Co-branding possible in PBA

MANILA, Philippines - The PBA isn’t closing its doors on the possibility of co-branding but will insist on a participation of at least 33 percent in the ownership of a participating partner by the main franchise holder.

A league source said the other day there are several groups interested to join the PBA particularly as the league is just a year away from celebrating its 40th anniversary and coming off a record-breaking season. The blueprint is to expand to one or two or three more teams within the next three years.

While expansion is a priority in PBA chairman Ramon Segismundo’s agenda, the league won’t rush it. The PBA has maintained its core of 10 franchises since 2000. The league opened with nine teams in 1975, namely, Royal Tru-Orange (the San Miguel Corp. group), Tanduay, CFC Presto, Crispa, Toyota, U-Tex, Mariwasa, 7-Up and Concepcion Carrier. The membership dwindled to six in 1985 before rebuilding to eight in 1990 to nine in 1999 and finally, to 10 at the beginning of the millennium.

The league has welcomed guest squads through the years, including the Philippine team, Emtex Brazil and Ramrod Australia in 1977, Nicholas Stoodley and Adidas France in 1980 and Nicholas Stoodley South Korea in 1982. The only commercial bank to own a PBA franchise was the Filipinas Manufacturers Bank or Filmanbank which played two seasons then was acquired by Pilipinas Bank, later taken over by Prudential Bank and eventually by Bank of the Philippine Islands. Soft drink brands Coca-Cola, Pepsi-Cola, 7-Up and Pop Cola also had teams. Fans are awaiting the return of a bank and a soft drink brand to the PBA fold.

A source said at least three PBA D-League teams are considering to upgrade and enter the PBA. One PBA D-League team owner is studying the possibility of partnering with another group to pursue the co-branding approach. “One brand could be used for two conferences and another brand for the third,” he said. “It will depend on whether our sales can justify the budget. I’m informed that the budget for a PBA team is anywhere between P70 to P100 Million a year. The share of each team from revenues is about P30 to P40 Million so the balance has to be absorbed by the franchise as an advertising expense which is justifiable only by projected sales.”

The PBA will allow co-branding only if the brands are jointly owned. It will not permit a franchise holder to use brands where the owner has no equity. “The only way the PBA will sanction co-branding is if the franchise owner has at least a 33 percent stake in the partner company that owns the other brand,” said a PBA source. “Otherwise, it’s not possible.”

Last season, the PBA generated ticket sales of about P200 Million which broke the previous year’s mark of P114 Million. PBA commissioner Chito Salud attributed the breakthrough to the improvement in the quality of play, competitive balance with three teams winning the three different conference championships and the three-conference format. The basketball boom – triggered by Gilas’ qualification to the FIBA World Cup, the staging of the NBA preseason game in Manila and the visits of NBA stars like LeBron James, Kobe Bryant and Derrick Rose – was also cited as a contributing factor.

A milestone in the PBA’s history was the record attendance of 23,436 that packed the Smart Araneta Coliseum for Game 3 of the Commissioner’s Cup finals between Alaska and Barangay Ginebra last season. That erased the previous mark of 23,108 that witnessed Game 7 of the 2008 Fiesta Cup finals between Barangay Ginebra and Air 21. The season was marked by several crowds of over 20,000 as the PBA enjoyed a resurgence of interest reflected in higher TV ratings, more media mileage and a growing nationwide audience covering a wide range of age groups. The PBA’s outreach program went beyond provincial sorties and took the roadshow abroad to OFWs.

It will take a majority vote from the PBA Board of Governors to approve the entry of a new franchise holder. “There are two ways to join,” said the league source. “One is to buy an existing franchise and we understand at least one group is reviewing this route. Another is to buy a brand-new franchise. There are costs involved in both approaches so an interested party has the option to decide which route to take depending on his available resources. We know of one group that is extremely interested to join but is not allowed to because of the Board’s policy on non-competitive brands. We also know of one group that has a large nationwide presence studying the possibility of joining but probably won’t make a decision until two or three years. Two of the three PBA D-League teams inquiring about joining are looking at their sales to justify the investment. The third team has the resources to join but is still evaluating the impact of its participation.”

Another league source said the time to join is next year when the PBA celebrates its 40th anniversary. “That’s a major landmark,” the source said. “The PBA will name its 40 greatest players. There will be several events to mark the milestone anniversary. The media mileage will be phenomenal. It will be the season after Gilas plays in the FIBA World Cup and the Asian Games so the entire country will be on a high. If basketball was big in the Philippines in 2013, it will be bigger in 2014.”