NBA To Pay $500 Million To Get Out Of The Worst Deal Ever Signed
Let me tell you a story about two geniuses.
Ozzie and Daniel Silna owned the ABA's Spirits of St. Louis, but when the NBA merged with the ABA in 1976, the Spirits were one of two teams the owners didn't want to join. The owner of the other team, the Kentucky Colonels, took a $3 million payment. But the Silnas negotiated something a little different. They took just $2.2 million, plus one-seventh of all future TV revenue for the four ABA teams joining the NBA. Basketball blew up not long after, and that small fraction of TV royalties has netted the Silnas $300 million so far, with payments set to continue on forever.
The NBA has long tried to get out of the infamous arrangement, which paid out a reported $19 million last season alone. In recent years, it has threatened to become even more onerous—the Silnas filed suit for a share of revenue streams that didn't exist in 1976, like international TV deals and online streaming. Now, says the New York Times, they're close to a buyout.
It's not cheap. The NBA will give the Silnas a reported $500 million dollars up front to drop their lawsuit. The Silnas will retain an unknown but smaller share of TV revenues, but the NBA will have a future option to buy them out.
When it's all said and done, shortsightedness will cost the NBA near a billion dollars. But consider it a hedge. The alternate reality, where the payouts to the Silnas remained small, was a world in which the NBA didn't become big enough to sign $7.4 billion TV contracts.
Wow didn't know about that
That is awesome. Talk about foresight.
I wouldn't give them a buyout.
A great deal for te two guys who made the original investment. Kentucky Colonel owners were foolishly impatient and signed rights away for $5M. Think about that.
Hold UP... Isn't that Maurice Lucas in the middle, wearing #20?
Joe Caldwell, third from the right, one of the most under appreciated frontcourt players of all time.
who could forget Marvin Barnes?
what a squad
Man, I wish I had that kind of foresight! It's like those stupid Bitcoins- I should have bought some back in the day.
My anticipation of the future is terrible though, when a work colleague first showed me something called 'Facebook' back in 2006, I told them it would never take off because "it's just photo's of people". Going back further I though cell phones were also doomed to failure because "why would anyone need a phone all the time?!"
misterearl wrote:A great deal for te two guys who made the original investment. Kentucky Colonel owners were foolishly impatient and signed rights away for $5M. Think about that.Hold UP... Isn't that Maurice Lucas in the middle, wearing #20?
Joe Caldwell, third from the right, one of the most under appreciated frontcourt players of all time.
who could forget Marvin Barnes?
what a squad
Yea Mista, that is Mo Lucas leaning on the plane
Marvin "Bad News" Barnes he also played for the Buffalo Braves back in the day.
The guy in the white suit looks like Eli Manning.
playa2 - "News" is wearing goggles. (We could use his talents now)
Hey, that IS Eli Manning!
Was the NBA really that stupid? As long as the league was moderately successful 1/7 of TV revenues for the four teams is a hell of a lot more than 3 million dollars. If the NBA believed the association had a good chance of being successful (which they must have if they were willing to orchestrate this merger) I don't see why on earth they'd agree to this. Good deal for the Silna's though. Since the Nba will probably exist for 25 more years and they're already coughing up 20million a year to the Silnas a buyout might be the best option (25*20 million= 500 million.)
Hats off to the Silnas. Talk about foresight.
Edit, sorry NYBocker, didn't see your post. Or your going back in time just to make me look bad. Thanks man, thanks alot.
That St Louis team, in their prime, would give the Miami Heat trouble.
Cue Nalod, the UK ABA Ambassador at large.
I cannot believe he's not the one who posted this thread.
misterearl wrote:A great deal for te two guys who made the original investment. Kentucky Colonel owners were foolishly impatient and signed rights away for $5M. Think about that.Hold UP... Isn't that Maurice Lucas in the middle, wearing #20?
Joe Caldwell, third from the right, one of the most under appreciated frontcourt players of all time.
who could forget Marvin Barnes?
what a squad
That should be Moses Malone sitting in front of Mo Lucas --- pretty sure Moses was on the Spirit's when ABA ended and he along with Mo Lucas were auctioned off to the NBA teams or put in draft lottery.
yea, I heard about this a while ago.. smart dudes..
playa2 wrote:I wouldn't give them a buyout.
Playa2 confirmed its a good deal for the Silinas!
I love this story by the way and Nalod has posted it before (not recent developments). Bob Costas go this broadcasting start with that team and has great stories.
Its funny because Stern was the lawyer for the NBA and its been a thorn in his side for years and its been something he has wanted to settle before he retired. The perpetuity of the deal is what makes it amazing! Im not sure how the beneficiaries will handle the tax burden if its to be in a lump. Should be an interesting story.
There going back after "Stern" for international rights and internet makes it a more delicious story. The blunder by the NBA was by a committe of owners many who are long gone. They never could have considered the growth of cable, league pass, international interest and the internet. The league was dying! the finals were on tape delay for a few years in the late 70's!!!!!
but if you really think about what franchises are worth now and the fact they have recieved in total (If lump sump) $800 million then it would have been what the franchise was worth providing they never took out any profits along the way. Its like the "Phantom" franchise!
Playa2, sometimes you take the money and win!!!!! Sticking it to the NBA anymore makes no sense. The future value of half a billion is a big number and if you look at the history of the NBA trying for years to buy them out and then upping the ante really makes sense.
In fact, I'd have to look at the logic of that number but im sure its a win-win for both parties unless the NBA's growth declines. My feeling is the NBA will expand to europe in the next 10 years and its better to get this issue done with.
That is the ultimate long term appreciation. They enjoyed powerful dividends yearly and bagged the whale--AND they will still get paid yearly--not bad. Duck Dynasty who?
They finished their last season with Rod Thorn as their coach!
Notable players on thet last season roster:
Caldwell jones in his second year
Maurice Lucas
Moses malone
ML carr
Don Chaney
Marvin Barnes
MDA (yep, that MDA)
Gus Gerrard (Aved 10pts per game for Denver in NBA)
Ron Boone (avged 21 per game for Kansas City Kings first year in NBA!)
Pogo Joe was retired by the the last season. Year before they had "Fly" williams on the roster and a guy named "Goo" Kennedy!
woooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooow
