NBA, Spurs hoping to wiggle out of ABA settlement.

[wildbill2u]

Who knew that a defunct team of the old ABA days was still getting rich from the NBA/ABA settlement? This is a fascinating article on that deal and insight on how desperate the owners were at the time to cut a deal and merge.

http://blog.mysanantonio.com/spursnation/2012/09/06/nba-spurs-hoping-to-wriggle-out-of-aba-settlement/?utm_source=WhatCountsEmail&utm_medium=mySA%20-%20Spurs&utm_campaign=mySA%20-%20Spurs

[TDMVPDPOY]

fck them and their crew freeloading the since the merger, have they put any money into the team since then?

[ambchang]

A deal is a deal. It's like Alec Guiness's deal with George Lucas back in the day.
The owners took the risk or the deal backfiring, and is coming up like bandits.

[SpursNextRomanEmpire]

I remember reading about this in Simmons' Book of Basketball. Crazy good deal that family got, but to me a deal is deal. No one could've predicted how big the NBA would get, and now that it's huge I think it's a bitch move to run and try to overturn that agreement.

[TDMVPDPOY]

well the question still lies in the investment, do they put anything on the table for the team besides holt and the other other owners?

[SpursNextRomanEmpire]

well the question still lies in the investment, do they put anything on the table for the team besides holt and the other other owners?

What?

[baseline bum]

Under what grounds (other than death of the brothers) could that ever be terminated?

[Venti Quattro]

I remember reading about this in Simmons' Book of Basketball. Crazy good deal that family got, but to me a deal is deal. No one could've predicted how big the NBA would get, and now that it's huge I think it's a bitch move to run and try to overturn that agreement.

Found that section in the book, in the 1976 NBA-ABA merger of the how the hell did we get here chapter.


"...Meanwhile, the St. Louis owners struck the greatest mother lode in professional sports history, folding their shitty franchise for $2.2 million and one-seventh of the TV money from the four remaining ABA teams—money they were guaranteed in perpetuity. In other words, they received four-sevenths of a cut of the TV contract every year forever. Through 2009, that cut was worth about $150 million. Just free money falling out of the sky, year after year after year after year."

[Venti Quattro]

And there's a footnote that says this:


How many meetings do you think Stern had with high-powered lawyers from 1984 to 2009 where he tried to figure out ways to weasel out of the St. Louis pact, failed, then unleashed a parade of f-bombs and kicked everyone out of the conference room? The over/under has to be 39.5

:rollin

[SpursNextRomanEmpire]

:lol

[wildbill2u]

To me, it's hard to understand how the business men and lawyers for all the teams involved in the merger were willing to give up this deal on a 'forever' basis. In effect, they were betting against themselves and the success of the league in marketing its games for TV.

Meanwhile, the owners of the Spirits were essentially making a bet on the success of the league--and they had nothing to lose. Their franchise was never profitable and if the ABA failed all they would have is some fading photos, a few memories and a hamper full of dirty jockstraps. For them it was a "nothing to lose" proposition similar to an 'all-in' bet in poker.

[Shaolin-Style]

It's up to the NBA and the teams to actually find some weasel loop hole or settle to get outta it, til then live with it. Fine deal they made.

[Wild Cobra Kai]

This seems to come up every 4-5 years. It's been like 35 years, and the lawyers haven't found a loophole yet. Not likely to after this much time and scrutiny.

[ploto]

"...Meanwhile, the St. Louis owners struck the greatest mother lode in professional sports history, folding their shitty franchise for $2.2 million and one-seventh of the TV money from the four remaining ABA teams—money they were guaranteed in perpetuity. In other words, they received four-sevenths of a cut of the TV contract every year forever. Through 2009, that cut was worth about $150 million. Just free money falling out of the sky, year after year after year after year."

Someone needs to study ARITHMETIC.

[CGD]

Damn had no idea. Great deal. stern should probably advocate for a team to relocate to st. Louis which may require that family to participate in the franchise somehow. I can image a clause in that contract where the family reserved the right participate in a future stl team. At least that way the family would have overhead and operative expenses to worry about. Damn what a deal, thanks for sharing

[Wild Cobra Kai]

StL had an NBA team. They lost them to Atlanta. Seems like a kind of hit or miss town for bball or football. They lost the Hawks and the football Cardinals, gained the Rams, but may lose them too, when their dome lease is up.

[DMC]

Just change the name, bam done

[CGD]

StL had an NBA team. They lost them to Atlanta. Seems like a kind of hit or miss town for bball or football. They lost the Hawks and the football Cardinals, gained the Rams, but may lose them too, when their dome lease is up.

Baseball is king there.

[Obstructed_View]

Good for them. Best deal since Bill Gates licensed DOS to IBM.

[TDMVPDPOY]

what happens if the spurs re-allocate, wouldnt that rescind the contract?

[Wild Cobra Kai]

what happens if the spurs re-allocate, wouldnt that rescind the contract?

