Bilyonaryo Felipe Gozon was unable to prevent a sharp decline in GMA Network’s profits as advertising revenues took a deeper plunge in the first half of 2023.
GMA’s profit cratered by P2.8 billion or 71 percent year on year to P1.18 billion in the first six months this year.
This figure stands below GMA’s pre-pandemic profit of P1.34 billion in 2019, a period when it played second fiddle to its competitor ABS-CBN in the race for advertising. GMA has maintained a 72 percent market share in Metro Manila since the Lopez family lost the ABS-CBN franchise in 2020.
GMA attributed the P3.5 billion or 28 percent drop in its advertising and consumer sales to the absence of political ads, bringing the total to P8.46 billion for the first half.
Interestingly, GMA’s sales lagged behind ABS-CBN which posted P8.8 billion in consolidated revenues, largely derived from the licensing and syndication of its content library.
GMA admitted that ad revenues, referred to as the “lifeblood” of the company, was “hardest hit due to the absence of election-related placements this year.”
The management blamed its poor ad sales on the weakening household spending, a consequence of rising inflation and borrowing costs.
“As a result, major fast-moving consumer goods (FMCG) clients of the company which largely bank on individual purchasing power have likewise scaled down their ad spending,” said GMA.
Amid falling revenues, Gozon failed to contain the rising operating costs, which increased by four percent to reach P6.9 billion.
“Management has made a concerted effort to keep spending at bay given the economic challenges, albeit ensuring that commitment of the company to its viewers in terms of providing superior entertainment and responsible delivery of news and information remained at the forefront,” said GMA.