Lately, it seems there has been a lot of talk about the NBA and its media deals.
That train is not about to stop.
With the NBA losing a bit of money to make fans happy by allowing local games to be streamed over the internet, they may be looking get some of that revenue back. To do so, they are looking back to the NBA and ABA merger.
During what many call the “the greatest sports business deal of all time”, the NBA made a deal to absorb the ABA. The four teams that merged from the ABA are the San Antonio Spurs, Brooklyn Nets, Denver Nuggets, and Indiana Pacers.
This is where the deal gets interesting: The Silna brothers – former owners of the St Louis Spirits – were not to be included in the merger and decided against a buyout from the NBA, but struck a different deal instead.
NBA-ABA merger Is Still An “Ongoing Deal”
Because the Silna bros decided against the buyout, they in fact landed themselves what has appeared to be an even better deal. The deal consists of the brothers acquiring one-seventh of each of the yearly television revenues of those four former ABA teams.
There is a kicker too: the deal lasts a lifetime.
Back in 1976 ( the year of the merger), the NBA had very limited run time on TV, not to mention the fact that the Championship wasn’t televised until five years after the Silna’s deal. In the long run though, it has worked out in favor of the two brothers.
With no end in sight, the NBA has grown tired of giving away television revenue. Now they are looking to settle the deal once and for all. According to ESPN’s Chris Broussard:
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.
Since the deal was reached in 1976, the league has paid the Silnas $300 million in TV royalties. 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.
As you can see, the deal played in strong favor of the Silnas brothers. A potential settlement would likely come in the form of a massive buyout from the NBA. That isn’t to say the brothers will accept such an offer though. In all reality, they can sit back and watch the ever-growing league prosper, all while collecting television revenue checks.
Photo credit – forbes.com
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