A business law analysis by Sean Marie Prythyll Patnubay | October 27, 2020

As a closeted pageant fan (well, not really closeted but people tend to get surprised whenever they learn that I follow news about it since they say that they never would have expected it from me), I would like to talk about the the largest and most talked about pageant in the world, the universe rather. The Miss Universe pageant is one of the “Big Four” (Willet & Shaw, 2019). [1] If we have the Ateneo, UP, the one in Taft, and there’s a fourth one I’m forgetting about here in the roster of big universities here in the Philippines, then Miss Universe is in the ranks with Miss World, Miss International, and Miss Earth (in the same order of superiority) in the pageant world or you can say pageant-verse. [2]

For fifty-five years (ABS-CBN News, 2019) [3] in the global pageant’s 68-year history (insider.com, 2019), the franchise holder in the Philippines was in the hands of the Araneta Group through Binibining Pilipinas Charities, Inc. (BPCI). By the beginning of the first quarter of 2019, there were rumors circulating about the franchise being already in the hands of Chavit Singson (Rappler, 2019 and Philippine Star, 2019). [4] Following his statement, the Araneta Group was still quick to say that the Philippine franchise was still with them at that point in time. [5]

I think his announcement of such is a similar political or maybe even corporate move to Donald Trump as they are both in the fields of politics and business. It is interesting to note that after co-owning the pageant for nearly two decades and eventually buying out NBC’s 51% of the organization which allowed him full control over the decision-making, Trump sold the pageant because one by one the pageant’s hosts, sponsors, broadcasters, and judges backed out after he made racist comments during his presidential campaign that Mexicans are rapists and criminals (Stuart, 2016) [6] withstanding the numerous testimonials about him being a misogynist and creep during Miss Universe’s Trump Era where he attached greater importance to beauty standards when it should have been hand in hand with substance.

If we talk in terms of our Philippine laws, then the Miss Universe Organization (MUO) really became a one person corporation (OPC) had Trump not been forced to sell it. As a corporation, MUO had its own juridical personality that was separate and distinct from then owner, Donald Trump with limited liability on his person as it was distinct and separate from the corporation’s legal identity which means that he should not be held responsible for MUO’s corporate debts and liabilities. Back then, as an OPC, MUO was able to enter agreements, sue or be sued, among others (and even until now, as a corporation) except that said agreements were cancelled because of the man behind the corporate veil or fiction.

Thankfully and to date, the pageant is currently by under a merged corporation formed in 2014 from Hollywood talent agency, WME and sports and marketing empire, IMG by Ari Emmanuel and Patrick Whiteshell [7] and a talent subsidiary under Endeavor Group Holdings (Koch, 2020) [8] since 2017 [9] which is shifting the paradigm into beauty queens becoming spokespersons of their branding, Confidently Beautiful.

It was only at the end of the last quarter of the same year that MUO announced that while they were grateful to the Araneta Group and the BPCI for over 50 years of stewardship, they are pleased to start a new partnership with a fresh team that will lead the country in its continued quest to share the beauty of the Filipina in their storied stage (MUO as cited in Almazar, 2019). [10]

I would like to think that there was a friendly takeover for the Philippine franchise of Miss Universe Philippines Organization (MUPhO) from BPCI and the Araneta Group since they allowed Gazini Ganados to crown her successor upon request despite the pageant not being under them anymore. Ganados is the last titleholder to represent the Philippines for the Miss Universe pageant under BPCI’s tutelage where she placed in the Top 20 and was named as the best in national costume (Dumaual, 2020). [11]

Although I could not find any relevant information if MUPhO was recently incorporated if at all, I would like to believe that it is and that it meets the four essential attributes of a corporation: 1) it is an artificial being, 2) it is created by operation of law, 3) it has the right of succession, and 3) it possesses powers and attributes that are express, implied, and/or incidental.

In an interview, Mario Garcia, MUPhO’s Business Development/Marketing Head addressed the circulating rumors regarding Chavit Singson owning the franchise. I loved how he clarified that it was in fact, owned by MUPhO. This emphasizes the divide of the organization as an entity separate and distinct from its stockholders and other corporations like BPCI with which it may be associated with or connected to.

