The greatest lopsided contract of all time

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http://sports.yahoo.com/blogs/nba-ball-dont-lie/nba-attempting-end-losing-role-greatest-sports-business-164701257--nba.html

 

The NBA is attempting to end its (losing) role in ‘the greatest sports business deal of all time’

The NBA appears to be sick and tired of being on the wrong end of what many call “the greatest sports business deal of all time,” and they’re trying to rectify that. The league is reportedly in negotiations to dissolve a binding deal put together in 1976 by Ozzie and Daniel Silna, former owners of the ABA’s Spirits of St. Louis. Spurned by the NBA after merger talks helped the NBA absorb four former ABA teams, the Silna brothers decided to waive a chance at a massive buyout from the NBA, and struck a deal to receive one-seventh of each of the yearly television revenue of those four former ABA teams in perpetuity.

Those four teams? The undefeated Indiana Pacers, the legendary San Antonio Spurs dynasty, the well-heeled and highly regarded Brooklyn Nets, and the, um, “based in Colorado” Denver Nuggets. All four teams have to watch as a chunk of their TV payoff is lopped off every year, merely as Silva-conspired revenge for not letting the brothers into the NBA nearly four decades ago.

According to ESPN’s Chris Broussard, though, the league has had enough:

 

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.

Because the NBA wasn’t held in high televised ideal back in 1976, not even the Silnas could have estimated the windfall that they’ve taken in over the years since. It took a full five years after striking that deal for the league to even have its championship games televised in primetime, and not on tape delay after hours or stuck before the Kemper Open in mid-afternoon on a Sunday. And with the growth of the league internationally, with all those broadband accounts set to spark up worldwide, this source of revenue isn’t going to slow down any time soon.

The league has long since copped to the embarrassment, because outgoing commissioner David Stern and deputy/successor Adam Silver weren’t part of the final decision process in 1976; though Stern (as league counsel) did play a role in easing NBA owner fears about the new ABA additions. This sort of recent negotiation, 37 years on, might be less about saving face, and more about helping the 30 owners that Stern has never minded going all out for.

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The Pacers and Spurs may have had their fair share of success over the last 20-plus years, but the fact remains that both teams play in two of the smaller markets in the NBA, while working with player payrolls that rub up (especially closely, in Indiana’s case) against the league’s luxury tax. And while the Nets and Nuggets are owned by billionaires, they certainly wouldn’t mind their 14 percent back.

While the Silnas (who routinely turn down interview requests, most recently to the producers behind a fantastic recent ESPN documentary on the Spirits) probably like the idea of sticking it to their former tormenters in perpetuity, and securing years worth of revenue for their families, it also might be time to end the deal within their lifetime. One last massive balloon payment to rub in the NBA’s face.

Or, the Silnas could walk away from the table. They’re not costing themselves anything if they do.