The Best Deal Ever?

Yes, this article was heavily influenced by Free Spirits, this week’s entry in ESPN’s 30 for 30 series. If you like basketball at all, I suggest you check the film out!

Do you remember polyester clothes from the 1960s and 1970s? Sure, those old double-knit suits and slacks seem ugly and obnoxious now, but they seemed like miracles back in the day. Polyester clothes promised to last forever, and required very little care from their owners. Housewives all across America envisioned a future without ironing, and to them it seemed awesome. And for that you can thank (or blame) two brothers: Ozzie and Daniel Silna.

The Silnas had a textile business, and were among the first to figure out how to make fabric from polyester. Although polyester brought the Silna brothers a modest fortune, the two had a dream, a dream of owning an NBA basketball team. In 1974, the brothers unsuccessfully tried to buy the Detroit Pistons. When the deal fell through, they went back to the drawing board.

Just as the NFL had to deal with an upstart rival in the AFL, so too did the NBA have an upstart of its own: the American Basketball Association, or the ABA. Just like the AFL, the ABA had players with big personalities, colorful uniforms, and increased offense via the three-point line. Also like the AFL, many ABA teams tried bizarre halftime shows – like alligator wrestling – to draw spectators.

ABA basketball
The ABA’s (in)famous basketball.

However, one thing AFL teams had that most ABA teams lacked was profits. The ABA and its teams constantly lost money, and this can be seen in the insanely complex history of some teams. The New Orleans Buccaneers, for example, played under that name from 1967 to 1970, when they changed their name to the Louisiana Buccaneers in an attempt to expand their fandom statewide. The trick didn’t work, so the team moved to Memphis, where they were known as the Memphis Pros (1970-1972), the Memphis Tams (1972-1974) and the Memphis Sounds (1974-1975). But the team still failed to make a profit, so they moved to Baltimore, where they were known as the Baltimore Hustlers… until they changed their name yet again to the Baltimore Claws before folding in late 1975. So in an 8 year span, the team either moved or changed its name 7 times.

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Nowadays, Charlotte is the dominant city of North Carolina. Charlotte’s 2012 population of 775,202 easily dwarfs that of Raleigh (423,179) or Greensboro (269,200). But in the early 1970s, Charlotte wasn’t nearly as large. According to the 1970 census, Charlotte’s population was only 241,420. While it’s still twice that of Raleigh (122,830) and significantly larger than Greensboro (144,076), it wasn’t nearly large enough to support an NBA basketball team.

Which is probably why the owners of the ABA’s Houston Mavericks decided to market themselves as a “regional team” when they moved to the state and became the Carolina Cougars in 1969. The team’s official home was the Greensboro Coliseum, the largest such venue in the state at the time. But the team often went on the road, playing “home” games at Dorton Arena and Reynolds Coliseum in Raleigh, the Winston-Salem Memorial Coliseum in Winston-Salem and the Charlotte Coliseum (now Bojangles’ Coliseum) in Charlotte.

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There’s a famous quote attributed to Cincinnati Bengals founder Paul Brown. Longtime head coach (and namesake of) the Cleveland Browns, Brown bought the rights to the last AFL team, which he placed in Cincinnati at the behest of his friend, Ohio governor James Rhodes. This was in 1967, well after merger talks had started between the AFL and the NFL. Brown only agreed to buy the team after he was guaranteed that his new team would be accepted into the combined AFL-NFL. Brown famously said that he “didn’t pay ten million dollars to be in the AFL”.

The Silna brothers had a similar plan with the Carolina Cougars. In 1974, the Silnas bought the team and moved them to the largest city that did not currently have an NBA team: St. Louis. They renamed the team the “Spirits of St. Louis”, after Charles Lindbergh’s plane. The brothers’ plan was to hold on to the team for a few years until it could be absorbed by the NBA, thus getting in to the league “through the back door”, so to speak.

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When the ABA merged with the NBA in 1976, only six ABA teams were financially solvent (a seventh, the Virginia Squires, folded only weeks before the merger). The NBA decided to take just four of the six ABA teams: the New York Nets, the Denver Nuggets, the Indiana Pacers and the San Antonio Spurs. This left two teams with nowhere to go.

One of those teams was the Kentucky Colonels. The team was owned by John Y. Brown, Jr., famous for being the principal investor in a group that bought Kentucky Fried Chicken from Harlan Sanders for $2 million in 1964 and turned it into a fast food giant. In 1979, Brown was elected governor of Kentucky and married former Miss America Phillis George, who was herself famous for being a co-host of CBS’s The NFL Today, which made her the highest profile woman in American sports media.