Since I am unsure if they are truly incorporated, I would like to go by the fact that MUPhO has Atty. Nad Bronce as the Head of Legal Affairs so I do not think that the SEC registration and incorporation would escape him and seeing as they took the franchise from BPCI which from the name itself signifies that it is a corporation, it would be their reference point along with MUO. For all I know, maybe they really are incorporated but that MUPhO is simply their trade name and that they go by a different corporate name. They might be like the world’s number #1 fast food chain restaurant except in the Philippines whose corporate name is Golden Arches Development Corporation but is more well-known by its trade name, McDonald’s.

As for the right of succession, if we go by BPCI’s track record of holding the franchise for 55 years and MUO’s shares of stock changing ownership from Pacific Knitting Mills down to the here and now, MUPhO should have measures set in place for what would happen in terms of succession and we are not just talking about who succeeds the reigning beauty queens here. Although we could talk about that for a bit even if it is a bit obiter dictum, Rabiya Mateo, 23 from the City of Love, Iloilo City is the newly crowned Miss Universe Philippines last October 25. Her court is composed of Ysabella “Bella” Ysmael (1st runner-up and her duties include taking over the crown should Rabiya, which means queen in Arabic, be deemed unfit or unable to fulfil her responsibilities as the reigning Miss Universe Philippines), a ballerina of Parañaque City with her Bellarinas, Michelle Gumabao from the City of Stars — Quezon City, Pauline Amelinckx from Bohol which is not just a hill after another hill, and Kimberly “Billie” Hackenson from the the cradle of the Philippine revolution and the site of the first successful one, Provincia de Cavite. [12]

Finally, it is safe to say that MUPhO PAPs or to spell it out, it possesses attributes and powers that are express, implied, and/or incidental. As a franchise holder, they have the power to crown a representative for the Philippines to the Miss Universe pageant and because of this, they have to accept applicants from all over the Philippines, [13] look for sponsors, and conduct training and/or seminars for the girls among others. It has even released and streamed the first-ever fundraising pageant series that goes behind the scenes and beyond the spotlight through the Ring Light Series on empire.ph. It has helped the pageant showcase tourism, charity, leadership, and sustainability through going beyond the coastlines with their bevy of empowering and phenomenal women who are harbingers of hope and rallying points.

Other points of interest include but are not limited to people questioning the integrity of the pageant and the timely revision of the Corporation Code.

MUPhO is noticeably composed predominantly, if not in totality, of members from arguably the best beauty queen camp in the country, Aces and Queens. The Creative Director of MUPhO, Jonas Gaffud is known as the Queenmaker and has produced queens like Pia Wurtzbach (Miss Universe 2015), Megan Young (Miss World 2013), and Kylie Versoza (Miss International 2016) when he was still head of the said camp. He announced on April 2019 that he will be leaving the camp after training beauty queens for 18 years (that’s almost as long as I’ve been alive in this world) [14] but skeptics would still raise their eyebrows since the top five girls were mostly from Aces and Queens with the exception of Miss Parañaque City who is from The CAMP (but my friend tells me that she was also trained previously by Aces and Queens before she joined this national pageant). Critics would even point out that there were still some biases present in the pageant and that it should have been a search for Miss Aces and Queens and not Miss Universe Philippines. This is in line with establishing good corporate governance. Since MUPhO is still new, it has yet to establish with its stakeholders the elements of fairness and transparency which is why doubts were raised against them.

On the other hand, it can be said that we need to cut them some slack as the pageant was done in the middle of a pandemic and that they were still trying to work with the political and regulatory environment in these unprecedented times. I think the salient points in the Revised Corporation Code (RCC) were a timely save. As they were just starting up and were struggling to look for sponsors and good partnerships, the fact that the RCC allowed businesses to start with as little capital or funding as possible worked to their advantage assuming that they are, in fact, incorporated. While BPCI had the franchise for more than 50 years, I like to think that there is a forever with the RCC since corporations are now allowed to exist beyond the 50-year term that was provided for in the old code. Personally, I think this amendment is 65 years too late. Had it been codified 65 years ago, it would have eliminated the possibility of ABS-CBN, a legitimate and productive business, from prematurely closing down only because they failed to renew their registration. Now, media censorship continues to happen as per the conditions set by Malacañang in their negotiations that they may operate as long as they do not air news channels and air only entertainment if I am not mistaken. Last but not the least, the occurrence of this pandemic has crippled us due to the measures enforced by the government of locking down borders. Luckily, the RCC allowed participation via remote communication such as videoconferencing and teleconferencing during stockholder and board meetings and in absentia which makes working from home more feasible in this pandemic.

