Is KIA the 4th franchise of SMC?

                                                   Photo credit: Philippine Daily Inquirer
 
The quick answer is a NO, they're not. Just like Global Port before when Ramon Ang used to own shares with Manila North Harbor Port, Inc. (see: http://thestandard.com.ph/business/199676/smc-wrests-control-of-port-from-romero.html). There's a catch though...Batang Global Port, the basketball team, is listed as a team owned by Sultan 900 Capital, Inc. While we know Sultan 900 and MNHPI are sister companies - the former partly owned and the latter fully owned by the Romero family - it doesn't equate to SMC being a sister company of Sultan 900.

That's all water under the bridge now. With the recent acquisition of former DLSU bankroller Enrique Razon of ICTSI of the 35% stake of RSA at MNHPI (see: http://www.philstar.com/business/2017/09/23/1741647/ang-divests-manila-north-harbor), Global Port cannot be suspected of being a sister team of the SMC squads. One wonders how much Razon will involve himself with the direct operations of the company - especially when it comes to their basketball team. If he does get involved, then the likelihood of GBP staying in the PBA looms likely.

The same dilemma is now experienced with KIA, the basketball team. The Picantos, according to the PBA, is owned by Columbian Autocar Corporation (CAC). Recently, RSA purchased 65% stake in the local importer and distributor of BMW from Asian Carmakers Corporation (ACC) previously owned by Pepito Alvarez, the owner of CAC. Like Romero at MNHPI, while ACC is a sister company of CAC, it is not a sister company (at least on paper) of any of the SMC teams.

There's a source of concern if SMC is proven to have links with CAC. League rules prohibit any conglomerate to own a fourth PBA team. And this may be one of the topics that may be discussed in the next PBA Board meeting this Thursday, October 26. Critics of the trade deal made by KIA with SMC where the Picantos will give up their top overall pick for 2017 for SMB's Matt Rosser, Ronald Tubid, Yancy De Ocampo and RaShawn McCarthy will obviously find ways to stop this transaction from getting consummated.

The Board has no power to stop trade deals - that job falls on the Commissioner. But of course, the Board has increasingly become more involved with the direct operations of the league so I won't be surprised if they actually do. Or at least, influence Narvasa to veto the deal. But that cannot be done if the issue is if there's imbalance in the trade. Narvasa can simply ask the Beermen to tweak the deal by offering different players - perhaps one starter at least. This has been done before.

But if the other members of the Board decide to raise the ownership issue of SMC at ACC, then the discussion can become complicated. And heated. For obvious reasons, The burden of proof in proving SMC owning CAC in part is with the complainants. We don't know when the purchase will be officially made or if it has taken place already. In the absence of any formal acquisition, that still doesn't make SMC part owner of ACC.

But when it's there, SMC Car Asia will own 65% of ACC. ACC is a sister company of CAC. Wouldn't that make SMC Car Asia a sister company of CAC?

Assuming the link is established (although I doubt it), that would make KIA as SMC's 4th team in the PBA. That perhaps would be the only argument that can be presented to veto / rescind the trade deal. It's not going to be easy though. The Board is made up of underlings of the team owners so issues pertaining to ownership may be beyond the pay grade of the SMC officials involved.

The corporate rival, MPIC Group would also likely take a cautious stand on this as this would impact heavily on the composition of the national team. With the FIBA qualifiers about to start next month, the last thing the Gilas national team (bankrolled by the MPIC Group) would want to happen is to lose key players from their roster - guys like 4x MVP Junemar Fajardo and Japeth Aguilar, two of our most important big men. They'll most likely support any decision to veto the trade, but it won't come from them.

It was Alaska team manager Dickie Bachmann who raised the trade issue. Note though that the flak went to the KIA management, a deliberate approach to avoid running into conflict with the powerful SMC Group. Bachmann questioned KIA's intent on becoming competitive, evidenced by their willingness to go through this lopsided trade.

Will Bachmann raise the ownership issue in the Board meeting, or just bring up the KIA issue? From where we stand, a compromise may be reached in the end. KIA's franchise will be sold to another company (say, Chooks-To-Go) at the end of the season but since the trade deal was made with KIA still an active member, this will be be consummated, with a few revisions in the personalities involved.

KIA goes and SMB and Ginebra will end up establishing a dynastic rivalry that will try to equate with Crispa and Toyota. All's well that ends well, right?

Or is it?

Narvasa's Formula for PBA Relevance: A Redux of Crispa-Toyota?

                                                       (photo credit: Interaksyon.com)

The KIA-SMB trade deal is good as done. There's no way the Picantos will acquire the potential top pick, Christian Standhardinger, simply because they can't afford him. And what better way to not worry about him but by trading him to alleged "sister" team, San Miguel. There are technicalities involved of course - like KIA's declared franchise owner is Columbian Autocar Corporation (CAC) while SMC's 65% ownership, named SMC Car Asia, is through Asian Carmakers Corporation (ACC).

http://business.inquirer.net/233453/san-miguel-take-65-stake-bmw-distributor

The bottomline is that there's a link between SMC and KIA's owner, Pepito Alvarez. And that relationship may actually have a great influence on KIA's decision to trade its first pick with SMB and not with other teams.

