The Disaster Deal That Cost NBA Billion $$$

The Disaster Deal That Cost NBA Billion $$$

NBA professional league, today is one of the
richest among all sports leagues. A big chunk of revenue of this multibillion-dollar
industry comes from selling tv and other broadcasting rights. Under the terms of new rules implemented last
year, ESPN and Turner pay $2.6 billion every year for TV rights alone. For more than 3 decades, NBA shared this revenue
with its 30 teams for playing in NBA and with one more team, namely Spirits of St. Louis,
for NOT playing in NBA and here is the reason why – When the American Basketball Association (ABA),
the only big competition to NBA of its time, started going into losses, it decided to merge
into NBA. A deal was struck and NBA agreed to take 4
out of its 6 surviving teams and the remaining two teams were compensated for shutting down
their franchise. Owner of the Kentucky Colonels quickly accepted
a $3.3-million buyout but the owners of St. Louis, brothers Ozzie and Daniel Silna, proposed
a deal before NBA. They would get $3 million as a one-time money,
plus 1/7 share of the TV revenue from each of the four teams entering the NBA. The deal got accepted as NBA was new to television
and revenue was minuscule. As the NBA’s popularity rose, so did the league’s
TV contract, IT revolution redefined the entertainment industry and Silna’s cut reached a value no
one had anticipated. As of 2008, the Silna Brothers had already
made $186 million dollars, by 2015 this number rose to $255 million dollars. On an average St Louis was making more money
per season than most of the NBA teams – and all these without playing a single match in
almost 4 decades. NBA and these four franchise did everything
they could to somehow sneak out of this soul-crushing deal by proving it invalid in court but a
deal is a deal. Moreover, the deal had a no-expiration date. It was valid for as long as the NBA or its
successors continues in its existence. It was only in 2014 when the Silnas got tired
of fighting the lawyers of NBA to keep their deal alive, they finally decided to greatly
reduce the perpetual payments and take a lump sum of half a billion. Whether the deal was a result of a vision
ahead of its time or simply pure luck, this deal is often dubbed as the greatest deal of all times.

4 thoughts on “The Disaster Deal That Cost NBA Billion $$$

  1. Wow, can't believe this is the first I'm learning of this (just like I'm sure 99.9% of hardcore NBA fans have never heard either). Great work, Sidenote — keep it up!

  2. füa heut how I ma foa'gnumma jedes Video mit a wengal am ästeraichischa'n Dialekt zu spammen owa de NBA is ma echt wuascht

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