The brothers who owned the Spirits of St. Louis in the defunct American Basketball Association have benefited from a legendary deal that's paid them an estimated $300 million in perpetual payments from the NBA's national television revenue. But Richard Sandomir of The New York Times reports that Ozzie and Daniel Silna will announce a conditional agreement that will end the deal dating back to the 1976 NBA-ABA merger and pay the brothers a $500 million upfront payment.
The agreement will also settle a lawsuit filed in federal court by the Silnas seeking additional compensation from sources of television revenue -- NBA TV, foreign broadcasting of games and League Pass, the service that lets fans watch out-of-market games -- that were developed after 1976, Sandomir reports.
Back in 1976, as the NBA was on the verge of absorbing four ABA teams -- the Nets, Nuggets, Pacers and Spurs -- the Silnas and the Spirit were in the verge of being left out in the cold. Under the threat of legal action, the brothers negotiated a deal paying them one-seventh of the national television revenue that each of the four new NBA teams was to receive, as long as the league continued to exist. The explosion of televised sports was years away, and the deal was a solution to a merger roadblock.
As NBA television rights deals skyrocketed, the league has tried to buy the Silnas out. Daniel, 69, and Ozzie, 80, now appear ready to settle.
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. The Silnas, of course, did not have to settle. They could have continued to make money from the N.B.A., without ever having to invest in players or build an arena. Clearly, their old agreement would have to be honored as long as the N.B.A. continued to exist.