This is a story about two brothers, Ozzie and Daniel Silna. If you’re a fan of basketball, it’s likely you’ve never heard of them. Yet they bought a basketball team for $1 million and ended up with $800 million.
The brothers were born in New Jersey to Latvian immigrant parents. Their parents had moved to the US in the 1930s.
The brothers started a business manufacturing polyester. This turned out to be very successful. It made them enough money to realize their dream of owning a basketball team.
The National Basketball Association (NBA) was founded in 1946. The Silna brothers’ dream was to own an NBA team. It never came to be.
In 1967, the American Basketball Association (ABA) was formed. It was a competitor to the NBA.
The ABA had 7 teams under its wing. The lack of TV income led to 4 of the 7 teams merging with the NBA. Of the other 3 teams, one folded. That left 2 teams out in the cold.
The $1 million basketball team
One of those teams was the Carolina Cougars, which the Silna brothers had bought for $1 million just 2 years prior to the ABA merging with the NBA. By this time they had also moved the team to St. Louis and changed its name to Spirits of St. Louis.
The NBA offered the brothers $3 million to disband the team. That seemed like a pretty sweet deal. It would have meant a 3X return in just a few short years. The brothers turned down the offer.
Incidentally, the other team accepted the $3 million offer.
The $2 million plus annual payments deal
Instead, the brothers negotiated a slightly different deal. They accepted $2 million in cash plus a 1/7th cut of the TV money that was due to the 4 teams from the ABA that had joined the NBA.
After that, the brothers received regular annual payments of around $200,000. Not too bad at all.
$20 million in annual payments
The NBA then grew massively in popularity. By 2014, the brothers were getting payments of $20 million a year. Between 1976 and 2014 they received payments of $300 million.
The NBA didn’t want to keep paying the brothers every year so decided to come to an agreement to give one final payment.
A $500 million super-deal
After some negotiating, the brothers settled on a one-off payment of $500 million.
This brought the total income to $800 million. The brothers had bought a basketball team for $1 million. That team never joined the NBA, yet the NBA paid the brothers a total of $800 million.
A final twist is that the lawyer that helped them negotiate the deal had also negotiated a 10% fee for himself. The lawyer ended up with a nice $80 million.
This has got to be one of the most incredible sports deals ever.