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Report: NBA finally reaches buyout deal with former ABA owners still getting TV revenues

Jan 7, 2014, 1:59 PM EDT

ABA basketball

It’s one of the great legends of the ABA:

When the NBA and ABA merged in 1976 four teams came in the league — the Nets, Pacers, Spurs and Nuggets — while the Spirits of St. Louis were left out (sort of like the Flint Michigan Tropics). The owners of the Spirit, Ozzie and Daniel Silna, wanted some compensation for missing out and they worked out a deal with the league to get one-seventh of the national television revenue that each of the four teams coming in was to get — in perpetuity. Forever.

Back in 1976 the sum was laughably small, but in the years since the NBA’s broadcast rights exploded and the Silnas got a piece of it every year, an estimated $300 million in the nearly 40 years since the merger. As you might imagine, the NBA has tried to get out from that agreement but to no avail, in fact a judge recently ruled that the Silnas should get a slice of international and league pass broadband rights, too.

However, finally the two sides have worked out a buyout, reports the New York Times.

On Tuesday, the Silnas, the league and the four former A.B.A. teams will announce a conditional deal that will end the Silnas’ golden annuity. Almost.

The Silnas are to receive a $500 million upfront payment, financed through a private placement of notes by JPMorgan Chase and Merrill Lynch, according to three people with direct knowledge of the agreement. The deal would end the enormous perpetual payments and settle a lawsuit filed in federal court by the Silnas that demanded additional compensation from sources of television revenue that did not exist in 1976, including NBA TV, foreign broadcasting of games and League Pass, the service that lets fans watch out-of-market games.

Still, the league is not getting rid of the Silnas altogether. They will continue to get some television revenue, some of it from the disputed sources named in their lawsuit, through a new partnership that is to be formed with the Nets, the Pacers, the Nuggets and the Spurs, according to the people with knowledge of the agreement. But at some point, the Silnas can be bought out of their interest in the partnership.

Why the Silnas chose to settle is the interesting question — while they had to fight the league for years and pay a lot of attorneys a lot of money, which deal was like a huge, never-ending annuity. The Times answered that as well.

But there is a reluctance, more by Daniel, 69, than Ozzie, 80, to keep fighting the league, said one of the people who discussed the agreement.

What does this mean to you the fan? Nada. It really means long term more money in the owners’ pockets.

And my guess is the Silna families will be able to live pretty darn comfortably on that sum for a few years.

  1. RavenzGunnerz - Jan 7, 2014 at 2:37 PM

    “Hey guys… maybe we should just agree to 50yrs contract or $500mil in total payouts or something? Forever is long long time…”

    — wise person back then.

    • spursareold - Jan 7, 2014 at 2:42 PM

      TV was less than nothing to the NBA in 1974. As late as the late 1970s, the NBA Finals were shown tape delayed. I’m guessing that the owners of the Spirits got maybe high 5 figures or low 6 figures until Bird and Magic blew up, and then it was off to the races.

      • zerole00 - Jan 7, 2014 at 5:25 PM

        So? Even 1 dollar over “forever” is a lot of money.

      • zerole00 - Jan 7, 2014 at 5:25 PM

        for “forever”*

  2. spursareold - Jan 7, 2014 at 2:45 PM

    How emmbarrased do you have to be to be the owners of the Kings or the Clippers? These four former ABA teams have basically been playing with one hand tied behind their backs, revenue wise? The Spurs have won 4 titles, the Nets have been to the NBA Finals twice, and both the Nuggets and Pacers have been conference finalists

    • RavenzGunnerz - Jan 7, 2014 at 2:56 PM

      ABA has made NBA better in many ways though. Including the 3pt line, dunking, not to mention adding great franchises to the league: Pacers, Spurs, Nuggets and Nets.

      So, I am glad the original owners got paid.

      • zerole00 - Jan 7, 2014 at 5:26 PM

        The Nets are a great franchise?

      • ranfan12 - Jan 8, 2014 at 7:08 PM

        Generally yes. The peak years were during the Jason Kidd/Vinsanity times though lol.

    • dondada10 - Jan 7, 2014 at 8:11 PM

      Give the Kings a break. They played the Lakers in what was an 8 on 5 in 2001.

  3. johngalt1783 - Jan 7, 2014 at 3:07 PM

    Some of the money saved by the NBA on this could be used to improve the product.

  4. 1972wasalongtimeago - Jan 7, 2014 at 3:30 PM

    This might be David Stern’s greatest triumph. He finally got those guys to take a deal. You know he wanted this one done before he stepped down.

    If those guys really wanted to make Stern mad, should have waited until Silver was the commish, like Iran releasing hostages after Carter was out and Reagan was in.

  5. georgiared - Jan 8, 2014 at 8:54 AM

    Leeeeeeeet’s get TROPICAL!!!!!!

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