North American basketball league the NBA is close to agreeing a conditional deal that will end the payment of a share of national television revenues to the owners of the Spirits of St. Louis franchise in the defunct American Basketball Association, according to the New York Times newspaper.
The revenue-sharing agreement was formed in the wake of the 1976 merger of the two leagues and has been called the greatest deal in sports history, if not in American business as a whole. The merger saw the Spirits excluded from the merger, which granted entry to the NBA for the Denver Nuggets, Indiana Pacers, San Antonio Spurs and the franchise that was then called the New York Nets. The Spirits’ owners, Ozzie and Daniel Silna, reached an agreement to be paid one-seventh of the national television revenue that the four franchises were to receive as long as the NBA existed – an amount that the Times said has so far risen to around $300m (€220.6m).
The NBA has previously tried to buy the Silnas out of the agreement and negotiations are said to have progressed over the past six to nine months. The Times said that the Silnas, the league and the four former ABA teams will today (Tuesday) announce a conditional deal that will make major revisions to the initial agreement.
Under the terms of the deal, the Silnas will reportedly receive a $500m upfront payment, financed through a private placement of notes by JPMorgan Chase and Merrill Lynch. This will end the huge 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. These include league-owned cable-television channel NBA TV, foreign broadcasts of games and League Pass, the service that lets fans watch out-of-market games.
However, the Times said that the Silnas will continue to receive some television revenue through a new partnership that is set to be formed with the Nets – now known as the Brooklyn Nets – the Pacers, the Nuggets and the Spurs. The newspaper added that the Silnas can be bought out of their interest in the partnership at a future date.