One of the worst deals in professional basketball history is about to be corrected. And, no, I am not talking about Andrew Bynum or Gilbert Arenas here (both now being paid not to play for their respective teams).
The NBA announced Tuesday that it had reached a settlement with the Spirits of St. Louis' ownership group to settle their court dispute and trade future television revenues for an immediate lump sum (or more immediate lump sum) of $500 million.
So why is the NBA still paying two former ABA owners for a team that ceased its existence when the ABA merged with the NBA?
That is a story worthy of an ESPN 30 for 30 documentary.
Brothers Daniel and Ozzie Silna were astute businessmen and held out while the rest of the ABA folded. They came up with a brilliant buyout plan. Instead of taking a payment from the league to buy them out of their stakes they agreed to receive one-seventh of all television revenues from the four teams moving from the ABA to the NBA — the Pacers, Spurs, Nets and Nuggets.
That amount was miniscule in the 1970s. The NBA was on tape delay with very little prospect or star power that connected with the disposable income-spending nation.
That of course changed very quickly and suddenly. Television revenue is probably the number one source of revenue for the league now and the Silnas have raked in more than $300 million because of this deal. It has been a major loss for the NBA.
And the Silnas wanted more. They claimed that their agreement included new revenue streams such as Internet broadcasting that did not exist at the time of the sale. That was the basis for the lawsuit.
The Silnas though capitulated and did not want to keep fighting. They agreed to give up some of their interests in the TV streams for a $500 million lump sum.
That does not sound so bad. But it appears the Spirits of St. Louis will not live on much longer.
