12:58pm PT by Eriq Gardner
NBA Settles Historic Dispute Over TV Money
We're not Bob Costas, but we'll consider this the greatest play ever.
In 1976, the American Basketball Association was on the verge of collapse. The league attempted to merge with the National Basketball Association, but there was only room for four teams. The NBA offered the other franchises about $3 million each to fold. Daniel and Ozzie Silna, owners of the Spirits of St. Louis, held out. Eventually, they received what the merging teams got: a share of the NBA's "visual media" rights.
Since then, the Spirits of St. Louis have been known for two things: first, Costas, who began his great broadcasting career with the team; and second, the substantial amount of TV money received by two former ABA owners.
The NBA has long regretted making that deal. And the Silnas brothers weren't totally satisfied either. They believed themselves entitled to a share of the NBA's money from international broadcasts, the league's cable network, digital streaming and more. A lawsuit was filed in New York court. The league argued that newer sources of revenue could never have been imagined in 1976.
A conditional settlement has now reportedly been reached. The Silnases will get $500 million up front, according to The New York Times. Plus, they'll continue to get some television revenue with the possibility they can be bought out later. This is on top of the estimated $300 million the Silnas brothers have already received throughout the years.
In short, they're receiving nearly a billion dollars for a basketball franchise that hasn't existed for more than 35 years. The Silnases haven't been completely lucky. They once invested their money with someone named Bernie Madoff. But overall, they've proven the value of saying "no" to a first offer.
Costas told the NYT, "My guess is that for the NBA, 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."