GMA Network profit slips 2% (Inquirer)
Broadcast firm GMA Network Inc. said its net profit last year dropped two percent to P1.97 billion, reflecting the impact of the increase in corporate income tax.
Meanwhile, ABS-CBN's net profit doubled in 2006 to P741 million. Better than 2005, but they have a long way to go in catching up to GMA.
So ang tanong uli: If ABS-CBN is really #1, how come GMA earned more than double and close to three times their profit in 2006? Obviously, ABS-CBN's business practices of trying to be #1 nationwide and franchising foreign shows are business blunders because GMA is only spending their resources on Mega Manila, GMA PinoyTV and local shows, and they are by far the more profitable company. ABS-CBN's business managers don't look as smart as they would want us to believe. On revenue of P17.4 billion, you only earn P741 million??? GMA's revenue in 2006 was P11 billion and they were able to take out a hefty profit.
ABS-CBN's airtime revenue was P9.6 billion, so the rest of the P17.4 billion revenue was from TFC subscribers, movies and others. It's obvious then that ABS-CBN's local shows are operating at a heavy loss (or something else is bleeding them dry). I did some crude research and I think it costs 60 million dollars to franchise Big Brother (that's how much the U.K. Big Brother costs), that's P3 billion. Ouch. Anybody know how much ABS-CBN pays Endemol every year and how long their contract is? Also, this whole setup of theirs doesn't make sense since ABS-CBN makes a ton of money off their North American TFC subscribers and yet they don't show Pinoy Big Brother here, the show they spend the most money to produce! And ironically, not their highest rated show in the Philippines, nationwide or otherwise either.
ABS-CBN's operating costs was P15.9 billion, while GMA's was P3.7 billion. I guess it costs that much to maintain all those TV stations around the country. I have to rethink my opinion of ABS-CBN. It seems they prioritize being #1 in ratings over making actual money.
Ok, away na uli...