Not sure WTF you're talking about, but that could be said about all of your posts. If "re-allocating" (whatever that is) would do the trick, don't you think they would have done that by now?

[DMC]

I think he means "relocate". SA isn't going to relocate for 150m a year.

[Venti Quattro]

Someone needs to study ARITHMETIC.

Or maybe he just means four one-seventh cuts.

[tenbeersbold]

There was better article about this in the NY Times last week.
It looks like the judge in the case is gonna side w/ the Silna's,so they're gonna get even more $$$ for nothing.

These bros were involved in the whole Madoff ponzi scheme as well ,bloodsuckers for sure

Sucks for the Spurs,Pacers etc

"No Team, No Ticket Sales, but Plenty of Cash
Former A.B.A. Owners Ozzie and Daniel Silna Earn Millions From N.B.A.

By RICHARD SANDOMIR
Published: September 6, 2012
For years, it was an underappreciated wrinkle in the historic deal that merged the established National Basketball Association and the upstart American Basketball Association in 1976. The owners of the Spirits of St. Louis agreed to be paid a small fraction of the N.B.A.’s television money to comfort them for being cut out of joining the older league.

Ozzie Silna and his brother, Daniel, have collected $255 million from the N.B.A


Their piece amounted to a sliver of the modest amount that CBS was paying the N.B.A. in those days. But if the share was small then, one particular term of the arrangement was attractive: the owners, Ozzie and Daniel Silna, would be paid the money every year in perpetuity, or as long as the N.B.A. existed.

The Spirits became a distant memory, even for people in St. Louis. But the N.B.A. has continued to exist quite nicely, meaning the Silnas’ haul has been substantial: $255 million and counting. But as sweet as the deal has been, the Silnas want more, and they have gone to court to get it.

In Manhattan federal court on Thursday, lawyers for the Silna brothers and the league argued over whether the men are owed money beyond what they get from the N.B.A.’s national broadcast and cable television contracts. They want to tap into the money the league gets from international broadcasts, NBA TV, the league’s cable network, and other lucrative deals that could not have been imagined in the three network television universe of 1976.

If Federal District Judge Loretta A. Preska agrees, the Silna brothers — Ozzie, 79, and living in Malibu, Calif., and Daniel, 68, and living in Saddle River, N.J. — stand to receive millions more, all without having assembled a team or used an arena for more than three decades.

“This issue has been a nuisance as long as I’ve been associated with the league,” said Ed Desser, the former president of NBA Television and new media ventures who now runs his own media consulting firm. “It was never enough to be a serious distraction. It’s one of those accidents of history.”

Four of the A.B.A.’s seven teams merged with the N.B.A. in 1976, but the Virginia Squires were a financial wreck and the Kentucky Colonels were placated with a $3.3 million payment. But if the Spirits couldn’t join the N.B.A., the Silna brothers wanted to share in what the A.B.A. didn’t have: national TV revenue. They settled with one-seventh of the television money generated annually by each of the four surviving A.B.A. teams — the Nets, the San Antonio Spurs, the Indiana Pacers and the Denver Nuggets.

The arrangement began to get public attention as the size of the league’s network TV deals swelled. The four surviving teams have tried to extricate themselves from the arrangement, but have not found a way.

In the early 1980s, the teams discussed buying out the Silnas for $5 million to $6 million but did not pursue it. They offered substantially more in the late 1990s, but the Silnas rejected the offer.

Donnie Walsh, the president of the Indiana Pacers, said in 2003 that discussing the Silnas’ deal “puts a dagger in my heart,” reminding him of losing that one-seventh share of TV money each season. On Thursday, he said he preferred not to talk about it.

In 1980-81, the first year the Silnas were eligible to get their share of TV money, they received $521,749, according to court documents filed by the N.B.A. For the 2010-11 season, they received $17,450,000. The N.B.A.’s latest TV deal, with ESPN and TNT, is worth $7.4 billion over eight years. Soon, the Silnas’ total take will hit $300 million.

The A.B.A. was already seven years old when the Silnas — the owners of a New Jersey textiles business that specialized in making polyester — bought the Carolina Cougars and moved them to St. Louis in 1974. Formed to challenge the N.B.A., the A.B.A. wanted nothing more than to join the N.B.A.

The A.B.A. instigated a salary war. It discarded the traditional orange ball for a red-white-and-blue one. It implemented the 3-point line and juiced up its All-Star Game with a slam dunk contest. Stars like Julius Erving, Connie Hawkins and George Gervin played a freewheeling game that reflected a counterculture sensibility that contrasted with the N.B.A. squares.

Still, one team was owned by the prototypical square, Pat Boone. Yet another had Morton Downey Jr. as its general manager well before he became known as a coarse, chain-smoking talk show host.

Teams left cities as if attached to moving vans. Their names changed regularly. Into this unrest came the Silnas.

