Filtered By: Money

CNN Philippines still shutting down

CNN Philippines is going off the airwaves after all.

Nearly nine years after debuting on free TV, CNN Philippines is set to shut down soon amid its financial woes, including the hefty price tag on the licensing fee to carry the CNN brand.

“We delayed the closure/termination of the franchise [deal with] CNN International because of our love for our employees,” Nine Media chairman D. Edgard Cabangon said earlier. Nine Media Corporation is the media entity that operates CNN Philippines

Several sources, however, said what was deferred was the implementation of the planned shutdown of CNN Philippines as early as last year.

Sought to clarify if CNN Philippines will still shut down, an executive of the media company told reporters in a chance encounter that it was a “long overdue shutdown.”

Notably, Cabangon responded to GMA News Online’s query if the closure of CNN Philippines was already being planned last year due to losses by liking the question itself.

Reports have been circulating that CNN Philippines will be airing its last on Monday, January 29, while some say that its operations will be until March this year.

An insider said that staff were made aware that the network's "last full show" was last Friday, January 26.

On Thursday, news broke out that CNN Philippines is folding up after Nine Media and CNN agreed to discontinue their licensing deal as the company bleeds financially.

Following reports of the company folding up, an internal memorandum was issued to all personnel of the network to attend a General Assembly on Monday, January 29.

There was no agenda indicated in the memorandum.

“Please wait for the official statement of our president Mr. Benjie Ramos this coming Monday. Thank you,” Cabangon said.

Employees of CNN Philippines have expressed concern about the security of their jobs amid reports that the network will soon shut down. 

Net loss, deficiency

GMA News Online reviewed Nine Media’s financial statements covering the periods 2022 and 2021.

Reyes Tacandong & Co., the independent auditor which prepared the financial report of the company, flagged Nine Media’s financial positions which indicated that incurred net loss amounting to P239.7 million in 2022 and P231.4 million in 2021.

The media firm also has a capital deficiency amounting to P465.2 million and P226.2 million in 2022 and 2021, respectively.

“These conditions indicate a material uncertainty which may cast a significant doubt about the company’s ability to continue as a going concern,” the report read.

“The management is aware of these conditions and has accordingly instituted its plan and actions concerning these matters. Further, the management believes that the company can continue as a going concern given its ability to obtain funding and commitment of support from its major stockholder,” according to the report.

While Nine Media saw its revenue go up to P407.3 million in 2022 from P389.3 million in 2021, sales did not keep up with rising cost of services amounting to P514.88 million —which grew from P482.7 million in 2021.

License, airtime fees 

The cost of services includes license fees paid to Turner Broadcasting System Asia Pacific Inc. to continue carrying the CNN brand of P139.3 million in 2022, up from P108.09 million in 2021.

In October 2014, Nine Media entered into a brand and content license deal with Turner Broadcasting System Asia Pacific for CNN brand programming and its associated website for five years, which was supposed to end in 2019.

The deal was renewed for another five years until December 31, 2024.

Apart from license fees, Nine Media also incurred airtime and satellite costs of P83.4 million in 2022, up from P82.54 million in 2021.

In particular, NIne Media has an airtime agreement with RPN for a daily airtime of 18 hours since May 2018. RPN charges the company P8.2 million monthly airtime fee.

In 2021, RPN granted Nine Media a 20% discount for airtime fees from January 2021 to December 2022.

Meanwhile, general and administrative expenses —which include salaries, rental, utilities— stood at P131.4 million from P147.6 million.

Based on its financial statement, Nine Media expected a business and economic recovery back to pre-COVID-19 levels, but it “did not materialize in 2022.”

The report also said that the campaign period in 2022 did not impact traditional advertising revenues as campaign efforts focused on social media platforms with funds channeled to social media influencers, vloggers, and content producers.

“Post election, ads sales also failed to pick up due to spending holdback from clients and agencies with the ensuing high inflation regime pushing up consumer prices, curtailing purchasing power and consumption, hiking companies’ production and operating costs,” the report read.

The independent auditor also indicated in the financial reports that the company’s retirement fund is unfunded.

Nine Media’s retirement benefits liability ballooned to P29.6 million in 2022 from P25.4 million in 2021.

“The company does not maintain a fund for its retirement benefits liability. While funding is not a requirement of the law, there is a risk that the company may not have cash if several employees retire within the same year,” the report read.

CNN Philippines —a predominantly English language free-to-air news channel and website— was launched in 2015 by Turner Broadcasting System Asia Pacific and Nine Media Corp. —VAL/KG, GMA Integrated News