All about transparency

There are no secrets among the team representatives comprising the PBA Board of Governors and that’s the way it should be. Transparency is essential for every governor to trust each other in making decisions for the good of the league.

Air21’s bid to rename the Express to Burger King is premised on the assumption that franchise owner Bert Lina has principal business interests in both products.

Air21 president Lito Alvarez, next in line as PBA chairman, has submitted documents to prove the lineage. The contention is Burger King is owned by a holding company where Lina has majority control, just like in Air21.

If the documents show foolproof evidence of Lina’s control, then there will be no need to pay the PBA any kind of transfer fee under the common ownership rule. If that’s the case, all it takes is a one-conference notice to make the product change. An exception to the one-conference notice may be made on condition the franchise owner pays the PBA for whatever is the value of the property inventory of the previous product.

If there is a change in franchise ownership such as when Shell sold its seat to Welcoat (now Rain or Shine), the PBA will impose a transfer fee or tax equivalent to 10 percent of the purchase price or if the amount is undisclosed, 10 percent of the indicative franchise price of P60 million.

A one-year notice is required for a new team to play under the transfer rule. If it is proved that Burger King is not a subsidiary of the holding company where Lina is the majority owner, then the transfer rule will apply. This will also require the PBA to process the application meticulously. A fee will be paid to the PBA for the deal to push through as in the Coca-Cola and Shell precedents.

In the case of a new franchise joining the league without buying an existing team, the fee is P60 million.

By the way, the one-conference and one-year notice requirements are subject to review and are not hard rules, according to PBA media affairs bureau chief Willie Marcial.

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PBA legal counsel Melvin Martin is now looking over the Air21 documents before submitting his recommendation to the Board. From all indications, the papers are in order.

If the finding is conclusive that Lina has majority control of both Air21 and Burger King, then only a notice of change of name is required to baptize the Express as the Whoppers next conference. No vote from the Board is necessary to effect the change.

However, there appears to be a question on the relationship between Burger King and Talk ‘N’ Text because of common shareholders. On record, it is PLDT that owns the Talk ‘N’ Text franchise in the PBA, not Manny Pangilinan or Ricky Vargas who are listed as Burger King shareholders. It may be argued, therefore, that an arm’s length relationship exists between Burger King and Talk ‘N’ Text.

But in the spirit of transparency, it appears prudent to consider a “sister” relationship between Burger King and Talk ‘N’ Text particularly in light of player trades. Because of common shareholder interests, it may be judicious to disallow direct player trades involving the teams – in the same way that the rule applies to San Miguel Beer, Barangay Ginebra and Purefoods which show a common ownership.

Of course, it may also be argued that in the extreme extension of trust, all teams – regardless of common owners – should be allowed to freely trade players but that couldn’t be accepted in an imperfect world such as ours.

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And as the Board is in the process of approving the switch to Burger King, perhaps it could also review the status of Purefoods as a non-voting member. At the moment, Purefoods is allowed to participate in Board discussions but not permitted to vote because of the limit of common ownership to two teams.

In the same spirit of transparency being invoked in the Air21-Burger King transfer, surely nobody will doubt the impartiality of Purefoods in voting on issues of league interest, particularly on policy and business matters. Purefoods may still be disallowed from voting on game-related issues but certainly, not on issues that concern the league’s well-being.

After all, transparency is what holds the Board together and leaving Purefoods out of the voting circle on policy and business matters appears to be indicative of some distrust which has no place in the chambers where the league’s fate is ultimately decided.