added that his office was informed by TV5 management that it already issued letters or notices of retrenchment to some 700 employees of the network. The retrenchment program starts October 1, 2018 and will take effect in November.

“Cignal TV & MediaQuest has been a block timer of TV5 and, if you would see the programming now, there are only two hours more or less of news and public information that is not covered by the block time agreement,” Andanar said.

He added that his office was informed by TV5 management that it already issued letters or notices of retrenchment to some 700 employees of the network. The retrenchment program starts October 1 and will take effect in November.

According to the Labor Code, management is given a 30-day period to implement such notice. Based on the present collective bargaining agreement between TV5 management and employees, the notice period is 45 days so the notices have already been issued.

“We continue to monitor the developments in TV5 to ensure that all the rights of the employees under the Labor Code are adequately protected,” Andanar said.

Andanar has met with network’s labor union to discuss network’s financial fate and plans to be privatized. The network had about P4 billion worth of obligations to employees.

The union filed a strike notice to protest the reported shutdown of TV5. TV5 did sign-off in February 2016 but only as part of the preparation for a relaunch.

Ownership structure  

Andanar said one of the government’s representatives to the board, Noel Lorenzana had resigned as TV5 President and CEO on September 8, 2016. Only government representative remains: Manny V. Pangilinan.

But in 2015, the Supreme Court ruled with finality that 36% of TV5 was owned by MVP Group of Companies.

In October of 2016, the new composition of the TV5 Board reflected the equity structure as follows:

• 34%, Cignal TV 
• 32%, MVP Group of Companies 
• 20.8%, MediaQuest Holdings 
• 14%, individual private stockholders

This new ownership structure came after a series of capital raising exercises, which led to the entry of other groups, including the Pangilinan and San Miguel groups.

“All I know is that they were not able to attain profitable operations from the time that it was decided by the previous administration to allow the equity conversion of the Cignal TV & MediaQuest Group to the extent of 34%…My impression is they have not been operating profitably since the time Solar was allowed to do the debt-to-equity conversion,” Andanar explained.

Andanar said the conversion was allowed precisely because TV5 could not meet its contractual obligations to the employees, amounting to some P4 billion.

In a previous statement, TV5 management said, “To keep its obligations, TV5 management had struggled to raise funds needed to continue its operations and pay its employees regularly, using current revenue streams and borrowings, but to no avail. This unsustainable situation has resulted in years of unpaid debts and continuing financial losses.”

The network rebranded from ABC-5 to TV5 in August 9, 2008.

In 2016, additional TV5 shares were sold to MVP Group of Companies and MediaQuest Holdings, increasing the group’s stake.

TV5 acknowledged that the network “could not compete with the rest of the industry.”

TV5 operates in all TV and radio stations nationwide.