NBA BOX OUT | Court orders ABS-CBN, SkyCable bank accounts, assets garnished in Solar case

May 30, 2017 - 4:53 PM

MANILA – The Mandaluyong Regional Trial Court has issued an order to garnish the bank accounts and other assets of ABS-CBN and its cable affiliate, Sky Cable, for airing the BTV and NBA Premium TV channels of Solar Entertainment Corporation without paying the carriage fees for approximately three years.

The order, signed by Judge Monique Quisumbing-Ignacio on May 16, also required Solar, the local distributor of NBA games and programs these past 16 years, to post a bond for P659 million, the amount it is trying to collect.

Solar said in a statement Tuesday that Sky Cable continued to air and make money on the NBA shows using Solar’s own channels, BTV and NBA Premium, although its carriage contract ended in 2014.

Solar continued to feed its two channels and to bill Sky Cable, believing there was an “implied renewal”, an industry practice to prevent a sudden blackout of TV channels and a service disruption to subscribers, it added.

On March 1, 2015, Sky Cable also stopped paying the carriage fees of Destiny and Unicable that had their own contracts with Solar before they were acquired by Sky Cable, according to Solar’s statement.
Last April, Solar finally stopped its NBA feeds to Sky Cable after several demand letters allegedly went unheeded, and realizing that Sky Cable was intent on not paying. Now, only paying cable stations like Cignal, GSAT, and Dream, among others, can carry its channels, Solar said.

In its complaint, Solar alleged that the respondents did not want to pay because they wanted Solar to lose its license by default from NBA Properties, Inc. of the US, so that ABS-CBN and Sky Cable could take over.

ABS-CBN, it added, also offered to buy Solar’s NBA rights and licenses in July last year.

‘No effective garnishment’ – ABS-CBN

In a statement issued Tuesday afternoon, ABS-CBN said that as of press time there is no effective garnishment yet of its assets because it had filed an urgent motion in court as soon as it received the court order.

“ABS CBN and Sky Cable received an ex-parte writ of attachment and notice of garnishment from the Mandaluyong Regional Trial Court on Thursday, 25 May 2017, in connection with the collection complaint of Solar Entertainment Corporation.ABS-CBN and Sky Cable immediately filed a motion to lift the attachment and garnishment on the morning of May 29, which the court granted on the same day,” said the statement from the network.

“Thus, at this time, there is no effective attachment or garnishment over any asset of ABS-CBN or Sky Cable,” it stressed.

The statement elaborated: “In 2014, ABS-CBN and Solar jointly entered into a license agreement with NBA Properties Inc. Since ABS-CBN was paying 60 percent of the license fees, it considered that the same already covered the carriage fees of Sky Cable. Unfortunately, Solar disagreed. Despite the good faith attempts of ABS-CBN and Sky Cable to resolve the dispute amicably, Solar cut off the NBA feed to Sky Cable and filed this complaint.”

The network said it will submit its “answer with counterclaims to this complaint,” and was “confident we will prevail.”

ABS-CBN, Sky ‘one and the same’

Solar said ABS-CBN was not a party to its agreement with Sky Cable but the television network would at times interfere by replying to Solar’s letters, “clearly show(ing) that Sky Cable and ABS-CBN are one and the same”.

The complaint said Sky Cable and ABS-CBN “unjustly enriched” themselves by earning from Solar’s feeds.

ABS-CBN, it added, cannot claim to have any right to allow Sky Cable to air and exhibit BTV and NBA Premium TV channels because the right granted to ABS-CBN was limited to airing NBA games only on Channel 2, its Sports + Action channel, and a “non-NBA branded pay TV channel” still to be developed.

What is clear, however, Solar said in its statement, is that “it is our two channels that they are airing and nobody can carry our channels without paying.”

In ruling in favor of Solar, the trial court said:

“It needs to be stressed herein that the expiration of the Channel Carriage Agreements and the execution of the Television License Agreement with NBA did not relieve Sky Cable of its obligation to pay channel carriage fees. The basis of the channel carriage fees is Sky Cable’s continuous airing of NBA Premium TV and BTV which was tolerated by SOLAR. This created an implied contract between the two. ABS-CBN in collusion with Sky Cable had no intention to pay such channel carriage fees as their objective is to become the exclusive licensee of NBA, thereby gaining full control and exclusive rights to the broadcast of NBA games in the Philippines.”