CNN Philippines Nears Shutdown Amidst Financial Struggles and Licensing Costs

CNN Philippines, a key player in the nation’s media landscape for nearly nine years, is preparing to go off the airwaves. The looming closure, attributed to financial challenges and hefty licensing fees for the CNN brand, marks the end of an era for the news channel.

D. Edgard Cabangon, the chairman of Nine Media Corporation, which operates CNN Philippines, acknowledged the difficult decision to terminate the franchise deal with CNN International. This move was initially deferred out of consideration for the employees, but the pressure of financial strains has brought the issue to the forefront once again. Despite conflicting reports about the exact timing of the shutdown, with speculations ranging from January 29 to March, the consensus is clear: CNN Philippines’ broadcasting days are numbered.

The network’s financial plight is starkly outlined in its recent financial statements. For the years 2022 and 2021, CNN Philippines reported net losses of P239.7 million and P231.4 million, respectively. A capital deficiency further compounds these challenges, casting doubt on the network’s ability to sustain operations in the long term. The independent auditor, Reyes Tacandong & Co., highlighted this uncertainty, emphasizing the significant doubt about the company’s future viability.

In an attempt to navigate these turbulent waters, Nine Media has been proactive. The company has seen a revenue increase in 2022 and has implemented plans and actions to address its financial concerns. However, the costs of services, including substantial license fees to Turner Broadcasting System Asia Pacific Inc. for the CNN brand and airtime and satellite costs, have put a strain on the company’s finances.

The financial landscape for media companies has shifted dramatically, with traditional advertising revenues impacted by a pivot towards social media platforms. The high inflation regime and the consequent reduction in consumer purchasing power and company spending have further dampened ad sales for CNN Philippines.

Additionally, the absence of a funded retirement plan for the company’s employees poses a significant risk, as indicated by the ballooning retirement benefits liability in the financial statements.

As CNN Philippines prepares for its final broadcast, employees and viewers alike brace for the impact of this significant media closure. The shutdown of CNN Philippines is not just the end of a news channel but a reflection of the broader challenges and transformations within the media industry and the economic landscape.