14 March 2025

How Can A Company Acquire A PBA Team?

Starhorse
Rumors about Starhorse Shipping Lines trying to acquire a PBA franchise has sparked speculation around the league.

Will they acquire the underperforming Terrafirma team, which has been suspected as a farm team? Can they acquire an existing team lock, stock and barrel? Will the league approve such a sale of existing franchise? Or will the players be dispersed among the remaining teams once the sale is consumated?

Lots of questions, but what is certain for now is that the league has been dominated by sister teams, which disgust lots of basketball fans. The dwindling PBA attendance is a good indicator of the public's waning interest.

Any takeover or sale will dictate the fate of the players. If the franchise is sold lock, stock and barrel, all of existing assets from players to draft picks will go to the new owner; in the event of a franchise sale, the players will be distributed in a dispersal draft.

Over the years, most of the younger franchises have entered the league by acquiring an existing franchise, namely Rain or Shine (bought Shell in 2006), Phoenix (bought Barako Bull in 2016), NorthPort (Powerade), Meralco (Sta. Lucia), and NLEX (Air21).

Most companies interested in joining the PBA have favored this route over the acquisition of expansion franchises, which were last made available to Ever Bilena Corp. (Blackwater) and Columbian (Terrafirma) in 2014.

Probably part of the reason is that existing franchises not only come cheaper (old franchises, insiders say, may be available at less than the PhP 100 million price tag for new ones) but also offers existing assets like players and draft picks.

Tempting, right?

However, any company that makes a bid to buy an existing franchise, either through a deal with the company or brokered by the league, will have to go through a stringent process before being officially accepted as a new PBA member team.

First, the buyer will have to undergo due diligence from league-appointed auditors who will be tasked to determine if it has the financial capability not just to buy the team but also to maintain a PBA ballclub long term (insiders bare annual expenses including salaries can go as much as PhP 100 million).

"Open books 'yan," said Commissioner Willie Marcial.

If the potential buyer passes that scrutiny, the company will still need a two-thirds vote from the board to become a new member. That means representatives of eight of the 12 member teams must vote you in (insiders bared it used to be 2/3 vote from the board for expansion members and 3/4 for buyers of existing franchises, but Marcial said only a 2/3 vote is needed by any company that buys an existing franchise).

In most cases in the past, a potential buyer also has to comply with additional conditions put up by the board, which, for example, mandated expansion sides Blackwater and Columbian to post a bond reportedly worth P100M which would've been forfeited if they decided to discontinue their participation in the first five years.

The path figures to be harder for a company like BAVI, which has been very active in the basketball scene under the Chooks to Go banner, because of the 'lockout clause' that gives a PBA member team the right to veto the application of a direct competitor.

A check with the league showed the lockout provision still exists, although it has been waived in the past in the case of Tanduay (which entered the league in 1999 even if San Miguel is a direct competitor) and Phoenix, which was blocked in 2011 by Petron but cleared in 2016 after Petron reverted to San Miguel Beer.

Fortunately, Starhorse Shipping Lines has no competition in the league.

Founded in 2008 by the late Victor Reyes, Starhorse Shipping Lines is a domestic shipping company based in Lucena, Quezon.

Following Reyes’ passing in 2016, his wife Merian and son Dominic took over the business.

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