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    How hard is it to be accepted as a new PBA team? Go ask ROS, Phoenix

    Buying a PBA team isn't as simple as paying the P100 million-plus franchise fee
    Jul 19, 2020

    MOST basketball fans believe that for a company to field a team in the PBA, all it has to do is cough up the eight-figure price for a franchise.

    What they don't know is that it only gets harder from there.

    As talks of potential new teams heightened in the wake of Blackwater team owner Dioceldo Sy's decision to sell his six-year old franchise, it's as good a time as any to revisit the process in which new members are accepted in Asia's first pro league.

    Since we're talking about a possible acquisition of the Blackwater franchise, let's start with the process in which the sale of existing teams are consummated - from the negotiations between buyer and seller to the approval of the league board.

    Phoenix, the league's youngest team, coughed up a reported P100 million to acquire the Barako Bull franchise from the Lina Group. Sy said he's willing to part with his franchise for P150M. Definitely not loose change, especially during this pandemic.

    Once the two parties reach an agreement, the tedious process of gaining board approval begins.

    Tha basic premise is that any company wishing to enter the pro league must gain board approval via two-thirds vote. Under current circumstances, that simply means that eight of the 12 existing franchises must vote you in.

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    Before the vote takes place, there are some procedures that need to be done, foremost of which is the due diligence on the buyer's capability to maintain a PBA team which, according to estimates, could run up to P50 million a year.

    That figures to be a breeze for mega companies in the San Miguel Corp. and PLDT level, right? Or for entities like Alaska and Rain or Shine?

    Wrong.

    According to league old-timers, a company with the financial muscle of Asian Coatings Corp., owner of Rain or Shine, still encountered problems owing to a 'technicality' before gaining board approval to take over the Shell franchise in 2006. The company, according to old-timers, was also asked to put out a P60 million bond for five years, P7 million as participation fee and another P6 million as transfer fee.


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    The path figures to be more difficult for companies that are direct competitors of existing PBA teams. A check with the PBA Commissioner's Office showed a provision in the league by-laws locking out applicants that are in direct competition with existing member teams is still in place.

    That was the problem that Phoenix Petroleum of Dennis Uy encountered the first time it knocked on the PBA door in 2011, since SMC's flagship team declared that it planned to fly the colors of sister company Petron at that time. The sale only proceeded five years later or in 2016, after Petron switched back to San Miguel Beer.

    That provision also figures to create problems for a company like Chooks-To-Go, which is being mentioned as a possible buyer of the Blackwater franchise. Chooks is a direct competitor of Magnolia and may unlikely get clearance unless the latter steps aside or the board gives a special exemption, according to insiders.

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      How about expansion franchises, you might ask?

      Well, the last time the PBA expanded its membership was in 2014, when it opened its doors to Blackwater and Columbian. Both not only had to shell out P120M for a franchise, they were also made to put up a bond, reportedly worth P100M, that both would forfeit if they decide to sell their franchise for the next five years.

      That provision, by the way, lapsed last season, clearing the way for either Columbian or Blackwater to sell their franchises, in case they want to.

      But with the way the two expansion franchises have fared over the past five seasons [both have not contended for a championship, or even made the Final Four], it is unlikely the board is entertaining another expansion in the foreseeable future.

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        In the end, membership in the PBA boils down to the vote of the existing members. And considering there are two major blocks right now owning three franchises each - or a few more if you believe insider rumors, any company entertaining thoughts of joining the PBA must gain the support of both groups.

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        Otherwise, any ownership bid is doomed to fail.

        Get more of the latest sports news & updates on SPIN.ph

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