The best sports deal of all time
Back in the 70s, professional basketball in the United States was bifurcated. You had the NBA we all know and love today, but you also had the “American Basketball Association”.
These two leagues had competed for a while, and finally it was looking like the NBA was going to win out. The NBA was going to start buying out ABA teams and absorbing them. It started out by purchasing the Nets, the Spurs, the Nuggets, and the Pacers, and all that was left after this initial purchase were three teams: the Virginia Squires, the Kentucky Colonels, and St. Louis Spirits.
Soon after this, the Squires folded, and the NBA offered both the Colonels and the Spirits $3 million to sell. Kentucky accepted, but the Sprits held out and decided to play hard ball.
Via some voodoo negotiating magic, they managed to convince the NBA to instead agree to a different deal. The Spirits owners would get paid a flat fee for each Spirits player drafted to the NBA, and more importantly, would a 1/7th share of the media rights of each of the four former ABA teams (the Pacers, Spurs, Nuggets, and Pacers). Let me repeat that — the owners of the Spirits convinced the NBA to essentially let them be 1/7th shareholders of the ad revenue from 4 teams in perpetuity, for essentially nothing in return.
How did this work out for the two brothers who owned the Spirits? Well, they got $2.2 million for their players getting drafted, and then from 1976 to 2015, they made $300 million dollars from the media rights. Keep in mind during this time these brothers did nothing. They just raked in the cash.
But, it gets better. You see, the NBA’s media rights deals expired in the 2015–2016 season, and the NBA was going to have to renew their deals. The NBA did NOT want to have to include these god damn brothers in their new negotiations, and so tendered an offer to the brothers in return for ending the deal from 1976.
How much did they offer? Well…..$500 million dollars.
Yup, the brothers got the NBA to pay them $500 million in return for ending the contract.
And so there you have it. The two brothers who negotiated what is certainly the best sports deal ever, and may very well be one of the best deals ever.
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