We Love Lucio

http://www.pcij.org/imag/Media/luciomedia2.html

IT’S NOT AS if Tan were a welcome bovine in many a media company’s pastures, and in truth ABS-CBN and the Star are not the only ones to feel his presence. As some insiders tell it though, there simply was no stopping him when he came lumbering confidently through the corporate gates, often with a considerable number of company shares on his back. At least that’s how it was with ABS-CBN, which found Tan in possession of 20 million shares of the publicly listed Lopez-owned radio and television network. Tan had bought the shares in 1996 through his Allied Banking Corporation. Having them means Tan now owns three percent of the country’s largest broadcast company, bringing him close to a board seat beside mall magnate and fellow taipan Henry Sy.

The difference, says an ABS-CBN source, is that Sy was invited to join the ABS-CBN board while Tan was not. The SM owner has a cinema business thought beneficial to ABS-CBN’s movie production outfit Star Cinema. Tan, in contrast, had no deal to offer the Lopezes. Even worse, says the source, he was feared to tarnish the network’s good standing with his reputation as a tax evader.

The case of the Star, the third most widely circulated broadsheet in the country, is rather different. When its late publisher Betty Go-Belmonte was trying to get the paper off the ground in the 1980s, Tan is said to have generously lent her part of the cash she needed. “I owed him money,” Monsod recalls Belmonte telling her once, “but I paid him back.”

According to Monsod, Belmonte had also assured her of complete independence in writing her columns, “but when she died, things changed.” Monsod apparently finds some connection between the way she was treated and the fact that Star publisher Max Soliven also happens to be publisher and chairman of the board of Eastgate publishing, the group that produces PAL’s inflight magazine Mabuhay. That, harrumphs Monsod, is a clear case of conflict of interest.

Tan reportedly owns shares in the paper through a trustee. He is also believed to be part-owner of the Philippine Post, a new broadsheet said to have been funded by Finance Secretary and known Tan fan Edgardo Espiritu. But the newspaper that he has long been rumored to have more than a minority interest in is Today, the slick daily run by lawyer and television host Teddy Locsin Jr. Rumors regarding the alleged real owners of the paper began circulating as early as Today’s start-up stage, when a Tan-owned company was revealed to be its major supplier of state-of-the-art computers.

Such ownership talks have persisted to this day, although until recently they were confined in media circles. At the peak of the flak over PAL, however, the matter resurfaced in Today’s own op-ed section. “As far as I know,” labor leader Popoy Lagman, then supporting the PAL unions, wrote in a letter to the editor, “the P30 million he (Teddyboy) received from Tan was gratis. Hence, he has no obligation to become Tan’s slave.” Locsin countered with the charge that Lagman was secretly playing both sides and that Tan had given the former rebel P20 million and a car to persuade the PAL employees to end the strike. Interestingly enough, the sharp-tongued Locsin neglected to deny the insinuation that Tan’s money had helped start Today.

But perhaps only Lucio Tan himself knows for sure which media outfits he has money in. The personnel of one of the country’s top five AM radio stations say they had no inkling Tan had some business interest in their station until they began hitting the magnate during the PAL fiasco. Somehow, the station owners were reminded that Tan had bailed them out during a financial crisis in the 1980s, and that he was therefore a business partner—a very silent one, but a partner nonetheless. The result, says one station insider, is that management simply refused to air any Tan or PAL-related news in the week the controversy was raging.

Another radio station that can be called Tan-friendly is DWWW. The station was originally owned by the family of veteran newscaster Tina Monzon-Palma, but acquired by Bacsal a few years ago. Bacsal, who says he is “connected” with Fortune Tobacco but declines to be more specific, insists Tan has no interest in the venture.

To Lucio Tan’s close friends and associates, most of his investments in media, admitted or not, are mere manifestations of the taipan’s generosity. “Alam mo kasi nung araw, maraming taong nangangailangan ng pera, uutang sa kanya, pag hindi nabayaran, equity na lang (You know in the old days, a lot of people who needed money would approach Lucio Tan for loans. When they couldn’t pay him back, he just writes off the debts as equity)!” says retired Gen. Salvador Mison, president of Basic Holdings Corporation, which manages several Tan companies.

As his friends see it, it is hardly Tan’s fault that his being big-hearted has earned him an equally generous share of defenders in the media. Jake Macasaet, publisher of Ang Pahayagang Malaya, told a U.S. journalist during an interview three years ago, “I maintain that he (Lucio Tan) is a persecuted businessman.”

But Tan’s associates and friends may be downplaying the effects of his presence, financial and otherwise, in media outfits. Says a public relations practitioner who deals with newspaper reporters and editors: “I have to tread my way carefully through every paper other than BusinessWorld because Lucio Tan has a person protecting his interests in most every paper, except perhaps BusinessWorld.”

If the PR practitioner is correct, then that may explain why most newspapers had refused to air anti-Tan stories when the airline was in distress. Then again, it could also have been due to the fear of getting dragged off to court, a very costly risk to take for dailies, many of which were themselves not doing much better than PAL. The one paper that did run stories on Tan and PAL, the Philippine Daily Inquirer, ended up as the respondent in a P100-million libel suit filed by the billionaire himself last September. The paper had headlined a story saying Tan bled the airline dry and made P25 billion in the process. The case was dismissed by the Makati regional trial court on February 16.

Today columnist Dan Mariano, however, maintains that in general, “PAL has been getting sympathetic coverage from the press.” He points out that the airline actually maintained friendly ties with the media long before Tan came into the picture. For years, PAL made it a practice to regularly give free tickets to print reporters, editors and publishers and broadcast personalities. Newspapers also rely on PAL to bring their copies to the provinces. Concludes Mariano: “No wonder then that whenever PAL employees go on strike, many news organizations are inclined to portray them as villains.”

Unfortunately for Tan, the good press didn’t seem to do him much good. A survey conducted by the Social Weather Stations (SWS) last year found Lucio Tan to be infamous—four out of five adult Filipinos know him, but he is more distrusted than trusted by the public. Wrote SWS director Mahar Mangahas: “From this it would seem that the media persons recently named by labor leader Filemon ‘Popoy’ Lagman as being on Lucio Tan’s payroll have been ineffective—though another possibility is that those in the so-called envelopmental media have at least kept Mr. Tan’s trust rating from getting even worse.”

BUT MORE visible and effective than ownership or an intimate relationship with the press is the clout Lucio Tan wields by practically subsidizing the media, thanks to the numerous ad placements of his companies. Tan’s firms are among the country’s top advertisers. In 1996 alone, his top three companies—Asia Brewery, Tanduay Distillery and Fortune Tobacco—altogether plunked down almost a billion pesos in media advertising. A year later, just when the economic crisis began, the figure jumped to P1.621 billion.

The bulk of Tan’s advertising money is spent on radio and television, the media most relied upon to reach the targets of his consumer products, the masa. For airing commercials of Hope, Winston, Champion, More and Mark cigarettes, Fortune Tobacco paid the television industry nearly P600 million in 1997, and the radio industry almost P400 million. In contrast, Fortune spent only P17.55 million for print ads.

Tan’s ad money is spread out to various television and radio stations, and following industry practice, is placed in programs which are most watched by consumers. His managers are said to report directly to a committee—chaired by Tan himself—which has made it a policy to underwrite only programs considered Tan-friendly.

These managers deal directly with the sales departments of broadcast stations, the units that sell airtime to clients. The managers also monitor whether the advertisements come out and whether the program over which it is aired did not make any derogatory remark about the product or the client himself, i.e. Tan. Hence, when Korina Sanchez read aloud that Lucio Tan was a tax evader in 1996, Fortune Tobacco executives immediately pulled their ads out of her program. Sanchez can only call it “pure blackmail and harassment.”

Unlike other networks, the giant ABS-CBN could probably afford to let go of the Tan account because several others are waiting in line to fill its slot. But it’s a sizable account nonetheless; in 1998, the network earned P98 million from advertisements placed by Tan-owned companies in Channel 2 alone, not counting radio station DZMM.

It really isn’t the big companies like ABS-CBN that are most affected by pressure from advertisers, but rather the smaller broadcast stations and outfits that jostle for the advertising crumbs thrown away by the big boys. But even the mid-size stations are bound not to pass up any advertising revenue, especially in times of crisis.

