The amazingly short-sighted deal that the NBA gave to a pair of ABA owners in the late 1970s has cost the league $US300 million and now the NBA is negotiating to finally end the horrific contract
according to Chris Broussard of ESPN.com.
When the NBA and ABA merged in 1976, four of the remaining six ABA teams were absorbed by the NBA. The NBA offered the other two teams a $US3 million settlement, an amount that was accepted by the owner of the Kentucky Colonels. The owners of the Spirits of St. Louis, brothers Ozzie and Daniel Silna, turned down the offer.
Instead, the Silna brothers negotiated a deal that would pay them one-seventh of the “visual media” rights for each of the other four ABA teams “in perpetuity.”
In other words, for the past 37 years, the brothers and their lawyer (who receives 10% of the proceeds) have received the equivalent of four-sevenths of a share of the NBA’s television contract each year.
The NBA currently receives a combined $930 million in television broadcast revenue each year. With 30 teams in the NBA now, the Silna brothers receive approximately 1.9% of the television revenue, or about $US17.7 million each year.
A recent judge’s ruling also granted the Silna brothers a share of all Internet revenue.
According to Broussard, the NBA has tried unsuccessfully to negotiate out of the deal in the past. It is unclear if they will be successful this time, but it is easy to see why they would be eager to settle.
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