But there's no way Commissioner Chito Narvasa can rescind this deal. Unless - the PBA Board on Thursday, October 26, in their meeting, rescinds / vetoes this deal because of the alleged sister team setup. They can't veto the deal if deemed lopsided - SMB will simply offer more sweeteners, not to mention the oft-mentioned "cash considerations" and "salary subsidy." And that's the job of Narvasa, not the Board.

If the Board decides to bring up the issue of SMC's ownership of ACC, expect a heated exchange of words in the conference room. Critics of the deal would claim KIA is now a 4th team of the SMC conglomerate - prohibited in league rules. SMB can argue that the conglomerate's ownership is with ACC, not CAC. Hence, they're not sister teams because ACC has no franchise in the PBA.

And if nothing comes out of this expected discussion and the trade remains, SMB will most likely pick CS as their pick to play #4 alongside 4x MVP Junemar Fajardo, forming perhaps the most feared slot combo in league history. The Beermen nearly won the Slam this year, and if not for import problems in the Governors' Cup, they could've gone all the way. The only team projected to compete against them would be Barangay Ginebra, they with an equally formidable frontline in Greg Slaughter and Japeth Aguilar, plus, Tim Cone of course. In the last PHL Cup, these two tangled in the Finals, a testament to the strength of their local rosters.

No other team would hold a candle against them. Sure, teams like Star, the 3 Metro Pacific teams, and indie teams ROS and ALA, may pull off a surprise or two, but when the dust is cleared, SMB and Ginebra will end up the last teams standing. It's a virtual duopoly in terms of league dominance.

It's a throwback of what the PBA was in its first decade. Two teams, Crispa and Toyota virtually lorded it over the rest, collectively winning the first 10 conferences at stake, and not missing a single Finals appearance until the 2nd Conference of 1984. By this time, Toyota has already disbanded and Crispa was already suffering a financial crisis.

Perhaps, Narvasa has given up hope of coming up with a semblance of parity in the league. Then Deputy Commissioner Tommy Manotoc was the primary exponent of league balance and parity, and he knew what he spoke, having coached U/Tex and San Miguel Beer before handling Crispa in 1983. Manotoc wanted to make sure all PBA teams have the opportunity to win championships - he distributed the Crispa players when the team disbanded after the 1984 season, instead of lumping them all together in the buying team - Formula Shell. He espoused equal opportunity by distributing the top four centers of the league at that time - Ramon Fernandez, Abet Guidaben, Manny Victorino and Yoyoy Villamin. He did away with the handicapping system among imports when many thought it would be disadvantageous to the supposed teams with weaker rosters, but ultimately, it worked out well.

But with SMB and Ginebra ready to flex its muscle on everyone, Narvasa may have conceded that the best road back to relevance for the league is have a dynasty of a rivalry between SMB and Ginebra. Many may argue this won't happen - they're sister teams so how can such a rivalry be possible?

Then again, the biggest rivalry the PBA today is Manila Clasico - aptly called when bitter rivals yet sister teams Ginebra and Star go up against each other. In the 80's and early 90's - when Ginebra and SMB were already sister teams, they had their own heated rivalry as well. So the sibling rivalry argument doesn't hold water.

Hard to argue with those against this looming duopoly because it is counter-productive. So much effort has been wasted already when parity started deserting the league in the early 2000's. Pity Manotoc, the elder Salud (+), and Bernardino (+) who worked hard to giving each team equal chances of winning. Proof? From the period of 1990 to 1992 alone, 7 of the then 8 PBA teams at that time, won championships. Only Pepsi failed to snare a title during that period.

Perhaps Narvasa feels that it's much easier to bring back the fans in the stands when you just need to strengthen the popular teams further and make them form a dynastic rivalry. The more games these two teams play, the better at the tills. Make Star (the other popular team) a perennial darkhorse and Narvasa shoots two birds with one bullet - the popular teams get to dominate and SMC management would be happy.

More than anything, I'm convinced the most challenging in any Commissioner's job description is to keep the SMC owners happy. A couple of years back, SMC threatened to withdraw from the league in the aftermath of the Renaldo Balkman incident (http://sports.inquirer.net/90789/san-miguel-corp-mulls-pulling-teams-out-of-pba). It may have taken a lot of ego-massaging on the PBA's part to appease management. For no matter how one cuts it, an SMC pullout would mean signing the league's death warrant.

So while we all disagree that this potential "dynastic rivalry" will be good for the league in the long run, I won't be surprised if this in the Commissioner's mindset as his way of "saving the league."