Ever feel like you’re the one who got left out? Imagine it's 1976. You own a pro basketball team, but the big league doesn't want you. That was the reality for Ozzie and Daniel Silna. They owned the Spirits of St. Louis in the old American Basketball Association (ABA). When the ABA merged with the NBA, the Silnas were told their team wasn't invited. They were basically being asked to just... go away.
Most people would’ve taken a small check and walked. But the Silna brothers? They weren't most people. They turned a "no" into roughly $800 million.
Honestly, it's the kind of business move that makes modern tech founders look like amateurs. They didn't have to pay players. They didn't have to build stadiums. They didn't even have to show up to games. For nearly 40 years, the NBA just kept sending them checks. It's often called the greatest deal in sports history, and frankly, it probably is.
How the Spirits of St. Louis Changed Everything
The story starts with polyester. No, seriously. The Silnas made their first fortune in textiles, pioneering the manufacture of polyester in New Jersey. They were basketball junkies, though. After they couldn't buy the Detroit Pistons, they dropped $1 million on an ABA team called the Carolina Cougars and moved them to Missouri.
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They rebranded them as the Spirits of St. Louis.
That team was a trip. They had a young Bob Costas doing play-by-play. They had Marvin "Bad News" Barnes, who once famously refused to get on a plane because it was scheduled to land "before" it took off due to time zones. "I ain't gettin' on no time machine," he said. They even had a young Moses Malone. The talent was there, but the league was dying.
When the 1976 merger talks heated up, the NBA decided they only wanted four teams: the Nuggets, Pacers, Spurs, and the Nets. The Spirits and the Kentucky Colonels were the odd men out. The Colonels' owner took a $3.3 million lump sum to disappear.
Ozzie and Daniel Silna? They held out.
The "Perpetuity" Clause That Broke the NBA
Working with their lawyer, Donald Schupak, the Silnas cut a deal that sounds insane today. They agreed to fold the Spirits in exchange for $2.2 million in cash and a "1/7th share of the visual media rights" from each of the four ABA teams that moved to the NBA.
The kicker? The contract said they’d get this money "for as long as the NBA or its successors continues in its existence."
Basically, that means forever. Or, in legalese, "in perpetuity."
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In the late '70s, this didn't seem like a big deal. NBA games were sometimes shown on tape delay after the local news. Nobody thought TV rights would become a multi-billion dollar goldmine. The first check the Silnas got was for about $300,000. Not bad, but not "retire to a private island" money.
Then the 1980s happened. Magic Johnson and Larry Bird saved the league. Michael Jordan turned it into a global empire.
As the TV contracts exploded, so did the Silnas' cut. By the 1990s, they were clearing $4 million a year. By the 2010s, those annual checks had ballooned to nearly $20 million. Think about that. They were making more than most of the NBA’s starting stars, and they hadn't owned a team in decades.
Why the NBA Finally Had to Pay $500 Million to Stop
You’ve gotta realize how much the NBA hated this. It was like a "ghost tax" they couldn't shake. Every time a new TV deal was signed—with NBC, then TNT, then ESPN—the Silnas got a raise.
The league tried to buy them out in the '80s for $5 million. The brothers said no. They tried again later. No.
By 2014, the NBA was looking at another massive TV rights jump. They realized if they didn't settle now, the Silnas’ heirs would be collecting checks until the sun burned out. Plus, the Silnas were suing for more. They argued they deserved a cut of international rights, League Pass, and even "NBA TV."
Finally, they reached a settlement. The NBA paid the Silna brothers $500 million upfront to end the "perpetuity" part of the deal.
If you add up the $300 million they’d already collected over the years, the total take was around $800 million. All from a $1 million investment in a failing ABA team.
The Madoff Connection and the Human Side
It wasn't all just piling up gold bars, though. You might remember the name Bernie Madoff. It turns out the Silnas were among the victims of his massive Ponzi scheme. While they were "NBA wealthy," a huge chunk of their personal fortune was tied up in Madoff's fraud.
Some people think that's why they finally agreed to the 2014 buyout. They needed the liquidity. Ozzie Silna passed away in 2016 at the age of 83, just a couple of years after the big settlement. Daniel is still around, and while they're known for this "greedy" deal, they were actually big philanthropists, particularly in Malibu and for environmental causes.
Lessons from the Silna Brothers
So, what can we actually learn from this? It’s not just a cool trivia story for the bar. There are some real, actionable takeaways here for anyone in business or even just looking at a contract.
- Leverage is everything. The Silnas knew the NBA needed the merger to happen. By being the last holdouts, they forced the league to agree to terms that seemed small then but were massive later.
- Read the "forever" clauses. Never underestimate the power of "in perpetuity." If you’re signing away or gaining rights, that one word changes the entire value of the deal.
- Patience is a literal virtue. If they had taken the $5 million buyout in 1982, they would've missed out on $795 million. Sometimes the best move is to do nothing and let the market grow around you.
- Diversify your wins. Even with the greatest deal in sports history, the Silnas got hit hard by the Madoff scandal. No matter how "guaranteed" your income is, never put all your eggs in one basket.
The Spirits of St. Louis haven't played a game in 50 years, but their ghosts are still some of the most successful owners in professional sports. Next time you're watching a game on TNT or ESPN, just remember: for a long time, a couple of guys in New Jersey were getting a piece of every commercial break, just because they knew when to say "no."
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To truly protect your interests in any long-term agreement, always insist on defining "new media" or "future platforms" explicitly in your contracts, as the Silnas' later lawsuits over streaming rights proved that technology often outpaces the original language of a deal.