You’ve heard of former ABA owners Ozzie and Daniel Silna: they’re the one-time owners of the Carolina Cougars, which became the Spirits of St. Louis. When the NBA merged with the ABA in 1976, the Silnas agreed to dissolve their franchise for $19 million and 1/7 of the league’s TV revenue.
The TV deal wasn’t considered that significant at the time. But the agreement was in perpetuity, and since 1976 the Silnas have received an estimated $300 million in TV royalties. The deal has become legendary: ESPN has done a “30 For 30″ segment about it, and the NBA has been trying to wriggle out of the contract since the 1980s.
And now the league is stepping up its efforts to settle.
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.
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 Spirits of St. Louis featured star players such as Marvin Barnes, Maurice Lucas and Moses Malone, and in 1975 a first-year broadcaster named Bob Costas did play-by-play. The Silnas bought the Cougars for $1 million in 1973 before moving the team to St. Louis, and received a reported $19 million from the NBA to dissolve the franchise … sort of the equivalent of selling your house to make room for a freeway. But there’s more craziness in this deal. ESPN:
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.”
Of course the Silnas were millionaires before any of this happened: they made their money in the textile industry, pioneering the manufacture of polyester. I cannot think of a more American success story than this.