Even though the Colonels had the best overall record in the ABA, the NBA decided that the Colonels’ rabid fanbase just wasn’t big enough to support an NBA team. The NBA made Brown an offer: he could pay the NBA $3 million for the Colonels to join the NBA, or take $3 million from the NBA to fold the team and walk away. No dummy, Brown took the money and folded the team.

Although he publicly stated that he was “done” with basketball, Brown bought half of the Buffalo Braves only a few months later. He bought the rest of the team in 1977. A year later he traded teams with Boston Celtics owner Ira Levin. Levin moved the Braves to San Diego and renamed them the Clippers. During Levin’s ownership, the team made neither the playoffs nor a profit, so Levin sold the team to Donald Sterling in 1981. In 1984, Sterling moved the team from to Los Angeles, where they remain today. And, of course, we know what happened next. For his part, Brown frequently clashed with Celtics’ legendary head coach Red Auerbach, and since Auerbach was much more popular in Boston than he was, Brown gave up and sold the team to Harry Mangurian in 1979.

The other jilted team was, of course, the Spirits of St. Louis. The NBA used the same “low attendance” excuse to deny the Spirits a place in the NBA. After all, the NBA’s Milwaukee Hawks had moved to St. Louis in 1955 and drew such terrible attendance numbers – despite winning the 1958 NBA championship – that the team moved to Atlanta in 1968. And the Spirits, despite being a decent franchise, drew truly pitiful numbers themselves. They regularly played to crowds of fewer than 2,000 in the 18,000+ seat St. Louis Arena, and attendance for some games could be counted in the low hundreds.

But the Silna brothers weren’t interested in cash. They’d made plenty from their textile business, and had bought the Spirits with the sole intention of them one day joining the NBA. The Silnas passionately argued with NBA representatives for days about the future of the team. They begged to trade their team for part ownership of any NBA team, but league officials wouldn’t give. Everyone knew that the Silnas weren’t in it for the money, that they just wanted to be a part of the NBA. But no one would budge.

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Eventually the Silnas came up with a breathtaking plan, one that would not get them a team, but keep them involved with the NBA. The brothers demanded $2.5 million in cash up front, which is almost $10 million in current dollars. But they also demanded 1/7 of all future TV revenue from the four ABA teams accepted into the NBA… in perpetuity.

I don’t know how much you, the reader, know about the American legal system, but the words “in perpetuity” means forever. Until the end of time. Until the NBA ceases to exist, or until the sun explodes and takes the Earth with it, whichever comes first.

Amazingly, the NBA agreed to the deal. Of course, at the time the league’s TV revenues were a fraction of what they are today. In 1980, the Silnas received their first check from the deal in the amount of $521,749, which is a relatively modest $1.43 million when adjusted for inflation. But according to records made public by the NBA, their check for the 2010 season was a truly staggering $17,450,000!

The Silna brothers haven’t owned a basketball team in 38 years, and the one team they did own wasn’t even a part of the NBA. But every year the Silnas get their multi-million dollar check from the NBA. It’s estimated that the brothers have made in excess of $300 million in total off the deal, and that 2% of the league’s total TV revenues go directly to the Silnas. So the next time you hear news of the NBA signing something like a “$2 billion contract with NBC”, remember that the Silnas will get around 2% of that… for doing nothing.

The story would be remarkable if it ended there. But it doesn’t. The brothers are currently suing the NBA for even more money. It seems that their original contract with the NBA said only that the brothers would get “1/7 of the TV revenue from the former ABA teams in perpetuity”. The contract did not get in to specifics, such as “revenue from broadcast networks only”. And the television landscape has changed a lot since 1976. The NBA makes a ton of money selling international rights to their games, has various pay-per view and “season pass” packages with cable and satellite providers, offers streaming games online and has created its own network, NBA TV. And the Silnas say that they’re owed a chunk of that… and they’re probably right. In this September 2012 article from the New York Times, the judge in the case ordered the two sides to continue negotiating, but at least initially appeared to side with the Silnas.

There’s one last footnote to the story of the Spirits. When the team moved to St. Louis, it was necessary to hire a sportscaster to call the games. One of the people in the front office thought of a 22 year-old friend he knew from his days at Syracuse University. He called up the friend and asked for some tapes (the friend had called games for the Syracuse Blazers, a minor-league hockey team). But the friend only had a single tape, so the man played one line of his friend’s tape over and over for the Silnas. They agreed to hire the friend, who had to drop out of Syracuse to take the job. His name? Bob Costas.

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