THE Supreme Court (SC) has declared that the Philippine Basketball Association (PBA) is liable to pay the Games and Amusement Board (GAB) the amount of P3.4 million representing GAB’s three-percent share in the pro-league’s receipts and income from television/radio broadcast for 2002.

The PBA is an association of various basketball clubs owned by business companies, including Alaska Milk Corporation, Ginebra San Miguel Inc., Purefoods Hormel Company Inc., San Miguel Corporation, and Sta Lucia Realty and Development Inc.

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The High Court ruled that the PBA has to pay up its obligation, regardless of whether or not it has received the gross receipts from its broadcasts.

It affirmed the July 28, 2005 ruling of the Court of Appeals (CA) dismissing its petition assailing the Office of the President’s (OP) resolution in favor of GAB.

The PBA, according to the SC, should have appealed the ruling of the OP to the CA within 15 days from notice, and its failure to comply with the prescribed process is a ground for dismissal of its petition.

“As a pure statement of fact and without any pejorative meaning intended, the remedy the PBA used appears to us to be an error of counsel that the PBA -- the client -- wholly bears. It is absolutely incorrect to claim that Rule 43 does not allow an immediate remedy if that had been the result desired. Section 12 of Rule 43 expressly allows the CA to order a stay of execution upon such terms as are just,” the SC ruled.

It explained that under Presidential Decree (PD) 871 issued by former President Ferdinand Marcos, professional basketball and other professional games shall be under the control and supervision of GAB.

The same decree mandated GAB, among others, to issue permits for the conduct of games and licenses to persons, entities, and associations performing duties connected with professional basketball games or with other professional games.
 
On the other hand, PD 871 obliged the PBA and other professional game associations to remit three percent of their gross receipts and income from television, radio, and motion pictures, if any, which shall be used to defray expenses of the GAB.

However, the court litigation stemmed after the PBA failed to comply with its obligation under PD 871 due to the failure of its franchisee, Viva Vintage Sports Inc. (VVSI), to pay its franchise fees.

Due to this, the PBA failed to remit the said amount to GAB. Pending resolution of the dispute, the PBA deposited in escrow the disputed amount.

Records showed that in December 1999, the PBA and VVSI formed a memorandum of agreement (MOA) granting VVSI exclusive rights to broadcast the PBA games on television and radio for 2000-2002 PBA seasons.

Initially, VVSI paid the franchise fees to the PBA, and from these, the latter remitted the required three percent to the GAB.

But, starting November 2001, VVSI failed to comply with its obligation to pay franchise fees to the PBA which resulted in the latter’s failure to remit to the GAB three percent of its gross receipts and other income.

This prompted the PBA and GAB to bring the issue to the OP for proper adjudication.

The two subsequently entered into a MOA where the PBA agreed to deposit the amount being sought by GAB in escrow with the Equitable-PCI Bank which will be released to GAB under certain conditions.

In 2004, the OP ruled in favor of GAB which immediately sought the release of the funds being held in escrow.

However, the PBA refused to accept the OP’s decision and decided to file a petition before the CA questioning the same.

The CA, on the other hand, affirmed the OP’s resolution saying that there was no grave abuse of discretion on the part of the latter in favoring GAB on the issue. (ECV/Sunnex)