Sources: NBA tries to end costly ABA deal
The NBA is currently engaged in settlement talks with Ozzie and Daniel Silna to end a contract that has long been described as "the greatest sports business deal of all time," according to sources close to the situation.
The NBA is engaged in settlement talks with Ozzie and Daniel Silna to end a contract that has long been described as "the greatest sports business deal of all time," according to sources close to the situation.
No agreement has been reached, but talks are ongoing.
The Silna brothers are the former owners of an old ABA franchise known as the Spirits of St. Louis. When the ABA merged with the NBA in 1976, the Silnas agreed to dissolve their team in exchange for a small percentage of the NBA's future broadcast revenue.
At the time, it seemed like an irrelevant concession by the league. But it's become a financial windfall for the Silnas. They receive 1/7 of the television revenues of the four ABA teams that were absorbed: the Spurs, Nuggets, Nets and Pacers. The NBA currently has $7.4 billion in TV contracts with ABC/ESPN and TNT.
The kicker in the Silnas' deal is that it goes on in perpetuity.
Last season, the Silnas, who bought the Carolina Cougars for $1 million in 1973 before moving the club to St. Louis, received a reported $19 million from the NBA.
Since the deal was reached in 1976, the league has paid the Silnas $300 million in TV royalties. Recently, a judge ruled that the brothers also have rights to Internet revenue.
Because the Silnas' cut diminishes the dividends of the NBA's 30 team owners, the league has long sought to settle the contract.
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