Some mistakes are forgotten with time, and some seem to get worse with each passing year. The NBA's long-standing financial blunder is most definitely one of the latter.
UPDATE: Tuesday, Jan. 7 at 11:35 a.m. ET
The New York Times' Richard Sandomir reports the NBA is on the brink of severing the deal that has garnered the Silna brothers about $300 million over the years, by paying them $500 million.
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.
What's more remarkable is this would not end the previous agreement completely.
According to Sandomir, the Silnas will continue to get some part of television revenue, "through a new partnership that is to be formed with the Nets, the Pacers, the Nuggets and the Spurs..." It is noted, however, that this partnership can ultimately end in a buyout.
End of Update---
Back in 1976, Ozzie and Daniel Silna were given the unfortunate news that they needed to fold their ABA team, the Spirits of St. Louis, for a sum of $3 million.
We say unfortunate because at the time, it seemed to be far more lucrative to be among the four ABA franchises welcomed into the NBA fold.
As it turns out, it is far easier to just sit back and watch the millions roll in. Business Insider's Cork Gaines reports the brothers rake in a reported $17.7 million (Broussard puts that sum at $19 million) per year at the moment and have accumulated a sum of $300 million because of a deal they brokered with the NBA back in 1976.
Broussard reports the NBA and the Silna brothers are locked in negotiations at the moment to bring a close to the "in perpetuity" deal.
Gaines explains that four teams were granted entry into the NBA at the time, but the Kentucky Colonels and St. Louis franchise were given the option of a $3 million settlement to fold their teams and walk away.
The Silnas instead negotiated a deal that would make George Lucas proud. The brothers and their lawyer Donald Schupak (who receives 10 percent of the deal) benefit from what many believe is "the greatest sports business deal of all time."
For those wanting to dive further into the specifics, the entire history of the deal is well-documented by Forbes' Monte Burke in a 2011 article.
Broussard writes, "They receive one-seventh of the television revenues of the four ABA teams that were absorbed: the Spurs, Nuggets, Nets and Pacers. The NBA currently has $7.4 billion in TV contracts with ABC/ESPN and TNT."
Burke puts things into perspective from a 2011 standpoint. The Nets, a former ABA team, made a little over $26 million in TV revenue that year. The Knicks, per the report, made about $31 million. That year, the brothers with the foresight of Biff from Back to the Future II made $19 million.
Burke also states the brothers made sure their deal is for one-seventh of a share of the four former ABA teams in a 28-team league. There is no threat their share can be watered down, even if the league expands to ridiculous ends.
If all of that weren't enough to crown the brothers as grand champion winners of all negotiations spanning the globe and time, a judge also issued them rights to Internet revenue.
Of course, this is all at the heart of why the NBA is hoping to strike a deal to get out of a mistake that continues to batter them over the head year after year.
We all have that one incident that makes us cringe the second we recall it with vivid detail. Still, we hope none of us are paying millions because of it.
It sort of puts the time you tripped in front of classmates in grade school well into perspective.
Now comes the obvious notion that the brothers would be out of their minds to negotiate out of what is a mighty sweet deal.
Back in 2011, Dan Silna was listed as 66 years old, and his brother Ozzie was reported to be 78, so neither of them are getting any younger.
What's more, they were both clients of Ponzi scheme purveyor Bernie Madoff. In 2009, then-CNBC reporter Darren Rovell reported that both brothers were on a list of Madoff clients.
Burke reports they indeed lost all the money they had invested with Madoff, but that luckily wasn't the entirety of their fortune.
Still, you could see at least some reasons why the brothers would bring one of the more remarkable deals ever secured to an end.
The NBA should be careful for what they ask for, because these two have a way of getting the better end of the deal.
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