Tuesday, August 01, 2006

The Best Deal Ever Made

In 1976, brothers Ozzie and Dan Silna, co-owners of the long-forgotten ABA team, the Spirits of St. Louis, negotiated a deal that cleared the way for the ABA to merge with the NBA. This deal has paid the Silnas about $168 million and it continues to pay off without ever having to field a team or spend money on stadium leases for the past thirty years.

Part of the Silnas' deal called for them to receive one-seventh of the annual TV revenue from each of the four ABA teams entering the NBA. The deal turned out to be so lucrative that several NBA teams have tried to break it, without success.

"We honor the deal," said Donnie Walsh, the Indiana Pacers' chief executive. "I can't say we haven't met and tried to settle it. But it's the greatest deal known to man. What more can you say?"

The key line in the Silnas' TV contract that makes NBA executives cringe reads: "The right to receive such revenues shall continue for as long as the NBA or its successors continues in its existence."

They expect to earn upward of $24 million annually due to the latest TV contract for NBA games.

Read the whole story at the LA Times.