NBA Reaches Settlement with Spirits of St. Louis "In Perpetuity" Deal

[Donoghus]

I'm sure many are familiar with this story.  There was a recent ESPN 30 on 30 on the subject.  The owners of the Spirits of St. Louis of the ABA struck a deal with the NBA for a share of their media rights in exchange for folding their franchise.   The payoff has been in the millions upon millions over the years and generally considered one of the most lopsided deals in sports business history.

From Yahoo Sports:

The NBA has finally broken free from what may have been the worst contract in the history of professional sports.

The NBA will pay two brothers $500 million to end a deal that required the league to give the former ABA owners an annual share of the league's television revenue according to Richard Sandomir of The New York Times.

As part of the NBA-ABA merger in 1976, Ozzie and Daniel Silna accepted a share of the NBA's "visual media" rights in exchange for folding their ABA franchise, the Spirits of St. Louis. The deal was to last "in perpetuity." With the growth of the NBA and its television revenue, the brothers were receiving 1.9% of the revenue in recent years, or about $17.7 million annually.

There were also concerns that the amount would go up as the brothers were suing for a share of "visual media" that did not exist in 1976, including online broadcasts, the NBA's own network, and international broadcasts.

According to the report, as part of the settlement, the brothers will still receive some television revenue as well as some revenue from the additional media mentioned in the lawsuit. However, there is a buyout clause in the new agreement which would allow the NBA to end the deal at any time.

[fairweatherfan]

I can't believe they signed on to it, that deal was ludicrous and would keep them and their descendants wealthy for as long as the NBA existed.

[D.o.s.]

I can't believe they signed on to it, that deal was ludicrous and would keep them and their descendants wealthy for as long as the NBA existed.

Well 500 million dollars and being able to end a costly lawsuit early probably helped.

[McHales Pits]

I am always in support of deals that David takes down Goliath.

[RebusRankin]

Wished they would have get taking the cash forever.

[Greenpoison]

http://hangtime.blogs.nba.com/2014/01/09/nba-settles-perpetuity-deal-with-former-owners-of-aba-spirits/

A brilliant move in the 70's just earned them an additional 500 million dollars. Oh boy. These guys certainly must have gotten in their Delorean and gone back in time to broker this deal. Who could have known how big of a role television would play in the NBA's future. Too bad they didn't anticipate new forms of media, but then again I guess they did sue for those revenues as well..

[Greenpoison]

Oops. Seems that topic is already being discussed in another thread. Mods move this I guess?

[Celtics4ever]

Holy Jackie Moon!

[fitzhickey]

Holy Jackie Moon!

lol TP

[LatterDayCelticsfan]

All hail the crafty son of a gun lawyer who figured they should use the terminology 'visual media' in that contract.