A major broadcast network has developed a modus vivendi as far as Lucio Tan is concerned. “There are stories about Lucio Tan you really can’t kill,” says a TV news executive connected with the network. But rather than get annoying calls from Tan’s minions, the station has come up with the policy that “if we’re running a story on Lucio Tan, we pull out his advertisement from that program and put it elsewhere.”

“Mr. Tan has all the right to withdraw his sponsorship of a program if he’s being attacked! ” Mison declares. “Can you imagine listening to a news program that calls Mr. Tan a tax cheat, then it’s brought to you by Tanduay Rhum? You’re paying for that program and then you’re being attacked in that program! Hindi tama (It’s not right)!”

To be fair, there are other advertisers who would not hesitate to use their business clout to whip the media into line. For years, the weekly magazine show ‘The Probe Team’ earned considerable income producing “The Good News,” a regular segment on successful entrepreneurs sponsored by another major broadcast advertiser, Philippine Long Distance Telephone Co. (PLDT). But when ‘Probe’ producers did a story on rival Bayantel and the sorry state of phone services in the country, PLDT immediately withdrew its ads from ‘Probe.’ The PLDT account was small but substantial enough for an independent outfit like Probe, which competes with the established and station-produced programs for revenue. But that was three years ago and time seems to have healed the rift. ‘Probe’ will soon be producing “The Good News” for PLDT again.

Lessons like this teach broadcast journalists especially to be shallow and sensationalistic. Rather than make insightful inquiries into the country’s economic problems and consumer woes that might offend advertisers, television and radio news programs encourage safer stories that deal with sex, crime and entertainment. Many years ago, Fortune Tobacco took ABC Channel 5 to task for airing, on a Fortune-sponsored news bulletin, a story on the harmful effects of smoking. Nowadays, the company would rather subsidize “harmless” ventures like sports news or late night movies than serious news programs.

Pressure from advertisers has also fostered self-censorship among broadcast journalists. A managing editor in an AM radio station says it’s not uncommon for reporters to first check with bosses before covering touchy stories involving big advertisers. Once they hear the advice, “Pare, may account yan(That one has an account)!” they retreat.

In television news and public affairs, executives warn correspondents to stay away from stories that might offend patrons. A story on the cattle industry and the country’s beef supply, no matter how harmless, might anger a major fast-food chain. A report on bottled water may irk a water company, or even the water utility. And the worries go on.

Offending advertisers—any advertiser, really—could be costly. In Lucio Tan’s case, the flight of Fortune Tobacco could mean millions of pesos in potential revenue, plus triple jeopardy. Not one but at least two other major Tan account could go down with it.

Now with Tan rumored on a buying binge—he is supposedly interested in acquiring businesses that include Meralco and Mimosa, PNB and Petron—there may be even less room for journalists to maneuver. Big Brother may truly have arrived.

There’s a postscript to this report. Sometimes, sensitive stories have a way of turning up in the most unexpected places, no matter how hard a reporter avoids it.

As the rest of the country greeted 1999 with fireworks, ABS-CBN reporter Mike Cohen was seated on the steps of the Guesthouse in Malacañang, waiting for a story to take home for his early morning program, ‘Alas Singko Y Medya.’ Earlier, he had gotten clearance from Palace guards and staff to be there for a story about a presidential son who had just moved into Malacañang. Upon arriving there, he was told the First Family was having New Year’s eve dinner with the closest of the president’s friends—the inner circle. And so Cohen and his crew waited.

The party apparently broke up shortly past 2:00 am of January 1, and the First Family was seeing its guests to the door. Who would appear but Lucio Tan with a tipsy President Joseph Estrada whom Cohen overheard telling the tycoon: “Pare, don’t worry about your problems. This year will be better.”

Cohen had no idea what those problems were and probably couldn’t care less. For moments later, his thoughts were on trying to get out of the place fast. The president had seen Cohen and his camera crew recording the whole thing. Estrada’s amiable countenance changed, recalls Cohen, and after Tan left, the visibly furious president demanded that they turn over the tape to him at once. “He was really upset,” says Cohen. “My only thought was on getting out of there alive. What if he hit me?”

Estrada reached down to yank the tape out of the camera himself, and he may be the only one who knows what Cohen and his crew caught on camera that New Year’s morning. But it sent yet another message to media: taipan Tan’s clout goes all the way to the top.