Arch Stanton Guest Post: Episode 23 in Today I Learned – the Spirits of St Louis

unnamed

Readers, it’s time I come clean. Many of these ‘today I learned’ posts are things I saw in various corners of the internet or in a book that seemed interesting and worth of additional research, at which point I at them to a list of potentially interesting subjects. When I feel compelled and I am in the proper mental and/or emotional space to begin MY PROCESS, I will pluck a topic and write. This current topic has been one of my favorite historical tidbits for quiet a while now, and I have been waiting for the right moment to share it. I understand my integrity has been tarnished by this revelation, and it has been a mighty weight on my soul for months now, for what is the internet if not a forum for honesty among anonymous sources?

THE SPIRITS OF ST LOUIS! They were a basketball team in the American Basketball Association (ABA), a high-flying pro league that rivaled the NBA while stalling out in the 60’s and 70’s despite offering flashy dunks and ball handling skills next to the comparatively bland NBA. You may be familiar with the ABA because Will Ferrell made a movie about it, but it was in that part of his career where his shtick was overplayed and most people skipped it. The NBA was also floundering financially in the 1970s, but not nearly as much as the ABA, and sought to gain some of the more prosperous teams and more crowd-alluring players. By the summer of 1976, only seven ABA teams survived, and the NBA made their move to incorporate some of the flailing teams – the Brooklyn Nets, Denver Nuggets, Indiana Pacers and San Antonio Spurs were all incorporated into the NBA. The Virginia Squires, already in the early stages of bankruptcy, received nothing from the NBA: sucks to suck dudes, as you will soon see. The Kentucky Colonels (yes, there was a basketball team named after KFC) took a $3.3 million buyout, no insignificant amount in 1976.

The Spirits of St Louis were in a unfortunate position – they had no marketable players to auction the rights off to and had no value to the NBA as a franchise, but they did have guile. SO much guile. Owners and brothers Ozzie and Daniel Silna negotiated their buyout with the NBA a bit differently than the Kentucky Colonels. Instead of taking the upfront cash entirely in cash, they settled for 1/7 of the future television money that the now-NBA bound franchise would collect “for as long as the NBA or its successors continues in its existence” (they still took $2.2 million in cash). The NBA did some back-of-a-bar-napkin math, came up with some fantastically infinitesimally small estimate for what these television splits would be at the time, and managed to rush to close the deal before the Silnas brothers realized how much they were leaving on the table.

You see where this is going.

At the time, the NBA had no television deal. Who wanted to watch basketball on TV? This was still in the infancy of the league, only a decade away from an era when barnstorming – going to town-to-town where a “pro” team would play whatever team the locals could cobble together. Think the Harlem Globetrotters but less entertaining and DEFINITELY not black – could you imagine a team of black guys schooling the shit out of a bunch of sister-fuckers in whatever backwater they happened to get stuck playing in?

Fast-forward a few years: the NBA is one of the most popular leagues in America, with a lucrative television deal. Given the fact most of America only wants to watch Michael Jordan and the Bulls in addition to the Celtics and Lakers, the owners of the other, shittier teams strong armed the fun, popular teams into what is now called revenue sharing: every dollar earned by teams or the league not specifically generated by in-stadium concessions is split evenly among all teams. Let’s do a bit of math: there are 30 NBA teams, four of which had origins in the ABA (so two-fifteenths), and the Silnas brothers had a contract stipulating they were entitled to one-seventh of that. This equates to roughly 2% of the NBA’s total revenue from television contracts.

The first year, the Silnas brothers received a check for $521,749.00; the Kentucky Colonels’ owner chuckled heartily to himself while sipping bourbon and thinking about which of his horses he was going to stud out (note – I have no idea what a wealthy man in the 70’s in Kentucky would do in his free time). In the 90’s, estimates suggest the Silnas brothers collected $4.4 million PER YEAR. In 2007, the NBA, pissed at getting grifted thirty-plus years ago in a moment of poor judgment, sought to buyout the Silnas brothers’ interest from this contract for $5 million a year over the next year while on the cusp of what was to be a record-setting television deal by a professional league in America. The Silnas brothers knew what they had, and went back to diving into their Scrooge-McDuck-piles-of-cash the NBA was contractually locked into sending them annually. The Silnas brother collected roughly $14.5 million for the next eight years.

In 2014, the NBA lawyered way the fuck up to take on this unassailable contract that was burning the everloving shit out of them – WHICH OF YOU ASSHOLES LET THEM PUT “IN PERPETUITY” IN THE CONTRACT. The Silnas brothers had collected roughly $300 million from the NBA by this time DESPITE NOT HAVING A TEAM THAT EVER PLAYED IN THE NBA. The NBA knew the only way out was throw more cash at the problem – they offered a lump sum payment of $500 million in exchange for a greatly reduced annual fee.

The brothers collected roughly $800 million over 38 years despite not doing shit. Literally, no work at all besides a splash of foresight netted each brother $360 million (their attorney was set to get 10% of all proceeds of the deal as well – he was raising the roof, or whatever the appropriate dance move was used for celebrating in 1976 for his luck). Because all good things must come to an end, the Silnas brothers invested heavily with Bernie Madoff in the mid-2000s, and lost a large chunk of their money. Psyche! They pulled out and got all their money plus gains before the bottom fell out of the Madoff operation (later it would be determined they were improperly paid and had to contribute $24 million back to other victims). I’m sure there was more than one NBA owner happy to see these two come back to earth from their sparkling high castle in, uhh, St Louis.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s