Now, if ever that I did get it wrong and that they really are not incorporated then, they can still take advantage of the electronic filing and monitoring system that is mandated by the RCC. So far, the Securities and Exchange Commission has implemented an online company registration system so MUPhO can now register, apply, or file online if they haven’t already.

With that, I would like to end with a pageant lingo I learned in the past few months: shuppet balur. The change of organization handling Miss Universe Philippines has, if I may say so myself, brought up the level of competition. I think this batch fielded the strongest girls ever to the point that it is safe to say that the shuppet balurs should be and are scared by whoever we would send to the Miss Universe pageant. Using context clues, you may infer that shuppet balur refers to our neighboring countries. MUO choosing to give the franchise to MUPhO may either be their best or worst decision yet best because the Philippines will continue to send their best girls to their pageant but also worst because the winners for the Miss Universe crown might be coming from the Philippines for the next few years. Universe and shuppet balurs, will you ever be ready for us?

References:
[1] Willet and Shaw (2019). THEN AND NOW: How the Miss Universe pageant has evolved over the last 67 years. Retrieved from https://www.insider.com/miss-universe-then-and-now-2017-1

[2] Ibid.

[3] ABS-CBN News (2019). End of an era: After 55 years, Bb. Pilipinas says goodbye to Miss Universe crown. Retrieved from https://news.abs-cbn.com/life/12/10/19/end-of-an-era-after-55-years-bb-pilipinas-says-goodbyeto-mis s-universe-crown

[4] Rappler.com (2019). Chavit Singson: Miss Universe Philippines franchise ‘already with me’. Retrieved from https://www.rappler.com/entertainment/pageants/chavit-singson-philippines-franchise

[5] Rappler.com (2019). Miss Universe PH franchise still with Bb Pilipinas. Retrieved from https://www.rappler.com/entertainment/pageants/miss-universe-franchise-still-with-bpci

[6] Stuart (2016). A Timeline of Donald Trump’s Creepiness While He Owned Miss Universe. Retrieved https://www.rollingstone.com/politics/politics-features/a-timeline-of-donald-trumps-creepiness-while-he-owned-miss-universe-191860/

[7] Most Innovative Companies WME-IMG. Retrieved https://www.fastcompany.com/company/wme

[8] Koch (2020). Endeavor’s WME IMG Takes Another Credit. Retrieved on October 27, 2020 from Hithttps://labusinessjournal.com/news/2020/may/11/endeavors-wme-img-takes-another-credit-hit/

[9] Retrieved from WME-IMG. https://www.forbes.com/companies/wme-img/#38ec93916c34

[10] Almazar (2019). Miss Universe Organization ends partnership with Binibining Pilipinas Charities Inc. https://www.msn.com/en-ph/entertainment/celebrity/miss-universe-organization-ends-partnership-with — binibining-pilipinas-charities-inc/ar-BBXYB3H?li=AAb280R

[11] Dumaual (2020). Bb. Pilipinas allows Gazini Ganados to crown her successor under new franchise. https://news.abs-cbn.com/life/10/19/20/bb-pilipinas-allows-gazini-ganados-to-crown-her-successor-un der-newfranchise

[12] I will not cite this since I drew in from muscle memory but the information was mostly sourced from the Beyond the Coastlines videos.

[13] Rato-Ruffolo (2019). Miss Universe Philippines bares official call for 2020 pageant applicants. https://cebudailynews.inquirer.net/275523/miss-universe-philippines-bares-official-call-for-2020-pagea ntapplicants

[14] Rappler.com (2019). Jonas Gaffud leaves Aces and Queens after 18 years. Retrieved from https://www.rappler.com/entertainment/pageants/jonas-gaffud-leaves-aces-queens