In 1976 when the NBA absorbed four ABA teams (New York Nets, San Antonio Spurs, Indiana Pacers and Denver Nuggets) into the league, two other ABA teams, the Spirits of St.Louis and the Kentucky Colonels were denied entry into the NBA. Kentucky Colonels’ owner John Y Brown received $3 million from the four remaining ABA teams to dissolve his team. However, Spirits of St. Louis owners Ozzie and Daniel Silna took only $2.2 million from the ABA, but negotiated to get a share of the NBA’s “visual media” rights “in perpetuity.”
Not long after the 1976 agreement with the Silnas NBA television revenue skyrocketed when Larry Bird and Magic Johnson joined the NBA . By the mid-1980s Michael Jordan’s presence added to the television revenue bonanza. The Silnas have since benefited from the 1976 deal to a tune of close to $300 million. With new forms of media that could not be imagined in 1976 the Silnas could continue to receive millions from the NBA for years to come.
After almost 38 years the NBA has decided to pay the Silnas $500 million to get out of the 1976 deal. The agreement will end the yearly payouts from the NBA and settle a lawsuit the Silnas filed against the NBA seeking additional sources of revenue from new media rights.
January 8, 2014