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In a text message, Ray Espinosa, director of MediaQuest Holdings Inc., told The Manila Times that his company is in talks to acquire Malaysian-led MPB Primedia Inc., which has a block time agreement with ABC Channel 5.
"MediaQuest is in the final stages of discussions with respect to acquiring a majority stake in Pri-media," Espinosa said.
Espinosa said MediaQuest plans to acquire 75 percent of Primedia.
Last year, Media Prima Berhad, a Malaysian company created a local unit called MPB Primedia and entered a long-term block airtime agreement with ABC5. Under the accord, Primedia will provide content and manage the sale of airtime to the local broadcasting firm.
In addition, Primedia would also serve as consultant to ensure the success of broadcasting firm's repositioning, launch exercise and transmission quality upgrade.
In August last year, ABC5 was relaunched as TV5. The partnership with ABC5 is the Malaysian company's first investment in the Philippines, where there is a large and growing advertising market.
But according to Malaysian newspaper The Star, MBP Primedia's parent decided to give up the company after its Philippine TV operations continue to bleed and has been considered a major drag on the group's bottom line.
The Star said Media Prima has recognized losses of RM45.3million in 2008 and RM22.8million in the first half ended June 2009, or a total of RM68.1million, or P525.1 million.
Media Prima is the largest integrated media investment group in Malaysia with a diversified interest in both the electronic (TV and radio) and print media besides content development, event management and outdoor advertising. The group owns four free-to-air TV networks in Malaysia namely 8TV, ntv7, TV9 and TV3. It also owns two radio networks, Fly FM and Hot FM.
In December last year, GMA Network Inc., Citynet, and ZOE Broad-casting have filed a lawsuit against ABC5, Media Prima, and MPB Primedia for allegedly entering into an unlawful blocktime agreement.
GMA has asked the court to nullify the blocktime agreement between the Malaysians and ABC5 since it violates the law on foreign ownership and management of mass media to Filipino citizens or corporations.
It also said the agreement results to unfair competition against local broadcasting networks while GMA "continues its operations within the bounds of law." The Cojuangco-led smaller TV network and the Malay-sians "employed illegal methods" to circumvent 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 relaunch in 2008, TV5 has ascended to the number three post in TV ratings, GMA claimed.
Asked if MediaQuest may face legal issues regarding ownership of several media entities, Espinosa said, "I don't think so."
Section 11 of Article XVI of the Philippine Constitution prohibits monopolies "in commercial mass media when the public interest so requires."
Media Quest is a unit of the PLDT's wholly-owned Philippine Long Distance Telephone Co. Beneficial Trust Fund. It owns 29 percent of Business World and is a majority shareholder of National Broadcasting Corp. and operates 360media, which offers direct to home TV services.
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MediaQuest also has pending discussion to purchase 87.5 percent of The Philippine Star for P4 billion.
To see more of The Manila Times, or to subscribe to the newspaper, go to http://www.manilatimes.net. Copyright (c) 2009, The Manila Times, Philippines Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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