The NBA is currently in negotiations with Ozzie and Daniel Silna, the former ABA team owners, to end a contract that costs the Brooklyn Nets, among other teams, at least $5 million per year, according to Chris Broussard of ESPN.
As part of their agreement to join the NBA, the Nets, along with the Spurs, Nuggets and Pacers, agreed to pay the Silnas a percentage of future television revenues if they agreed to dissolve their team — the Spirits of St. Louis. At the time those five teams were members of the American Basketball Association and the NBA only wanted four teams so to make things fair they reached a buyout with St. Louis to make things fair.
The deal ended up being that those four teams would pay 1/7th of their television revenue. At the time it didn’t seem like much, but the deal goes on forever and TV revenues reached $7.4 billion last season so now each of those teams are chipping in $5 million each…and that sum only increases every single year. Last year the Silnas received $19 million and more than $300 million over the years.
Not only is it an inconvenience, but it gives the rest of the NBA a competitive advantage over the former ABA teams. So the NBA is once again trying to figure out a way to help them out of it. The problem is that there is no real incentive for the Silnas to settle so it’s probably going to take a huge cash payment to get them to agree to break up the contract.
The NBA has tried, and failed, to get out of this agreement in the past, but they are increasing their efforts as a judge recently ruled that online revenue should be included in this.