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New York Times : Silna Deal Settlement is near (AFFECTS THE PACERS) - Page 2
For almost 40 years, the Indiana Pacers have paid millions of dollars to two brothers, one in New Jersey and the other in California. This year, the Pacers will send Ozzie and Daniel Silna almost $5 million.
It could be one of the best sports deals of all time — and now the NBA and the Pacers want to give the Silna brothers an additional $500 million.
What have the Silna brothers done to get paid an estimated $300 million since 1976 from this deal?
In 1976, NBA wanted to absorb four teams from the rival American Basketball Association (ABA): the Indiana Pacers, San Antonio Spurs, New York (now Brooklyn) Nets and the Denver Nuggets. It didn't want the Spirits of St. Louis, which the Silna brothers owned.
The Silna brothers proposed the four teams going to the NBA pay them one-seventh of their national television money — in perpetuity. Their shrewd proposal has paid off famously as the NBA TV contracts skyrockted. This year, the brothers' take is estimated at $20 million.
"Something went wrong somewhere," Pacers owner Herb Simon told Forbes Magazine in 2011. "The intent of the deal was not to have it in perpetuity. It was to compensate them for the loss of their franchise.
"It's just an egregious situation now."
The Silna brothers sued the NBA in 2012, wanting additional compensation from television revenue that did not exist in 1976, including NBA TV and foreign broadcast rights.
The NBA and the Silnas have agreed to a settlement, which is awaiting a federal judge's approval, that call for the brothers to get a $500 million upfront payment through privately-financed bonds, the New York Times reported.
The settlement also calls for the four NBA teams and the Silnas to then form a partnership that will eventually allow the teams to take a majority ownership of their television rights, according an NBA statement on the proposed settlement. It's not clear, however, how or when that will take place. The former ABA teams would make "an equity investment" in the partnership, the NBA said.
It appears the Pacers will continue paying a portion of its TV and visual media revenue streams into the proposed partnership each year, but the NBA statement did not say how much.
Pacers management declined to comment about the settlement.
City leaders say the proposed settlement will not impact the Pacers' financial arrangement with the city of Indianapolis. Pacers Sports & Entertainment has collected $10 million each of the last four years as part of an initial three-year agreement and a one-year extension that will expire this June. The city and the Pacers are in negotiations to extend the deal.
"It's not real clear to us, and frankly it's not that important to us," said Ryan Vaughn, chief of staff to Mayor Greg Ballard. "We're more concerned about the costs of running the building."
Vaughn said the developing deal is based solely on Fieldhouse operation and maintenance costs, not the Pacers' overall balance sheet.
Said Robert Vane, the CIB's spokesman: "Our discussions with Pacers Sports & Entertainment have always been focused on keeping the Fieldhouse state-of-the-art and not on financial assistance for the team."
Egregious is an understatement.
Last edited by RamBo_Lamar; 01-27-2014 at 06:59 PM.
"I've been through the fire, and what the fire doesn't destroy it hardens...
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