Biz Buzz: A P659-million ‘ouch’
You know that a business dispute over money is starting to get really serious when the courts start to get involved and actually issue orders to seize the funds of either side.
Such is the case, apparently, in the ongoing legal tussle between ABS-CBN Corp. and Solar Entertainment Corp. over the latter’s allegation that the Lopez family-controlled broadcast giant owed it a ton of money for the airing of National Basketball Association (NBA) games on cable TV over a period of several years.
Biz Buzz learned that the Tieng family-owned Solar Entertainment was able to obtain a garnishment order from the Mandaluyong regional trial court (RTC) on the bank accounts of ABS-CBN and its cable TV service unit Skycable “to secure payment of carriage fees” for the “unauthorized broadcast” of the BTV and NBA Premium channels.
And how much was ordered garnished by the court? Brace yourself. A total of P659 million worth of ABS-CBN’s funds, according to Solar’s legal team. Ouch! That’s got to hurt.
Biz Buzz checked with the broadcast giant, which confirmed this development, saying that they did, indeed, receive an ex parte writ of attachment and notice of garnishment from the Mandaluyong RTC late last week.
That naturally sent their lawyers scampering to contest the court order and—to the sound of sighs of relief at the network’s corporate offices—managed to convince the judge to lift the freeze order a few days later.
Recall that Solar had previously entered into a deal with the NBA in 2010 for the former’s right to broadcast basketball games in various platforms. The contract ended in 2014, a new contract was entered into between Solar, NBA and ABS-CBN. Under the new contract, Solar would continue to broadcast the games over Basketball TV and NBA Premium, which ABS-CBN would broadcast over Channel 2 and ABS-CBN Sports + Action.
There the problem began. According to Solar, ABS-CBN immediately stopped paying it “carriage fees,” saying that the license fee ABS-CBN paid NBA already included the fees payable to Solar.
Biz Buzz did a little digging and learned that the contract signed by the parties involved was simply silent on whether either ABS-CBN or Solar were still in a commercial relationship involving money.
Supposedly, the contract didn’t specify any payments from ABS-CBN to Solar for the new deal. ABS-CBN assumed that, since they were paying NBA so much, it already covered the obligations to Solar. Solar, meanwhile, simply assumed that the previous arrangement was still in force—an “implied contract”, if you will.
(“The entire agreement was on a one-page term sheet that was silent on the issue of payment,” said one party familiar with the dispute.)
Recognizing this little contract loophole, ABS-CBN’s people say they’ve been trying to settle the issue amicably by offering Solar a settlement payment, less than what Solar is billing it. The Tiengs, meanwhile, want to be paid the whole amount.
The moral of the story? Where big money is involved, both parties should probably iron out the nitty gritty and have a more specific contract. More specific than a one-page term sheet. —DAXIM L. LUCAS
Leechiu manages NEX Tower
The newest office building rising along Ayala Avenue is being marketed by no less than one of the hottest property management talents in the local market, David Leechiu, Biz Buzz has learned.
Leechiu—whose business has been on a steep upward trajectory after deciding to “g0 it alone” last year—told this column that NEX Tower will be offered primarily to corporate clients, many of which have been clamoring for more “grade A” office space in the central business district.
While he concedes that offshore gaming firms are some of the most aggressive tenants for office space nowadays (aggressive in terms of snapping up supply and rarely balking about the price), Leechiu Property Consultants or NEX Tower is not currently in discussions with online gaming firms or virtual casinos.
Owned by businessman and real estate developer Ricardo Cuerva, NEX Tower is a 28-storey office building rising on one of the last two vacant properties along Ayala Avenue. The building is designed by SOM, the New York-based architecture firm behind 1 World Trade Center in Manhattan and the Burj Khalifa in Dubai.
Incidentally, Cuerva carries three decades of prime construction experience. He is well known as the builder of the first project to be completed in Bonifacio Global City, the luxury residential condominium Essensa.
According to the firm, NEX Tower “aims to redefine Ayala Avenue as the premier commercial hub of Metro Manila.”
Leechiu says he is currently in negotiations with several blue chip multinational corporations that seek to establish their headquarters in the heart of Makati. In addition to the state-of-the-art office floors, the retail podium at ground level will have a selection of premium locators such as a specialty cafe and a modern bistro.
“The new development seeks to engage the business and residential community around it and reenergize Ayala Avenue,” he said.
“The country’s premier business address is lined with a number of aging buildings that are ripe for redevelopment. NEX Tower seeks to spark a renaissance in Makati and reestablish it as the foremost central business district of the nation.” — DAXIM L. LUCAS
Third party interest
The controversy over the supposedly anomalous deal between Tagum Agricultural Development Co. (Tadeco) of the wealthy Floirendo family of Davao and the Bureau of Corrections (Bucor) came to light a few weeks ago, no thanks to the very public spat between House Speaker Pantaleon Alvarez and Davao del Norte Rep. Antonio Floirendo Jr.
As many now know, both gentlemen used to be the closest of allies, with people sympathetic to Floirendo pointing out that it was even the Davao businessman who helped the current House Speaker with his political campaign in the most recent elections and, more importantly, when the latter was supposedly “down and out” during the years of the previous administration.
Well that’s all gone down the drain now, due to a large degree to the catfight between their respective lady friends.
In any case, the full blown investigation is now ongoing to determine whether the Floirendo family’s Tadeco—the country’s biggest producer of bananas—should indeed be paying the government more for the use of Bucor’s land.
Biz Buzz heard, however, that this early, there’s already someone else interested in stepping into Tadeco’s place in case the government annuls the deal with Bucor.
We heard that a Chinese-Filipino businessman wants to take over Tadeco’s lucrative Bucor land agreement in case the current deal falls through. And this businessman is so eager for it that he has already put out P100 million to… uhm… help things go his way. Wow. Watch this space, folks. —DAXIM L. LUCAS
