Buy the Sky

The likelihood of a Cignal-Sky team up isn’t far from possible, at least according to some reports.

Just a few weeks ago, Bilyonaryo broke the news that the Lopez-led embattled media giant ABS-CBN Corporation is considering to sell its pay TV subsidiary that is Sky Cable. The reason? It was detailed that this sale might be triggered by ABS-CBN’s bleeding of cash since the pandemic started and suffered a double blow in the form of their free-to-air outlets shutting down in May. This can also be a way for the corporation to offload Sky Cable that accounted for about 20% or around 6 billiom pesos of ABS-CBN group’s entire debt of P27 billion.

In the same article, it was revealed that at least three firms are interested in purchasing the country’s second largest pay TV operator. The list included Dennis Uy of Converge, Davao’s Dennis Uy of Dito/Udenna, and the Ayala Group, which owns BPI – ABS-CBN’s biggest creditor. However, no one from the three companies mentioned confirmed, nor have issued a statement regarding the news. Days later, the name Manuel V. Pangilinan of PLDT/Metro Pacific and chairman of Cignal, the country’s biggest pay TV operator began floating as a suitor for Sky. Still, no comments were made by anyone since it was published

But on Sepetember 14, Philstar published an article that might confirm MediaQuest’s (PLDT’s media holdings arm) plan to go for Sky. Take note, The Philippine Star group is also under MediaQuest Holdings through a 51% stake of the latter to the former. Although a disclaimer that the news was just from a ‘reliable industry insider’ was written in the report.

Going back to the said story, it was stated that Pangilinan is only waiting for the end of ghost month this Wednesday, September 16 to finally “seal the deal”. Bilyonaryo stated in a separate article that the worth of Sky was pegged at around 15 to 18 billion pesos, but MVP could further increase the buying price to make sure their group would get Sky from the Lopezes.

Now, should this be a real and existing negotiation between the Lopez group and MVP, the whole story would have come a complete 180 from what happened years ago when PLDT-MediaQuest disposed Home Cable – then second biggest – and sold the entire company to Sky in 2005. Home later became the Silver postpaid plan on Sky Cable. It was also around the same time that the provider became the top pay TV operator in the country.

This time around, it’s a completely contrasting scenario as they MediaQuest was able to create and build Cignal TV, which surpassed Sky as the leading operator when it reached more than 2 million subscribers in 2018 and the first ever to do so. By effectively taking in Sky, PLDT will now amass roughly 2.5M subs in the entire archipelago. That will not account yet to the displaced Sky Direct consumers who were affected by the June 30 alias CDO ordered by the NTC vs. ABS-CBN. If they consider reactivating those dishes, at maximum the group will now have more than 3 million connections.

But wait. Is the Philippine Competition Commission going to stop this merger of sorts from happening? The quick answer is a no.

As Bayanihan To Recover as One Act or Bayanihan 2 was enacted into law on Friday evening, mergers and acquistions worth below P50 billion will no longer need to be reviewed by the commission. Meaning, even if Pangilinan goes all out at (let’s say) P20 or P25 billion pesos, they will no longer have to seek the PCC for a review of the M&A.

One of the few things need to be ironed out in the matter (considering that this is a real one) would be the tie up between ABS-CBN properties to the cabler and TV5’s exclusivity of its own portfolio on Cignal’s satellite service. Would Sky subscribers finally get a glimpse of One News and One Screen? And would Cignal TV viewers finally get the Kapamilya Channel onboard? Well, that’s an exciting proposition to look at if ever things really push through.

Finally, will Sky’s own Fiber and other services cease and end up merging with PLDT’s own Home line? That’s another one we should wait and see (again, if everything is already carved in stone).

Now that ABS-CBN is rushing to get back on its feet after suffering two huge blows at once, the rapid pace of asset disposal is definitely one of their priorities. Even without an official word yet, the question is now “when will someone finally buy the Sky?”

SEPTEMBER 14 UPDATE

In a disclosure to the stock exchange, PLDT said that they’re “evaluating options” and “nothing’s definite yet at the moment.”

Meanwhile, in a separate statement, ABS-CBN said that “Sky Cable has not solicited the bid to sell the company, nor has ABS-CBN Corporation made any decision with regard to a divestment of Sky Cable.”