By Ray Downs
By Lindsay Toler
By Danny Wicentowski
By Lindsay Toler
By RFT Staff
By Lindsay Toler
By Allison Babka
By Lindsay Toler
The National Basketball Association won't discuss it and neither will the San Antonio Spurs, Indiana Pacers, Denver Nuggets or the New Jersey Nets. "We don't have anything to say," responds a testy Gary Sussman, vice president of public relations for the Nets. "It was so many years ago. We have new management now."
What Sussman is referring to is one of the great business deals of all times, and it traces its roots to St. Louis and the now-defunct American Basketball Association. For two inglorious years in the mid-1970s, the Spirits of St. Louis struggled to compile a 67-101 franchise record in the ABA, known then as basketball's "outlaw" league for its red-white-and-blue basketballs, three-point shots and outrageous players. Today, the Spirits are perhaps best remembered for launching the career of broadcaster Bob Costas, who called the team's games before sparse crowds at the old St. Louis Arena.
The ABA disbanded at the end of the 1976 season when four of its seven teams were invited to join the financially stronger and more popular NBA. The St. Louis Spirits, Virginia Squires and the Kentucky Colonels didn't make the cut. But before the league's owners could dissolve the ABA, they had to come to financial terms with those teams not headed to the NBA.
The owners of the Virginia and Kentucky franchises agreed to lump-sum payments; Colonels' owner John Y. Brown reportedly accepted $3.3 million to disband his franchise. The owners of the Spirits, Ozzie and Daniel Silna, wouldn't go away as easily. With the help of their Manhattan attorney, Donald Schupak, the brothers deftly asked for a smaller payment of $2.2 million on the condition that they also receive 1/7th of all future television revenue for the four ABA teams (Spurs, Pacers, Nuggets and Nets) entering the league.
At the time, the NBA's paltry TV audience earned the New York-based Silna brothers just $300,000 a year. But as the league's popularity blossomed in the 1980s, so did the television income. To date, the Silnas and Schupak have reaped an estimated $180 million from the deal. That figure is now expected to soar to $300 million thanks to a new eight-year, $7.4 billion contract the NBA inked with TNT and ABC/Disney last month.
"I'd be surprised if there is a better deal out there," notes Costas, who still enjoys recounting his days with the Spirits. "All they do is walk to the mailbox and pick up the check in perpetuity. It was a genius deal, especially when you think that like some of the other clubs they could have accepted a lump-sum payment to go away."
Under terms of the contract signed June 27, the NBA's 30 franchises will earn television revenue of approximately $31 million per year between 2008 and 2016. Of that sum, the former ABA teams must pass off 1/7th of the money ($4.3 million per team, per year) to the Silnas. The brothers split the earnings 45-45, with their attorney Schupak claiming the remaining 10 percent. Based on that math, the Silnas will earn $17 million per year and $136 million over the length of the eight-year contract.
Pacers' chief executive Donnie Walsh declined to discuss terms of the new television contract with Riverfront Times. But last year Walsh succinctly told the Los Angeles Times: "We honor the deal. 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 Silna brothers and attorney Schupak are also keeping mum. None returned calls to the RFT. The 74-year-old Ozzie Silna now resides in Malibu, California, where he stays active as an environmental activist and Democratic campaign contributor. In recent years Ozzie has granted a few rare requests to discuss the deal.
In May 2006 he told the Associated Press that he and Daniel believed the NBA's television contract was undervalued in the 1970s but could never fathom its current value. "We saw some room for growth there," said Silna. "We had no idea it would grow this much."
Today the brothers justify their massive payouts by arguing that, had the Spirits been allowed to join the NBA, the franchise would now likely be worth hundreds of millions of dollars. "I would have loved to have an NBA team," Ozzie Silna told the Los Angeles Times last July. "But if I look at it retrospectively over what I could have gotten, versus what I've received now, then I'm a happy camper."
Ozzie and Daniel Silna first came into wealth as textile manufacturers, experimenting in polyester, the new wonder fabric of the early 1970s. A few years later in 1974 they purchased the Carolina Cougars for about $1 million and moved the team to St. Louis as the Spirits.
Costas says the brothers quickly went to work assembling an exciting team of young talent, some of whom would later star in the NBA: Moses Malone, Maurice Lucas and Marvin Barnes. The team had a 32-52 record its first season but miraculously pulled off a first-round playoff victory over Julius "Dr. J" Erving and the defending champion Nets.
"It was not inconceivable that they could have won the championship," recalls Costas. "They had the momentum, but in the next round of playoffs Freddie Lewis twisted his ankle and their luck petered out."