“They spent a lot of money to get a good team as quickly as they could,” said Rod Thorn, who was fired as the Spirits’ coach 47 games into the 1975-76 season. “Ozzie was the main guy. They were really involved, big fans and came to a lot of games.”

Michael Goldberg, who was the A.B.A.’s general counsel, recalled the Silnas as passionate owners who took a risk by buying into a shaky, undercapitalized league.

“They fell in love with the idea of owning a team,” he said. “Dan was a little less focused on the team. Ozzie reminded me of a schoolyard player who got picked eighth in the game but still loved it.”

The team’s announcer, fresh from Syracuse University, was Bob Costas. The Spirits were lucky to draw a few thousand fans to home games and once announced a crowd of 848, said Costas, who believed the number was closer to 400. The zenith of the Spirits’ history was defeating the defending champion Nets in the 1975 playoffs before losing to Kentucky in the next round.

“It was like winning a championship,” Costas said. “I remember Ozzie and Danny running through the locker room and into the showers, just like a couple of kids on a frolic.”

Nearly four decades later, the Silnas are recalled for a savvy deal that continues to enrich them. But not all of their business moves have been so lucrative. They were victims of Bernard L. Madoff’s massive fraud. Daniel Silna told Forbes last year that they lost all that they had invested with Madoff, but would not say how much. In lawsuits against the Silnas, the trustee for the victims of Madoff’s Ponzi scheme have said that the Silnas, relatives, family trusts and two corporate entities collected $24 million in fictitious profits.

After the hearing Thursday, a lawyer for the Silnas declined to comment or allow his clients to be interviewed.

Daniel Silna and Donald C. Schupak, the lawyer who negotiated the TV deal with the old A.B.A. teams, had listened to arguments over whether two 36-year-old documents contained language that would let the Silnas collect even more money from TV sources not yet created in 1976.

They showed little emotion as Preska, the judge, sparred with a lawyer for the N.B.A. She gave the league more time to make its case and urged both sides to settle. But her comments seemed to indicate that she was inclined to side with the Silnas, two brothers who might be the savviest owners the N.B.A. never had."

[Das Texan]

Baseball is king there.


So is hockey and soccer.


People there really dont give a fuck about basketball and even less about football.

[Kidd K]

"it was the best deal known to man", lol. jesus.

They need to buy out that contract. Going to be mad expensive though. . .and I don't think they will allow it to be bought out since it's basically a free ride for his family and descendants 'til the NBA flames out which probably won't be for hundreds and hundreds of years.

Literally, the contract they have is worth multiple billions at no risk or investment? lol. Why would they ever sell it? Spurs are gonna be paying forever. Too bad. . .just another reason why we'll never get those big free agents.

[TDMVPDPOY]

they wouldnt happen to be jews? just stern helping out another of his broes b4 real bros

[Drom John]

The Spirits were the 5th team when the NBA was only going to take an even number. The Colonels took a payoff which forced the Spirits into the odd slot. They compromised with the tv deal. Cash now vs. an annuity; a rational bargain for the Colonels, Spirits and the 4 ABA to NBA teams.

Another reason the Spurs, Nets, Nuggets, and Pacers can't compete. Hmm, 4 championships and 3 other finals later....

[baseline bum]

Man, the Nets move to Brooklyn is really going to make those brothers rich.

[Venti Quattro]

The only way that they could escape this contract is if they find dirt or acts of moral hazard from the Silna brothers. That alone could take years of legal work and more expenses. Fact of the matter is, they've never escaped this contract for 36 years, they're not going to be able to do it ever.

David Stern would probably need 10 sets of Harvey Specter and Mike Ross. :rollin

[ambchang]

Only way is to change the NBA name (ie, fold it, and restart), but that marketing exercise is worth way more than what they have to pay the brothers.

So Stern, suck it up, and live with the the mistakes of your predecessors of the past.

[buttsR4rebounding]

The present value of the TV contract has to be more than a new NBA franchise. They should've offered them the Hornets in exchange for the contract. If they are as big fans of BB as the article states they might be open to owning a franchise. To me that is the only way to resolve it without a 9 figure, maybe 10 figure settlement.

[Venti Quattro]

They should've offered them the Hornets in exchange for the contract.
Why would the Silnas do that when they have free money falling from the sky?

[Kidd K]

Why would the Silnas do that when they have free money falling from the sky?

No. They'd make more money than owning the Hornets, and there's zero risk in it.

If the contract passes to their next of kin too, then their entire family is set for the long forseeable future.

Maybe when they die they can try to squeeze out of it by saying the names on the contract are different than the current contract holder, so it's void.

[wildbill2u]

If the contract was with the corporation then it won't matter how long the brothers live or die because corporations are immortal.

So many teams manage to lose money on basketball operations of a franchise that it would not be a good business decision to swap this guaranteed annual profit simply for the ego satisfaction of owning a team.