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Case from 1970 revisited in dispute over NBA TV revenue

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The NBA asked a Manhattan judge on Thursday to side with the league in a legal battle with origins in the bygone era of short shorts, low-top sneakers and big Afros.

The dispute stems from a sweetheart deal that's enjoyed by the former owners of a defunct American Basketball Association team — and despised by current owners of four NBA franchises, including the Indiana Pacers.

It all began in 1970, when future legends like Oscar Robertson, John Havlicek and Bill Bradley filed an antitrust lawsuit challenging the NBA's then-proposed merger with the ABA.

As part of a settlement reached in 1976, the St. Louis Spirits of the ABA agreed to fold. In exchange, the NBA was required starting in 1980 to pay Spirits owners Ozzie and Dan Silna a portion of the television revenue earned by the four ABA teams that survived the merger: the Indiana Pacers, now Brooklyn Nets, Denver Nuggets and San Antonio Spurs.

Because the four teams must share with the Silnas as long as the NBA exists, the brothers have quietly made a killing off league's explosion in popularity in recent decades — by some estimates, around $240 million so far.

According to story published last November by IBJ, the deal has cost the Pacers $4 million to $5 million annually in recent years.

"Every year, when it came down to take a look at the budgeting process we would all just shake our heads," a former Nuggets executive once told the Los Angeles Times.

But the brothers have now called a technical foul: Last year, they asked the court to reopen the old antitrust case, claiming that the league has unfairly cut them out of revenue from international broadcasts and cable packages.

The judge who had originally presided over the case in federal court in Manhattan died last year. But a current judge, Loretta Preska, agreed to take a look.

NBA lawyer Jeff Mishkin argued on Thursday that the revenue-sharing provision applied only to national broadcasts by traditional TV networks.

Mishkin said the agreement makes clear that, "You get network television revenues — and that's all you get." The NBA, he added, "has never not met its obligation."

The brothers' attorney, Michael Carroll, countered that wording in the settlement referring to revenue from "all broadcasts" should be interpreted to include more modern TV offerings like NBA League Pass, which allows viewers to see out-of-market games.

Preska told the parties she would review their court filings before making any ruling. In the meantime, she suggested they should try to find a way to share the wealth without one.

"I think you people ought to sit down and talk about this," she said.

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  • Good Point Brian
    Nice counter point response, I like it.
  • Fair enough
    Fair enough, Mike. But consider that, per this report, the Silnas have earned an estimated $240 million from this deal. Perhaps they could've netted more had the Spirits stayed in operation, but that doesn't change the fact that they've got a huge some of money without any risk to capital. That screams sweetheart to me. Very few fans have known of this deal, hence "silent." And it's been reported previously that the Simons are very upset with this deal. I'm not saying that the Silnas don't deserve it. I'm simply saying that the article can't be biased if it's true.
  • Fair?
    Are you sure it is fair? How much would the St. Louis Spirits be worth today, and what would their collective earnings be over the last 32 years if they were not forced to fold?
    • Objective
      Is the bias unfair if it's true??
    • Way to be objective
      Way to be objective in your reporting... Using phrases like 'sweetheart deal', 'despised by owners', and 'quietly making a killing' shows a lack of being impartial, and a clear bias towards one side of the story.

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