Ozzie Silna Rumors
The NBA tried, on a few occasions, to work out a deal with the Silnas. There were a few times when the league believed it was close to resolving the issue. At one point, the Silnas were part of a group trying to buy the then-New Jersey Nets, and would have had to obviously give up the Spirits deal as a condition of ownership. In 2007, there were “very serious negotiations,” according to a source, between the league and the brothers, and a proposed deal was basically done and ready. And then, the worldwide recession kicked in full, and the deal’s proposed financing fell apart.
On Tuesday, the Silnas, the league and the four former A.B.A. teams will announce a conditional deal that will end the Silnas’ golden annuity. Almost. The Silnas are to receive a $500 million upfront payment, financed through a private placement of notes by JPMorgan Chase and Merrill Lynch, according to three people with direct knowledge of the agreement. The deal would end the enormous perpetual payments and settle a lawsuit filed in federal court by the Silnas that demanded additional compensation from sources of television revenue that did not exist in 1976, including NBA TV, foreign broadcasting of games and League Pass, the service that lets fans watch out-of-market games.
The N.B.A. has long hoped to be released from its financial obligation to Ozzie and Daniel Silna, brothers who owned the Spirits of St. Louis in the defunct American Basketball Association. But it has never been easy. The Spirits were excluded from the 1976 merger of the two leagues. So the Silnas watched unhappily as the New York (now Brooklyn) Nets, the Denver Nuggets, the Indiana Pacers and the San Antonio Spurs were absorbed into the N.B.A. But the Silnas negotiated an astonishing benefit that was critical to the merger: an agreement to be paid one-seventh of the national television revenue that each of the four teams was to receive, as long as the league continued to exist. That amounted to being paid in perpetuity, and so far, the deal has provided the Silnas with about $300 million.
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.
But there is a reluctance, more by Daniel, 69, than Ozzie, 80, to keep fighting the league, said one of the people who discussed the agreement. Although wealthy people often plan their estates, much of the Silnas’ riches from the N.B.A. is already in family trusts. Bob Costas, the NBC sportscaster who called Spirits games, said in a telephone interview, “My guess is that for the N.B.A., the upside is that in the foreseeable future, there will come a time when they will not have to look at this and blanch and it will be in the past.”
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. The Silna brothers are the former owners of an old ABA franchise known as the Spirits of St. Louis. When the ABA merged with the NBA in 1976, the Silnas agreed to dissolve their team in exchange for a small percentage of the NBA’s future broadcast revenue.
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.