ABS-CBN, PLDT call off Sky deal; cable operations to continue

On the other hand, it was supposed to generate money for the cash-strapped media giant.

In a disclosure to the Philippine Stock Exchange (PSE) on Thursday, February 22, PLDT announced that it is no longer proceeding with its acquisition of ABS-CBN Corporation’s broadband assets in Sky Cable Corporation.

According to both parties, they have “mutually decided not to proceed with the sale of Sky Cable to PLDT under the Sale and Purchase Agreement signed by and among the parties in March 2023.”

In their separate statement, ABS-CBN and Sky Cable added clarity to the matter, and explained: “Following this development, SKY is pleased to announce that its cable TV service will continue beyond February 26, 2024, assuring subscribers that they can maintain their subscriptions.”

“Meanwhile, SKY’s broadband internet service SKY Fiber remains unaffacted.”

The cable and broadband company then proceeded to thank their customers “for their continued patronage and support.”

Both PLDT and ABS-CBN did not share the reason behind the termination of the deal.

PLDT-SKY CABLE RELATIONSHIP OVER THE YEARS

There have been numerous instances in the past when telecommunications giant PLDT tried to invest in or acquire Sky Cable.

In 2001, the company sold its Home Cable business to Sky. Eventually, the company folded into the main Sky Cable brand in 2005.

Die to to Sky-Home Cable merger, PLDT had a minority stake in Sky Cable for a good few years, but they sold it off in 2008 as the telco giant prepared to launch the satellite television provider Cignal TV in 2009.

After the franchise renewal bid of ABS-CBN was denied by the Lower House, PLDT sent feelers to the Lopezes to acquire Sky Cable back in 2020, but held back due to antitrust issues.

But both parties explored other possibilities and in August 2022, PLDT tried to acquire Sky via its subsidiary Cignal Cable.

That deal would have seen Cignal get 38% of Sky until at least 2030, before it can invoke the condition that would have seen its share increase to more than 61% of the company.

In relation to that, ABS-CBN, parent firm of Sky, also pursued to purchase 35% of TV5, a share that they could have increased to 49.92% in 2030, should the deal went through.

But due to political pressure, among other factors, the double deal broke down in September 2022.

After that, they returned to the discussion table and on March 16, 2023, PLDT and ABS-CBN Corporation announced through separate disclosures at the Philippine Stock Exchange a sale-and-purchase agreement that would have seen the former acquire 100% of the latter’s subsidiary Sky Cable Corporation for Php 6.75 billion.

As part of the now-canceled deal, PLDT planned to keep under its fold Sky’s broadband business, and integrate it with its fiber and fixed-line operations.

However, due to regulatory conditions, Sky’s existing cable TV and pay TV operations would have also been closed down, which was supposed to happen before midnight on February 26, 2024.

ABS-CBN, which owns majority of Sky Cable’s existing shares at 58.7% — with the rest of Sky is owned by parent Lopez, Inc. and holding firm Sky Vision — is expected to take ₱4 billion by the end of this transaction.

The media giant said the sale would allow them to settle obligations and pump money into its vital content creation business, which has been the core business of the corporation since the franchise controversy in 2020.

WHAT HAPPENS NEXT

Quoting its data from June 2022, Sky Cable’s CATV business only has 300,000 customers, well below half the peak of 700,000 subscribers it had in 2012.

Its broadband service, however, remains its strong point with 350,000 customers reported during the same period.

As the deal fizzled out, ABS-CBN will continue the operations of its pay television business under the Sky Cable brand and broaband business known as Sky Fiber.

Its suite of pay TV channels, led by the likes of Kapamilya Channel, Jeepney TV, Cinema One, CineMo!, Metro Channel, Myx, ANC, and Teleradyo Setbisyo, will all continue to be seen under one roof.

Initially, the planned cessation of Sky Cable’s operations would have resulted to news channels ANC and Teleradyo Serbisyo being available in about 200 pay TV operators nationwide, as well as online.

But both news outlets would have not been and still are not available on leading pay TV provider Cignal, which had added all ABS-CBN’s entertainment channels to its line-up in 2022.

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