Fourth of a series on the Salim Empire in the Philippines.
And what—or who—is that emerging Philippine media giant?
It’s Philippine Long Distance Telephone Co., controlled by Indonesian tycoon Anthoni Salim, through its subsidiaries MediaQuest, Inc. and Hastings Holdings.
Hastings Holdings Inc., a wholly owned PLDT subsidiary, is poised to take control this month one of the three largest broadsheets in the country, The Philippine Star.
As in the case of its TV-5 television network, it could be a booster rocket for Philippine Star if PLDT throws its advertising funds to the newspaper.
PLDT is a firm that is 64 percent controlled by foreigners, the Supreme Court itself had ruled in 2012. The biggest bloc of shares there, 27 percent, is held by Salim’s corporate vehicles under his First Pacific Co. holding company based in Hong Kong.
Manuel V. Pangilinan, who is the managing director and CEO of Salim’s Hong Kong-based holding firm First Pacific Co., is chairman of PLDT. He has token shares of of only 0.1 percent of the company. Its president is Napoleon Nazareno, the only other director, though a non-executive one, in First Pacific’s board.
Philippine Star president Miguel Belmonte confirmed to this writer that Hastings Holdings is set to buy “an additional 31 percent of Philippine Star’s shares from the Belmonte family “to bring its stake to 51 percent.”
“The Belmonte family [headed by Speaker Feliciano Belmonte] will remain as minority shareholder with 20 percent,” he said. The next biggest shareholder is the estate of the late publisher and distinguished columnist, and nationalist, Max Soliven.
What the PLDT firm will be controlling is actually the newspaper’s corporate vehicle PhilSTAR Daily, which owns a printing press and three tabloids (Pilipino Star Ngayon, PM: Pangmasa, and Banat News). It also owns the venerable broadsheet Freeman, the first and oldest newspaper in Cebu established in 1919. (Freeman is actually the country’s third oldest newspaper, with Manila Times the oldest, followed by The Manila Bulletin.)
Belmonte explained that the sale to the PLDT firm has been agreed on, and all the documents are being finalized. “But the sale is not a sale, until we’re actually paid,” he said.
How much? “Much more than P2 billion,” Mr. Belmonte said. My sources claimed that the ballpark figure for the purchase is P5 billion.
The purchase will give Salim, through PLDT, full control of two national newspapers, the Philippine Star and business newspaper BusinessWorld. Also through Hastings Holdings, Salim has a minority—18 percent–stake in Star’s rival The Philippine Daily Inquirer..
Salim and his top executive Pangilinan, sources say, are on a tack this year of strengthening and expanding the conglomerate’s media outfits, in order to be a major force in the 2016 presidential elections. Last year, MediaQuest amassed a war chest of P8 billion for this, and made a move, unsuccessful, to take control of GMA-7, the second biggest television network.
Salim’s executives have recently moved to take full control of BusinessWorld, appointing their editor in TV5, Roby Alampay, whose career has been mainly in an NGO in Thailand, as the business paper’s editor-in-chief.
Another PDLT firm, MediaQuest, owns two major broadcast media companies. One is the Nation Broadcasting Corp. bought way back in 1998. It has six FM stations in the country’s six major cities and a commercial UHF television station (NBC-41), called AksyonBalita.
The second broadcast media outfit, is ABC Development Corp., which operates television network TV-5, the radio station Radyo5 92.3 News FM, satellite television channels Colours, Hyper and Weather Information Network, and media portals Kristn.com, Balut Radio and News5 Everywhere.
It also owns the news website interaksyon.com, which converts the broadcast entity’s content including its news videos to be accessed in cyberspace. The firm also owns Cignal TV, the “direct-to-home” satellite television service provider.
The Salim-PLDT media complex could become the most powerful one in the country, since it can combine the strengths of television, print (both broadsheet and tabloid), radio, the Internet, mobile telephony (which PLDT through Smart and Sun dominates)—and of course the financial resources of PLDT as well other major firms under the Salim empire.
Media survives not by subscribers, but by advertisements. And what companies are among the biggest advertisers in the country?
PLDT’s mobile phone firms Smart and Sun, which have a combined advertising budget of P5 billion annually. Meralco has P2 billion, which is included in the expenses of the firm on which it bases its electricity charges.
Already, TV-5’s lifeline—which explains its endurance despite its losses allegedly of P5 billion since MediaQuest bought it in 2010—has been getting about P900 million annually of PLDT’s advertising funds of since 2010. PLDT disclosed this in its March 26, 2013 “SEC Form 17-A”:
“In 2010, PLDT and Smart entered into advertising placement agreements with TV5 a subsidiary of MediaQuest Holdings Inc. for the airing and telecast of advertisements and commercials of PLDT and Smart on TV5’s television network for a period of five years. Total prepayment under the advertising placement agreements amounted to Php893 million each as at December 31, 2012 and 2011.”
In his column last year when news of PLDT’s plans to take control of Star broke out, Jose Manuel “Babe” Romualdez, a Star columnist and personal friend of Mr. Pangilinan, wrote:
“The MVP group foresees synergized media operations, wherein the reporting pool of BusinessWorld, PhilStar and TV5 [the PLDT Group’s broadcasting network] will be serving as content providers while Cignal Digital TV will serve as the interactive media platform. Cignal just recently marked a milestone, reaching the 500,000 subscriber mark in just four years of its operation.”
What Mr. Romuladez missed is the immense reach the news content of Salim-PLDT’s news outfits could have through the companies’ mobile phones. Already, TV 5 is claiming in its ads: “Get fresh news daily straight on your mobile. Just text “News on” to 5353.” Smart and Sun operates that service, and they’ll get P1 for each news item it sends.
I doubt though that Salim and Pangilinan are really that interested in the income from such mobile phone based news delivery.
What if on the eve of elections in 2016, news article—even if a fabricated one—in Star or BusinessWorld comes out that Presidential Candidate B has fallen sick? And then this is sent to the 5.5 million subscribers of Smart and Sun?
Why has Salim gone into a crowded industry, whose profits would never be really stellar because of the Philippines’ small market, where the country’s richest tycoons like Henry Sy, John Gokongwei, and Jaime Augusto Ayala don’t dare go into?
Think about it. Now, do you still wonder why most Filipinos, even the elite have never heard of the Indonesian magnate Salim, even if the companies he owns are the ultimate beneficial owners of the biggest public utility firms? (See my article March 3)
Or is it that media, as one publisher said, are a “gun in the holster.” “A politician or a company would hesitate to shoot you, if you have a gun the holster,” he said.
But hold on, how can Salim get into media? Doesn’t the Constitution’s Article 16, Section11, totally ban any foreign participation in media?
If you think that it is so outrageous that a foreigner can control strategic industries in the country, you will be shocked how clever Salim has been—with the help of that renowned Filipino ingenuity in finding loopholes in any restriction—in going around that constitutional ban. That topic on Friday.
What kind of country have we become?
Our constitution is brazenly disregarded by a foreigner by exploiting regulatory loopholes, with the help of the best and brightest Filipinos. An Indonesian magnate is in an industry reserved to Filipinos.
The late Star publisher Max Soliven, one of my idols in our industry, would have undoubtedly remarked, “Sanamagan!”