Back in the days before the 1976 merger of the NBA and ABA, the senior league demanded that the owners of the four teams selected to join the NBA buy out the remaining teams --the Virginia Squires, Kentucky Colonels and Spirits of the St. Louis.
The Squires folded. The Colonels' owner went quietly. Owner John Y. Brown agree to accept $3 million in cash. He later married Phyllis George and successfully ran for governor of Kentucky. The Silna brothers, owners of the Spirits, and their lawyer had a different idea. They wanted one-seventh of all national TV revenues from the remaining four teams -- the Denver Nuggets, San Antonio Spurs, Indiana Pacers and New York Nets ... in perpetuity, that is, forever. Considering how little the NBA was making from TV rights, it seemed like a good idea at the time. It wasn't.
Every year, the four teams had to fork out a big chunk of their national TV rights, giving then 14 percent less than the league's 26 other teams. It had a big effect on the Nets revenues.
It's been called the greatest sports deal ever. Jon Wertheim of Sports Illustrated reported on Friday that the Silnas had made more than $300 million through last year -- with no end in sight. Indeed, last year, the Silnas asked for more. They wanted cuts of the NBA's international TV rights and online rights packages too. They sued and it looked like they would wiin
So finally, last week, Wertheim reports, the NBA and the teams made a deal, agreeing to pay the Silnas a reported half billion dollars and a much smaller part of the four former ABA teams' revenues from the league's new TV contract, which goes up for bid in 2016. Total cost, with the rights, the settlement and the smaller take from the Nets and three other teams: an estimated $1 billion, reports Wertheim.
Officially, league sources won't confirm the deal, wouldn't provide any details, including whether the Nets will pay any of the settlement cost. But what seems assured is that settlement will give the Nets, Spurs, Pacers and Nuggets equal footing with the league's other 26 teams for the first time on the biggest single source of team income. As Rod Thorn once said, the amount lost to the Silnas wasn't inconsequential when the Nets were looking at finances.
No matter what the final bill, Wertheim notes, the original deal is likely to be taught in law schools --in perpetuity-- as a classic case of the danger of contracts without termination periods.
- Best sports deal ever? How the Silnas outsmarted the NBA - Jon Wertheim - Sports Illustrated